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Part B: Mineral Rights - Part B-5: Development Minerals - 30. Development Minerals Exploration Licence | 30.5 Specific Obligations of a Licence Holder

Provisions that lay out, for the holder of an exploration licence, the necessary responsibility or duty to undertake certain actions or restriction from undertaking certain actions or causing certain effects are collectively treated as obligations. Noncompliance with these obligations may lead to fines and/or ordered suspensions of operations until the Licensee is in compliance. Where suspension occurs, continued, uncured non-compliance beyond a specified time period may result in revocation of the licence.

Specific obligations of an exploration licence holder may include obligations before, during and after operations.

Obligations prior to the commencement of operations may include: (1) introduction and presentation to local authorities; (2) preparation and regulatory approval of an environmental and social mitigation plan; and (3) establishment of an environmental restoration surety bond or fund.

Obligations during operations may include:

  • Commencement of operations within a specified time period;
  • Posting of an environmental surety;
  • Payment of annual fees per unit of surface area held;
  • Implementation of an approved work program;
  • Filing regular reports on work and investment completed and results achieved (e.g., geological findings);
  • Implementation of approved environmental and social mitigation plan, and filing of periodic reports thereon;
  • Compliance with labour, health and safety regulations;
  • Compliance with applicable immigration, customs and tax laws and regulations;
  • Compliance with all applicable contract terms, in countries where a contract between the State and each exploration licence holder is required.

Obligations upon the closure of operations normally include a final report of work carried out and results achieved, as well as the implementation of the site closure and restoration provisions of the approved environmental impact mitigation plan, unless the site is to be developed as a mine.

30.5 Example 1:

Section [_]: Obligations for large-scale mining.

Article [_]: Obligations for maintaining the validity of the right

(1) In order to maintain the validity of their mining or quarrying right, the holder must:

(a) commence work within the period specified in Article [_] of the present Code;

(b) pay the annual surface area fees per square relating to their title, each year before the deadline set in Article [_] (on the amounts due as annual surface area fees per square) of the present Code.

(c) pay the taxes and contributions determined in the present Code in the event that the duration of the mining licence is extended.

(2) Should one of these obligations not be fulfilled, the holder shall lose their right by application of the procedure provided for in Articles [_] (on failure to comply with administrative obligations, and the related penalties) of the present Code.

(3) Should the holder fail to comply with the obligations listed in the following chapters, they shall be penalised with fines and/or possibly with an order to suspend or put an end to operations or, in the case of an offence, shall be prosecuted.

Article [_]: The obligation to commence work

A Prospecting Licence holder shall be required to commence work within six months of the date on which the prospecting right was issued.

Article [_]: The obligation to pay the annual surface area fees per square

(1) To cover costs for the services and management relating to the rights established by mining titles, annual surface area fees per square, for each mining or quarrying title which is issued, shall be collected for the Ministry of Mines which shall redistribute a portion to the departments of [the regulatory authority] responsible for the administration of the present Code.

(2) Holders of Prospecting Licences, Operating Licences, Operating Licences relating to Tailings, Operating Licences for Small-Scale Mining, Permits to Prospect for Quarry Products and Permanent Quarry Operating Permits shall pay the surface area fees for the first year when the mining or quarrying title is issued.

(3) The holder is to settle the annual surface area fees per square for each following year before the end of the first quarter of the calendar year. However, annual surface area fees are to be paid pro rata per square, when the initial title is issued, or in the last year during which the title is valid.

(4) Annual surface area fees per square are to be paid at the relevant counter at the Ministry of Mines which issued the mining or quarrying title, which shall issue the holder with a receipt when payment is made.

Section [_]: Environmental Protection

Article [_]: During reconnaissance

(1) Before reconnaissance work relating to mining or quarry products may commence, the holder of a Reconnaissance Licence or a Permit to Prospect for Quarry Products must draw up and obtain approval for a Mitigation and Rehabilitation Plan (Plan d’Atténuation et de Réhabilitation (PAR)) for the proposed activities.

(2) The terms of the PAR and its approval shall be laid down in the regulations.

(3) The approval of a PAR shall fall under the jurisdiction of the department responsible for environmental protection within the [the regulatory authority] in collaboration with [the regulatory authority for the environment].

Section [_] The Protection of Cultural Heritage

Article [_] Declaration of indicators of an archaeological discovery

Article [_] The discovery of artefacts of national cultural heritage

Section [_] Health and Safety

Article [_] The jurisdiction of [the regulatory authority]

Article [_] The declaration of an accident in a mine or quarry

Article [_] The use of explosive products

Section [_] Various obligations

Article [_] The relationship with local authorities

Article [_] Registers and reports

Article [_] Inspections

Article [_] The opening and closure of a prospecting or operations centre.

Article [_] Obligations for development minerals small scale licence holders.

(1) The holder of a small-scale mining licence shall–

(a)within the limits of its competence and resources, carry on in good faith, in the licenced area, exploration or mining operations;

(b)furnish the [Regulating Authority] with such information relating to its exploration or mining operations as the [Regulating Authority] may reasonably require or as may be prescribed;

(c)carry out promptly any directives relating to its exploration or mining operations which may be given to the holder by the [Regulating Authority] for the purposes of ensuring safety or good mining practices;

(d) if not personally supervising the exploration or mining operations under the licence, employ a Mines Manager for the purpose of supervising its exploration or mining operations provided that all such Mines Managers must be approved by the [Regulating Authority] and shall carry with them such means of identification as the [Regulating Authority]may direct;

(e) before beginning or ceasing any exploration or mining operations notify the appropriate local government authority or local authority and an authorized officer, of the intention to begin or cease exploration or mining, as the case may be;

(f) substantially comply with any community development agreement required under this [Law][Act][Code];

(g) sell the minerals obtained in the mining area as prescribed;

(h) carry out rehabilitation and reclamation of mined out areas;

(i) keep accurate records of winnings from the mining area and such records shall be produced for inspection on demand by the [Regulating Authority] or a duly authorized officer; and

(j) submit all reports as prescribed.

Article [_] Obligations for development minerals artisanal licence holders.

(1) The holder of an artisanal mining licence shall–

(a)within the limits of its competence and resources, carry on in good faith, in the licenced area, exploration or mining operations;

(b) carry out rehabilitation and reclamation of mined areas as prescribed in the law;

(c) Perform the operations applying health and safety standards for its workers.

(d) Report to the government-

(i) annual production.

(ii) annual income.

(iii) compliance of environmental obligations.

(e) The [Regulating Authority] shall issue regulation that will organize the reports to be submitted annually and jointly with the income tax reports.

(f) employ in the area in respect of which the licence is issued not more than ten workers per artisanal mining licence;

(g) Allow officers of the [Regulating Authority] or other government entities to inspect the site of operations when complains of any kind have been reported.

Annotation

Drawn from DRC’s mining law (2002), the provision for large scale mining deals with obligations in two chapters. Chapter 1 establishes the principle that the holders of all licences must comply with two specific obligations that have specific time requirements in order maintain the validity of their rights:

  • begin work within the time specified in article 197 of the Code; and
  • pay the surface fee per square unit of area related to their title before the deadline set in article 199 of the Code.

Failure to comply with either of these obligations results in the licensee being stripped of the licence.

The licensee’s failure to comply with the obligations listed in the second chapter will be penalized by fines and/or possible orders to suspend operations, or in the case of violations, by judicial process.

This bifurcation of obligations into two categories and the clarity and objectivity of the two obligations that are enforced by revocation of the title provides great security of title to licensees and also ensures prompt and complete payment of the fees that fund the work of the Regulating Authority.

The obligations in the second category are numerous and are only referenced here by article title, except for the obligation to prepare and obtain the approval of an Environmental Mitigation Plan (PAR) before commencing work (which must begin within 6 months of delivery of the licence). The process of approval is expedited by a sectoral environmental review authority.

Drawn from Sierra Leone’s mining law (2009), the provision for small scale mining includes the following key obligations:

  • carrying out exploration and mining in a reasonable within the required competence.
  • furnishing the required information to the Director of Mines
  • carrying directives promptly to ensure safe and good practices
  • Appoint manager to supervise operations
  • notifying appropriate local authorities when beginning or ceasing operations
  • keeping accurate records and submitting required reports
  • selling minerals in prescribed manner
  • complying with community development agreements
  • carrying out required rehabilitation and reclamation of land

In addition, an SSM licence holder should also have a scheme in place for employing and training local people.

For the Artisanal mining licence, the example is also drawn from Sierra Leone’s mining law (2009), and includes the most essential obligations of licensees. Evidently, the bar is lowered in this case, however, the artisanal mining licensees need to comply at least a minimum set of duties, in order to ensure the safety of the basic interest of the community.

30.5 Example 2:

Article [_]. General rules for development minerals large scale operations.

(1) No person may prospect for or remove, mine, conduct, technical co-operation operations, reconnaissance operations, explore for and produce any mineral or commence with any work incidental thereto on any area without –

(a) an approved environmental management program or approved environmental management plan, as the case may be;

(b) a prospecting/reconnaissance permission, exploration right, permission to remove, mining right, mining permit, retention permit, technical co-operation permit, reconnaissance permit, exploration right or production right, as the case may be; and

(c) obtaining rightful permission from the land owner, after due compensation.

Article [_] Obligations of holder of development minerals large scale exploration licence

(1) The holder of an exploration right must –

(a) lodge such right for registration at the Mining Titles Office within 30 days of the date on which the right –

(i) becomes effective in accordance with the provisions of this [Law][Act][Code]; or

(ii) is renewed in accordance with the provisions of this [Law][Act][Code];

(b) commence with exploration activities within 120 days from the date on which the exploration right becomes effective or such an extended period as the [Regulating Authority] may authorize;

(c) continuously and actively conduct exploration operations in accordance with the exploration work program;

(d) comply with the terms and conditions of the exploration right, relevant provisions of this [Law][Act][Code] and any other relevant law;

(e) comply with the requirements of the approved environmental management programme;

(f) pay the prescribed exploration fees to the State; and

(g) subject to section [_] (on the rules regarding the removal and disposition of minerals), pay the State royalties in respect of any mineral removed and disposed of during the course of exploration operations.

Article [_] Permission to remove and dispose of minerals

(1) Subject to subsection (2), the holder of an exploration right may only remove and dispose for his or her own account any mineral found by such holder in the course of exploration operations conducted pursuant to such exploration right in such quantities as may be required to conduct tests on it or to identify or analyse it

(2) The holder of an exploration right must obtain the [Regulating Authority]'s written permission to remove and dispose for such holder's own account of bulk samples of any other minerals found by such holder in the course of exploration operations conducted pursuant to such exploration right.

Article [_] Information and data in respect of prospecting/ reconnaissance and exploration

(1) The holder of an exploration right or prospecting/reconnaissance permission must –

(a) keep proper records, at the registered office or place of business, of exploration operations and the results and expenditure connected therewith, as well as borehole core data and core-log data, where appropriate; and

(b) submit progress reports and data, in the prescribed manner and at the prescribed intervals, to the [Officer of the Regulating Authority] regarding the exploration operations.

(2) No person may dispose of or destroy any record, borehole core data or core-log data contemplated in subsection (1)(a) except in accordance with written directions of the relevant [Officer of the Regulating Authority].

Article [_] Environmental management principles

(1) The principles set out in section [_] of the [National environmental legislation ] –

(a) apply to all exploration and mining operations, as the case may be, and any matter or activity relating to such operation; and

(b) serve as guidelines for the interpretation, administration and implementation of the environmental requirements of this [Law][Act][Code].

(2) Any exploration or mining operation must be conducted in accordance with generally accepted principles of sustainable development by integrating social, economic and environmental factors into the planning and implementation of exploration and mining projects in order to ensure that exploitation of mineral resources serves present and future generations.

Article [_] Integrated environmental management and responsibility to remedy

(1) The holder of a reconnaissance permission, exploration right, mining right, mining permit or retention permit –

(a) must at all times give effect to the general objectives of integrated environmental management laid down in the [National environmental legislation];

(b) must consider, investigate, assess and communicate the impact of his or her exploration or mining on the environment as contemplated in the [National environmental legislation];

(c) must manage all environmental impacts –

(i) in accordance with his or her environmental management plan or approved environmental management program, where appropriate; and

(ii) as an integral part of the prospecting/reconnaissance, exploration or mining operation, unless the [Regulating Authority] directs otherwise;

(d) must as far as it is reasonably practicable, rehabilitate the environment affected by the exploration or mining operations to its natural or predetermined state or to a land use which conforms to the generally accepted principle of sustainable development; and

(e) is responsible for any environmental damage, pollution or ecological degradation as a result of his or her prospecting/reconnaissance, exploration or mining operations and which may occur inside and outside the boundaries of the area to which such right, permit or permission relates.

(2) Notwithstanding the [Companies Act], or the [Close Corporations Act], the directors of a company or members of a close corporation are jointly and severally liable for any unacceptable negative impact on the environment, including damage, degradation or pollution.

Article [_] Financial provision for remediation of environmental damage

(1) The holder of an exploration right, mining right or mining permit must annually assess his or her environmental liability and increase his or her financial provision to the satisfaction of the [Regulating Authority].

(2) If the [Regulating Authority] is not satisfied with the assessment and financial provision contemplated in this section, the [Regulating Authority] may appoint an independent assessor to rehabilitate the closed mining or exploration operation in respect of latent or residual environmental impacts, to be paid by the licence holder.

Article [_] Obligations of holder of development minerals small scale exploration licence.

(1) Registration of small scale licensees

(a) A person engaged in or wishing to undertake a type of small scale mining operation shall register with the [cadastral registry] of the designated area where the person operates or intends to operate.

(b) A person shall not be granted a licence under section 82(1) unless the person is registered under this section.

(2) Operations of small scale miners

A person licenced under section [x] shall observe good mining practices, health and safety rules and pay due regard to the protection of the environment during mining operations

(3) Compensation for use of land

Where a licence is granted in a designated area to a person other than the owner of the land, the licensee shall pay compensation for the use of the land and destruction of crops to the owner of the land that the [Regulating Authority] in consultation with the [relevant government agencies] with responsibility for valuation of public lands may prescribe

(4) Use of explosives

A small-scale miner shall not without the written permission of the [Regulating Authority] use explosives in the area of operation

Article [_] Amendment of mineral at right to add other minerals

(1) Where in the course of exercising a mineral right under this [Law][Act][Code], the holder discovers an indication of a mineral not included in the mineral right, the holder shall within thirty days of the discovery, notify the [Regulating Authority] in writing of the discovery

(2) The notification given under subsection (1) shall

(a) contain particulars of the discovery, and

(b) the site and circumstances of the discovery.

(3) The holder of the mineral right may in the prescribed form, apply for the mineral right to be amended to

(a) include an additional mineral, or

(b) exclude a mineral

(4) Subject to this [Law][Act][Code] and unless the land which is the subject of the mineral right, is subject to another mineral right in respect of the mineral applied for under subsection (3), the [Regulating Authority] shall amend the mineral right on the terms and conditions that may be prescribed.

(5) A mineral right shall not be granted for another mineral over the same area of land subject to an e29sting mineral right unless the holder of the e29sting right is notified and given the first option of applying for the right.

(6) A notification given under subsection (5) shall contain

(a) particulars of the mineral applied for and

(b) the area applied for

Article [_] Obligations of holders of mineral rights

(1) The holder of a mineral right shall at all times appoint a manager with the requisite qualification and experience to be in charge of that holder’s mineral operations

(2) The holder of a mineral right shall notify the [Regulating Authority] in writing of the appointment of a manager and on each change of the manager

Article [_] Records of and reports by mineral right holders

(1) A holder of a mineral right shall maintain, at an address in [Country] notified to the [regulating entity] for the purposes of this section, the documents and records that may be prescribed and shall permit an authorized officer of the [Regulating Authority] at a reasonable time to inspect the documents and records and take copies of them.

(2) A holder of a mineral right shall furnish the [regulating entity] and other persons prescribed, with such reports on the mineral operations of and geological information attained by or on behalf of the holder.

Article [_] Obligations for development minerals artisanal licence holders

(1) The holder of an artisanal mining licence shall–

(a) within the limits of its competence and resources, carry on in good faith, in the licenced area, exploration or mining operations;

(b) carry out rehabilitation and reclamation of mined areas as prescribed in the law;

(c)Perform the operations applying health and safety standards for its workers

(d) Report to the government-

(i) annual production.

(ii) annual income.

(iii) compliance of environmental obligations.

(e) employ in the area in respect of which the licence is issued not more than ten workers per artisanal mining licence;

(f) Allow officers of the [Regulating Authority] or other government entities to inspect the site of operations when complains of any kind have been reported.

(2) The [Regulating Authority] shall issue regulation that will organize the reports to be submitted annually and jointly with the income tax reports.

Annotation

Drawn from South Africa’s mining law (2002), this provision requires (for exploration licences called prospecting permits) compliance with all of the obligations noted above and also:

  • Approval of an environmental management plan (as part of the licence grant process);
  • Notification and consultation with the landowner or lawful occupier;
  • Presentation of the licence to the Mining Titles office for registration;
  • Commencement of exploration (called prospecting) activities within 120 days of the effective date of the licence;
  • Maintenance of records, drilling logs, etc.; and
  • Obtaining the [Regulating Authority]’s approval for any removal of bulk samples for testing.

This is a clear and comprehensive set of specific obligations of exploration licence holders.

Provisions for small scale mining, drawn from Ghana’s mining law (2006), include many of the obligations in the previous example, but goes further to address compensation for the use of land, the use of explosives and the process for adding additional minerals to the licence