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Part B: Mineral Rights - Part B-3: Large Scale Exploitation - 26. Large Scale Exploitation Licensing | 26.8 Term of Licence

The term of a large-scale exploitation licence is typically either the expected life of the mine as estimated in the feasibility study, possibly subject to a limit, or a fixed term of typically 15-30 years. The term of a large scale exploitation licence is typically much longer than other types of licences due to the more extended, time consuming nature of the mining activities.

In establishing the term of the licence, consideration should be given to the reasonable amount of time necessary to complete pre-mining consultations and work, particularly in connection with local community relations and resettlement, if necessary, as well as to the reasonable time necessary to close the mine and rehabilitate the site after the closure of mining operations.

26.8. Example 1:

Article [_]

A special mining licence granted to an entitled applicant shall be for the estimated life of the ore body indicated in the feasibility study report, or such period as the applicant may request whichever period is shorter.

Annotation

Drawn from Tanzania’s mining law (2010), this provision sets the term of the large scale exploitation licence as the life of the ore body. This is reasonable, but it does not explicitly account for the period of development, construction and testing or the mine closure and site rehabilitation period at the close of production. That could be clarified in the regulations, however.

This type of provision runs the risk of becoming a licence in perpetuity, particularly as it pertains to terms and conditions, new fiscal regime. If governments use this route, it is best to provide for periodic review or time constrained stability clauses as well as a provision under savings provisions in the event of a new mining law.

26.8. Example 2:

Article [_]

(1) A large scale mining licence shall be valid for the period specified in the licence; provided however, that such period shall not exceed 20 years.

(2) A large scale mining licence may be renewed for a period not exceeding 10 years each subject to sub-article (3) of this Article.

(3) The licensee shall have the right to renew the licence provided that he can demonstrate the continued economic viability of mining the deposit, has fulfilled the obligations specified in the licence, and is not in breach of any provision of this [Code][Act][Law], regulations or directives which constitute grounds for suspension or revocation of the licence.

Annotation

Drawn from Ethiopia’s mining law (2010), this provision sets a fixed term of twenty years for large scale mining licences in its Mining Operations Proclamation of 2010. This term may be long in the case of a modest-sized gold mine, but the holder can surrender the licence prior to the end of the term. The licence term may be short for major projects, but the article provides for unlimited renewals of up to ten years each if the holder is in compliance with its obligations.