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Part B: Mineral Rights - Part B-4: ASM Licencing - 28. Artisanal Mining | 28.1 Eligibility

In most laws where AM is provided for separately from SSM, depending on whether the law provides for an authorization system, a permit system or a licence system (as described in the Introduction section above), the eligibility for engaging in the activity is restricted to either:

    1)nationals (i.e., individuals who are citizens of the host country),

    2)nationals and cooperatives of nationals, or

    3)nationals, cooperatives composed of nationals and companies wholly owned by nationals.

The rationale behind this restriction is to support local livelihood and traditional mining activities, particularly in countries where there is a culture of mining. It may also be seen as a lenient point of entry into the mining sector to allow the development of local mining entrepreneurs.

In laws where SSM and AM are addressed in a consolidated manner as ASM, a clear legal regime would isolate the issue of eligibility and indicate whether foreign nationals are eligible or not for AM authorization. In this regard, it is important to indicate if there is special permission for nationals from neighbouring countries with which there are reciprocal arrangements. Other general limitations include age of majority, exclusion due to bankruptcy or criminal charges etc.

28.1. Example 1:

Article [_]. Eligibility for artisanal mining licences.

(1) Any person who wishes to carry out artisanal mining operations shall apply for an artisanal mining licence

(2) An artisanal licence shall be granted to-

(a) an individual person who is a citizen of [Country];

(b) a co-operative society registered in [Country]comprising citizens of [Country]exclusively;

(c) a joint-venture or partnership registered in [Country]comprising citizens of [Country]exclusively; or

(d) a body corporate that is incorporated or registered in [Country] having one hundred percent of its shares held by citizens of [Country].

(3) All such co-operatives and partnerships shall register with the [Regulating Authority] and shall provide such documentation as the [Regulating Authority] may require.

Article [_]. Persons ineligible for artisanal mining rights

(1) No artisanal mining right shall be granted to an individual who:

(a) is under the age of 18 years;

(b) is not a citizen of [Country] or has not been ordinarily resident in [Country] for a period of ten years immediately preceding the application for a mineral right;

(c) is an un-discharged bankrupt, having been adjudged or otherwise declared bankrupt under any written law, or enters into any arrangement or scheme of composition with creditors; or

(d) has been convicted of an offence involving fraud or dishonesty;

(2) No artisanal mining right shall be granted to a co-operative society which is not registered in accordance with the laws of [Country].

(3) No artisanal mining right shall be granted to a body corporate:

(a) which is not registered or incorporated under [the Companies Act]; or

(b) which is in liquidation other than a liquidation which forms part of a scheme for the reconstruction or amalgamation of such body corporate;

(c) in respect of which an order has been made by a court of competent jurisdiction for its winding up or dissolution;

(d) which has made a composition or arrangement with its creditors;

(e) which has among its shareholders any shareholder who holds at least a ten percent share of the company or a director, who would be disqualified in terms of subparagraphs (a) or (d) of paragraph (1).


Annotation

Drawn from Sierra Leone’s mining law (2009), this provision – which involves an application process for an artisanal mining licence - permits only citizens of Sierra Leone or registered cooperatives, partnerships joint ventures and corporates that are wholly owned and controlled by citizens of Sierra Leone to be eligible for a license.

Individuals who are legally insolvent are ineligible, as are individuals who are under-age or have been convicted of fraud or dishonesty. Similarly, corporate entities that are legally insolvent or who have among their managers or directors an ineligible individual are similarly ineligible.

The restriction of eligibility for artisanal mining rights to national citizens or entities wholly owned and controlled by such citizens is typical among mining laws. The reason for this is that artisanal mining is generally a poverty-driven phenomenon among segments of the local population; and the goal of the law is to formalize it. Artisanal mining by definition is labour intensive and not capital intensive. No foreign investment is necessary or desirable in AM. If AM were open to foreign individuals and entities, that could encourage migration to AM sites that would likely create social problems. On the other hand, existing informal AM activity, particularly in border areas, often involves a mixture of nationals and visitors from the neighbouring country. In those areas, it may be difficult to impossible to formalize the activity without including those foreign participants.

28.1 Example 2:

Article [_]

(1) The artisanal exploitation authorization is granted to:

(a) individuals of [Country] nationality;

(b) corporate entities organized under [Country]law; and

(c) nationals of countries that extend reciprocity to [Country citizens].

(2) The mechanized artisanal exploitation authorization is granted to:

(a) individuals of [Country] nationality; and

(b) corporate entities whose share capital is held exclusively by [Country citizens].

Annotation

Drawn from Mali’s mining law (2012), this example refers to two types of artisanal mining authorization that exist under the law: the standard AM authorization and the mechanized AM authorization. The eligibility requirements for the mechanized AM authorization are more restrictive than those for the standard AM authorization.

Individuals are eligible for both types of authorization if they are citizens of Mali. Individual citizens of other countries that extend reciprocity to Malians are also eligible for the standard AM authorization, but not for the mechanized AM authorization. Corporate entities organized under Malian law are eligible to receive standard AM authorizations without regard to the nationality of the shareholders. For mechanized AM authorizations, only corporate entities (wherever organized) whose share capital is entirely owned by Malians are eligible.

Thus, this example leaves the door open to some foreign participation in AM that is not mechanized, but reserves mechanized AM exclusively for Malians and companies wholly owned by Malians. The reason for the distinction is probably the historic participation of nationals of neighbouring countries in artisanal mining in Mali and the reciprocal participation of Malians in artisanal mining in the neighbouring countries. On the other hand, mechanized AM has been recognized as a new category of AM activity and therefore is being reserved for Malians in the interest of promoting local investment and entrepreneurship in the subsector.