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Part B: Mineral Rights - Part B-5: Development Minerals - 30. Development Minerals Exploration Licence | 30.8 Renewal of Licence

Addressed often at the same time as the term of the licence, renewal of licence refers to provisions determining when, for how long, and how many times a licence holder may extend the initial duration of the exploration licence. Given the relatively short initial term of exploration licences, renewal terms are generally necessary for additional exploration, completion of the studies and plans required prior to mining operations.

Licence holders who are in compliance with the terms of their licence and their obligations under the mining law are generally entitled to renewals.

Most countries in the region provide for two renewal terms, which may be of the same length as the initial term or may be for shorter periods.

Most countries have ultimate term limits on the combined initial and renewal terms; but ultimately, term limits are arbitrary and may be inadequate for the necessary preparation to develop a complex deposit or one situated in an area presenting major logistical or environmental challenges, or simply to finalize a feasibility study under difficult market conditions. To deal with such situations, Botswana, Namibia, Tanzania and Uganda provide for the availability of a retention licence after the exhaustion of renewal terms under an exploration licence.

Mining laws generally require an application for the renewal of an exploration licence to be filed no later than a certain date prior to the end of the initial term, in order to allow time for processing of the application before the initial term expires. The better mining laws also provide that an exploration licence for which a renewal application has been timely filed are automatically extended until they are either renewed or the renewal is definitively denied.

Most renewal provisions require the relinquishment of a percentage of the area held under the exploration licence (usually half) upon each renewal. An alternative approach would be to permit the holder to retain a larger area upon the payment of an additional fee in order for the licence holder to retain the area that would otherwise be subject to mandatory relinquishment (see Article 24 of the 2014 Mining Code of Côte d’Ivoire, for example). As a general matter, mining laws make very large areas available for initial prospecting/reconnaissance activity, but reduce the maximum size of the area that may be retained upon each renewal or transition from prospecting/reconnaissance to exploration and from the latter to exploitation. In doing so, the laws seek to maximum efficiency on the part of licence holders so that the country’s mineral resources are developed expeditiously, thereby generating employment, commercial activity and fiscal revenues that can be used for other national purposes. Most mining laws require reduction of the area licenced for exploration upon renewals in order to prevent the tying up of areas larger than are necessary for a normal exploration program and to make the excess area available to other prospective applicants who may be more highly motivated to conduct exploration in the relinquished area than the initial licence holder.

Conditions are set under which renewal may be permitted and granted; and these may include:

  • Having met all the requirements of the licence during the preceding term such as fees, management of the environment, health, safety and mine development;
  • Submission of an updated environmental impact assessment and mitigation and rehabilitation plan, if necessary;
  • Submission of an updated work program, if necessary;
  • There being enough resource to be exploited in the renewal period.

30.8 Example 1:

Article [_] Renewal for large scale development minerals licences

(1) Where an applicant is entitled to the grant of an exploration licence, the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-

(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;

(b) where application for renewal has been made by the holder in the prescribed form, for the first period of renewal for which the applicant has applied, a period not exceeding three years;

(c) where application for renewal has been made by the holder in the prescribed form, for the second period of renewal for which the applicant has applied, a period not exceeding two years;

(d) where the holder is not in default and at the end of the second period of renewal a further period is required to complete a feasibility study, already commenced by the holder, for such further period as may be reasonably required for that purpose, but not exceeding two years.

(2) A holder of the licence who intends to renew the licence shall, not later than one month before expiry date of the licence, submit an application for renewal of the exploration licence.

(3) The [Regulating Authority] shall, on application of the holder of a licence granted under subsection (1) of this section and on payment of prescribed fees for renewal, renew the exploration licence-

(a) at the end of the initial exploration period or, as the case may be, at the end of the first renewal period, for the period referred to in paragraphs (b) and (c) of subsection (1);

(b) at the end of the second renewal period, in a case falling under paragraph (d) of subsection (1), for the period required to complete the feasibility study.

(4) The obligation of the [Regulating Authority] to renew an exploration licence is subject to the condition that-

(a) the holder is not in default except that the [Regulating Authority] shall not reject an application to renew an exploration licence on the grounds that the holder is in default, without first serving on the holder a notice giving particulars of the default and requiring the holder within a reasonable time specified in the notice to remedy the default; and

(b) the holder, on renewal under paragraph (a) of subsection (3), has relinquished in the case of a first renewal fifty per centum of the area held during the initial exploration period and in the case of a second renewal fifty per centum of the balance, and has by notice in writing to the [Regulating Authority] given a sufficient description of the areas he is relinquishing.

(5) The relinquished areas shall be displayed on the notice board at the [Regulating Authority] headquarters and local offices on a monthly basis.

(6) An exploration licence for gemstones other than kimberlitic diamonds, and an exploration licence for building materials shall subsist for one year from the date of grant and shall not be subject to renewal.

(7) The obligations of the [Regulating Authority] under paragraph (b) of subsection (4) shall not apply in the case where the exploration area is not more than twenty square kilometres.

Article [_] Renewal for small scale development minerals licences

(1) Subject to the provisions of subsection (2), a minerals permit shall be

valid for such period, not exceeding five years, as the [Regulating Authority] may determine and may, on application made to the [Regulating Authority], be renewed for further periods not exceeding five years at a time.

(2) An application for renewal of the minerals permit shall be submitted no later than such period of time prior to the expiration date of the minerals permit as the [regulating authority] shall establish by regulation.

(3) The application for renewal shall provide the information and accompanying documents required by [ First Schedule], which requires:

(a)Identification of the applicant and its partners/directors/members/shareholders,

(b)Description of the area applied for (including a map and coordinates),

(c)Particulars of the minerals for which the permit is sought,

(d)The period for which the permit is sought, and

(e)The proposed programs of work, including –

(i) Details of the mineral deposit,

(ii) estimated date by which applicant intends to work for profit,

(iii) estimated capacity of production and scale of operations, nature of product,

(iv) envisaged marketing arrangements for sale of mineral product(s),

(v) Brief environmental impact assessment study and

(vi) Brief environmental reclamation program.

Article [_] Renewal for artisanal development minerals licences

(1) Subject to subsection (2), an artisanal exploration mining licence shall be valid for a period of one year and may be renewed for up to three further periods not exceeding one year at a time.

(2) An artisanal mining licence shall not be renewed pursuant to subsection (1)–

(a)if the artisanal mining licence area has ceased to be an area declared for artisanal mining operations;

(b)in respect of any mineral which has ceased to be a mineral prescribed for artisanal mining operations;

(c)unless the [Regulating Authority] is satisfied that the applicant has carried on, in good faith, within the limits of its competence and resources, mining operations in the artisanal mining licence area and intends to continue doing so;

(d)if the applicant has not carried out effective rehabilitation and reclamation of the applicant’s mined out areas to the satisfaction of the [Regulating Authority] and authorities responsible for the protection of the environment or paid the prescribed fee;

(e)if the applicant has not reported diligently on its mining operations; or

(f) if the applicant is in default and the [Regulating Authority] is not prepared to waive the default.

Annotation

Drawn from Tanzania’s mining law (2010), this provision clearly states the conditions under which the exploration (called prospecting) Licencee is entitled to renewals, when the applications must be filed, and the length of the renewal terms.

The terms of exploration licences for metallic and processed minerals decline from 4 years to 3 years for the first renewal and 2 years for the second and third renewals. (For gemstones other than diamonds, there is only a one-year initial term, non-renewable.) An exploration licence for such minerals can therefore be held for up to 11 years in Tanzania, which also provides for the issuance of a retention licence for a term of 5 years, renewable once for a like term, if the required justification is demonstrated. Reduction of the surface area by half is required at each renewal, but not below 20 square kilometres.

By contrast, the one-year terms of exploration licences for gemstones other than kimberlitic diamonds and for building materials are not renewable.

Drawn from Botswana’s mining law (1999), this provision enables the regulating authority to grant multiple renewals of an SSM licence for renewal terms of up to five years. This provides flexibility in light of the fairly short term (5 years) of the SSM licence. However, in light of the definition of SSM in Botswana’s mining law, which includes limits on annual production and investment, it seems unlikely that an SSM licence holder will be able to obtain multiple renewals while retaining SSM status. Nevertheless, the potential availability of unlimited renewals enables very small scale subsistence miners to maintain their rights for as long as they can continue to profitably produce marketable mineral products from their licenced areas while remaining within the definition of SSM. This reflects, in part, a poverty reduction strategy.

The renewal application is the same as the initial licence application, thus assuring that a renewal is justified by the nature of the deposit and the planned work program, and adjusting the related environmental protection measures accordingly.

The deadline for submitting a renewal application, if any, is set in the regulations. Unfortunately, the mining law does not contain a provision that automatically extends the validity of the SSM licence until the final administrative decision on a renewal application is issued.

Drawn from Sierra Leone’s mining law (2009), the regulations applicable for artisanal mining in development minerals state that the licence is in general renewable, unless the area or the mineral covered are not considered anymore subject of artisanal activity.

30.9 Example 2

Article [_] Renewal for large scale development minerals licences

(1) The holder of an exploration licence may, not later than ninety calendar days before the initial expiry of the licence, apply to the Mining Cadastre Office for a first renewal of the licence in respect of not more than one hundred and twenty-five square kilometres of the exploration licence area, except that where the results of exploration to date strongly indicate the presence of widespread mineralisation such that a surrender to one hundred and twenty-five square kilometres would result in some highly prospective areas being surrendered, the [Regulating Authority], on the advice of the Minerals Advisory Board, may exceptionally allow such areas constituting more than one hundred and twenty five square kilometres to be retained.

(2) An application for the first renewal of an exploration licence-

(a)shall be accompanied by-

(i)a detailed annual report as prescribed describing all operations carried out in the previous year together with an annual financial report for the same period, plus a surrender report as prescribed, covering in detail all work carried out over any portion of the ground to be surrendered and accompanied by all results, data, information and interpretation since the grant of the exploration licence;

(ii)a proposed programme of exploration operations to be carried out during the period of first renewal and the estimated cost thereof;

(iii)a plan identifying that part of the exploration licence area for which renewal is sought;

(iv)a description of the contiguous blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner; and

(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs [_] of section [_] (on the required elements of an application for an exploration licence).

(3) The Mining Cadastre Office shall forward an application for the first renewal of an exploration licence to the Minerals Advisory Board.

(4) Upon receipt of a completed application for the renewal of an explorations licence from the Mining Cadastre Office, where the [statutory advisory board] has determined that an application for the renewal of an exploration licence has met all the criteria for such licence the [statutory advisory board] shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.

(5) The [Regulating Authority] shall, subject to all prescribed criteria of this [Law][Act][Code] and of the regulations, on the certified advice of the Minerals Advisory Board, renew the licence for the reduced area applied for with or without variation of the conditions of the initial licence, for a period not exceeding three years.

(6) The holder of an exploration licence may, not later than ninety calendar days before the expiry of a once-renewed licence apply to the Mining Cadastre Office for a second renewal of the licence.

(7) An application for the second renewal of an exploration licence-

(a)shall be accompanied by-

(i)a report on exploration operations carried out so far and the direct costs incurred thereby;

(ii)a proposed programme of exploration operations, feasibility studies, and environmental impact assessments to be carried out during the period of second renewal and the estimated cost thereof;

(iii)a plan identifying that part of the exploration licence area for which renewal is sought, which shall not be greater than one hundred and twenty-five square kilometres unless it can be conclusively demonstrated that to do so would unavoidably exclude part of an economically recoverable mineral deposit;

(iv)a description of the blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner;

(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs (a), (f), (h), (j) and (k) of section [_] (on the required elements of an application for an exploration licence); and

(c) shall provide evidence that a mineral discovery has been made that may be of commercial value.

(8) The Mining Cadastre Office shall forward an application for the second renewal of an exploration licence to the Minerals Advisory Board.

(9) Upon receipt of a completed application for the second renewal of an explorations licence from the Mining Cadastre Office, where the Minerals Advisory Board has determined that an application for the second renewal of an exploration licence has met all the criteria and where the holder of an exploration licence who has made and reported a discovery of possible commercial value, the Board shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.

(10) The [Regulating Authority] shall on the certified advice of Minerals Advisory Board confirming all prescribed criteria of this [Law][Act][Code] and of the regulations have been met, renew the licence for a period not exceeding two years.

(11) The applicant shall be notified in writing of the decision on renewal applications, and if an application is refused, the [Regulating Authority] shall give reasons for such refusal.

(12) Where the [Regulating Authority] has refused an application to renew an exploration licence that is renewable and the cause given by the [Regulating Authority] for such refusal can be remedied by the holder of the licence, if the cause has been remedied with thirty calendar days of receiving the notice under subsection (11), the licence holder may reapply for a renewal of the licence within such thirty day period.

Article [_] Renewal for small scale development minerals licences

(1) A holder of a small-scale mining licence may apply to the [regulating entity] at least sixty days before the expiry of the small- scale mining licence, for the renewal of the licence in the prescribed manner and form upon payment of the prescribed fee.

(2) Subject to subsection (3), the [Regulating Authority] shall, where an application for the renewal of a small-scale mining licence complies with the requirements of this [Law][Act][Code], renew the small-scale mining licence for a period not exceeding ten years, on such terms and conditions as the [Regulating Authority]] may determine.

(3) The [Regulating Authority] shall reject an application for the renewal of a small-scale mining licence where-

(a) the development of the mining area has not proceeded according to the programs initially agreed;

(b) minerals in workable quantities do not remain to be produced;

(c) the program of the intended mining operations will not ensure the proper conservation and use in the national interest of the mineral resources of the mining area; or

(d) the applicant is in breach of any condition of the licence or any provision of this [Law][Act][Code].

(4) The [Regulating Authority] shall not reject an application on any ground referred to in—

(a) paragraph (a) of subsection (3), unless the [Regulating Authority] has given the applicant the details of the default and the applicant has failed to remedy the default within three months of the notification;

(b) paragraph (b) of subsection (3), unless [Regulating Authority] has given the applicant reasonable opportunity to make written representations thereon to the [Regulating Authority] or (c) paragraph (c) of subsection (3), unless the [Regulating Authority] has notified the applicant and the applicant has failed to propose amendments to the operations within three months of the notification.

(5) The [Regulating Authority] shall, on the renewal of a small-scale mining licence, attach to the licence the approved program of mining operations to be carried out in the period of renewal.

2. Renewal of small-scale gemstone licence

(1) A holder of a small-scale gemstone licence may apply to the [Regulating Authority] at least sixty days before the expiry of the licence, for the renewal of the licence in the prescribed manner and form upon payment of the prescribed fee.

(2) Subject to subsection (3), the [Regulating Authority] shall, where an application for the renewal of a small-scale gemstone licence complies with the requirements of this [Law][Act][Code], renew the small-scale gemstone licence for a period not exceeding ten years, on such terms and conditions as the [regulating entity] may determine.

(3) The [Regulating Authority] shall reject an application for renewal of a small-scale gemstone licence where—

(a) the development of the mining area has not proceeded with reasonable diligence;

(b) minerals in workable quantities do not remain to be produced;

(c) the programme of the intended mining operations will not ensure the proper conservation and use in the national interest of the mineral resources of the mining area; or

(d) the applicant is in breach of any condition of the licence or any provision of this [Law][Act][Code].

(4) The [Regulating Authority] shall not reject an application on any ground referred to in—

a) paragraph (a) of subsection (3), unless the [Regulating Authority] has given the applicant the details of the default and the applicant has failed to remedy the default within three months of the notification;

(b) paragraph (b) of subsection (3), unless the [Regulating Authority] has given the applicant reasonable opportunity to make written representations thereon to the [Regulating Authority]or

(c) paragraph (c) of subsection (3), unless the [Regulating Authority] has notified the applicant and the applicant has failed to propose amendments to the operations within three months of the notification.

(5) The [Regulating Authority] shall, on the renewal of a small-scale gemstone licence, attach to the licence the program of mining operations to be carried out in the period of renewal.

Article [_] Renewal for artisanal development minerals licences

(1)Artisanal licences would be renewed in terms of one (1) year, upon petition of the licensee, renewal that shall automatically.

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision sets the initial exploration term of four years for large scale exploration licences that can be renewed twice, for 3 years and 2 years respectively. This gradual reduction in term length encourages the licence holder to focus on the most prospective sites within the licenced area and to conduct its exploration program expeditiously.

Unlike Tanzania, Sierra Leone’s mining law does not provide for a retention licence. Thus, an exploration licence may be held for a maximum period of 9 years in Sierra Leone. That period is likely to be sufficient for the identification of a small to medium sized commercial deposit and completion of the requisite environmental and feasibility studies in order to progress to the exploitation phase, but the 9 year limit may be problematic for the detailed study of a complex or very large scale deposit in a challenging environment.

The article requires a mandatory reduction in size of the area to a maximum of 125 square kilometres for the first renewal that may be waived upon the requisite showing to the Minerals Advisory Board and the Regulating Authority. No further reduction of area is required for the second renewal.

Renewals are not automatic under Sierra Leone’s law. The licence holder is required to submit a detailed annual report of operations carried out and results achieved, as well as a proposed exploration work program for the requested renewal period. The renewal must be approved by the Minerals Advisory Board.

Drawn from Zambia’s mining law (2008), the provisions related to small scale mining exploration licence provide for a single renewal of an SSM or small-scale gemstone mining licence for a renewal term of up to ten years. As in the preceding example, the regulating authority is given the discretion to set the renewal term shorter than the maximum period established in the law. However, under Zambia’s mining law only a single renewal is contemplated, rather than multiple renewals. As in the preceding example, the renewal term is the same as the initial term of the licence, but the term under Zambia’s law is twice as long as the term in Botswana.

The longer initial and renewal terms for both SSM and small scale gemstone mining (SSGM) reflect the Zambian policy orientation of creating special subsectors for SSM and SSGM reserved for Zambian citizens, in order to promote local mining entrepreneurship. (SSM and SSGM are not defined by production or investment limitations under Zambia’s mining law.)

In contrast to Botswana’s law, the Zambian mining law limits the grounds on which the regulating authority can reject a renewal application, and further requires the regulating authority to provide the licence holder with notice and an opportunity to remedy three of the four potential grounds for non-renewal. This provides some security of tenure to small scale miners. There is, however, a significant gap in this protection by omitting a requirement of notice and opportunity to remedy a “breach of any condition of the licence or any provision of” the mining law. Nonrenewal for a temporary breach of a minor condition under the act, with no opportunity to cure the breach, is a potentially harsh penalty. SSM licence holders in Zambia are vulnerable to nonrenewal on such grounds because the regulating entity has the discretion to deny renewal on any such breach.

Zambia maintains parallel licensing regimes for SSM and small-scale gemstone mining. The former requires the applicant for an SSM licence to possess an exploration licence (prospecting permit) for the area as a prerequisite to obtaining a SSM licence. That is not required for a small-scale gemstone mining licence. Small scale gemstone mining is often characterized by “rushes” of small scale miners to sites where someone else has made an initial discovery, so the lack of a prospecting permit requirement matches that reality with the objective of formalizing small scale gemstone mining activity as much as possible.

The provisions of Zambia’s mining law on the term and renewals of SSM licences and small scale gemstone licences are identical, however. In both cases the regulating authority is directed to attach the approved work program to the renewed licence, such that it becomes a condition of the licence.

Drawn from Liberia’s mining law (2000), the renewal of the artisanal scale mining licence is suggested to be a simple and straight forward process, in order to encourage formalization of the sector.