Contributed By GENI & KEBE
The mineral deposits in the soil and subsoil are owned by the Republic of Senegal.
The mining industry is mainly regulated by the following rules:
Mining is regulated by the rules in 1.2 Regulation of Mining Industry, while oil and gas are governed by Law No 98-05 of 8 January 1998 on the Petroleum Code and its implementation decrees.
The main governmental bodies administering the mining industry include the following:
Prospection authorisation is required, which is issued by the mining administration.
An exploration permit or production-sharing agreement in certain cases is required to conduct exploration. Exploration rights are issued by the Ministry of Mines and Geology.
The following permits are required to conduct mining, depending on the activity performed:
Exploration and mining require a prior environmental impact assessment, which will be approved by the Directorate of the Environment and Classified Establishments.
In addition, the exploration and mining of radioactive mineral substances are subject to a favourable opinion given by the Senegalese Authority for Radiation Protection and Nuclear Safety (ARSN) concerning the plans and programmes for monitoring and radiological protection related thereto.
A prospection authorisation confers a non-exclusive right to prospect for specified substances within the territory of the Republic of Senegal or in a specified area of the territory for a six-month maximum term, renewable once.
An exploration right confers an exclusive right to the holder ‒ within the perimeter, on the surface and at indefinite depth – to explore the mineral substances for which it is issued, for a term of four years, renewable twice. In addition, the holder has the right to acquire a mining right if he or she has demonstrated the existence of a commercially exploitable deposit or to acquire an exploration right if he or she discovers a new mineral substance within the prospecting perimeter. It is still possible for the holder to transfer his or her exploration right.
A mining permit confers an exclusive right to mine and dispose freely of the substances for which the said mining licence is granted, within the limits of the perimeter allocated and indefinitely at depth, for a term between five and 20 years renewable. The holder also has the right to renew, extend, surrender, transfer or lease the tile. The holder has the right to transport commodities extracted to a storage/processing site and to sell them.
A small-scale mining permit confers to the holder ‒ within the perimeter granted and at indefinite depth ‒ the exclusive right to prospect and mine through semi-industrial or industrial processes the mineral substances for which the permit was issued, for a term of five years renewable.
A semi-mechanised mining permit confers to the holder within the perimeter granted, and to a depth of 15 metres, the right to mine through semi-mechanised methods and processes the mineral substances for which the permit was issued, for a term of three years renewable.
An artisanal mining permit confers to the holder the right to extract and concentrate the mineral substances and recover the merchant products through traditional processes, for a term of five years renewable.
To prospect, explore or exploit the mineral deposit, the mining rights-holders must inform the mining administration about the methods and results of their activity, and keep accounting for their transactions according to legal provisions, as well as respect human rights, transparency, social and environmental requirements.
The holder of a prospecting authorisation must inform the mining administration about the result of his investigation.
The holder of an exploration right must perform the annual programme of exploration activities within the term of his or her right, spend the minimum of his or her approved exploration working programme and request a mining right if there is proof of a commercially exploitable deposit. In addition, the holder must submit his or her purchase agreements as well as other agreements, including a lease contract regarding his or her mining right, to the Ministry of Mines and Energy for approval.
The mining title-holder must regularly inform the minister in charge of mines about the results of his or her activity. He or she must also fulfil within the legal timelines the financial requirements as provided by the mining convention he or she signed with the State.
The title-holder has a right of land occupancy throughout the national territory in accordance with the specific laws and regulations, including declaration of the public utility of this activity and obtaining of occupancy authorisation. The holder may also provide as security (mortgage) the real property rights attached to the mining title, which, in this case, is subject to the same regime as the traditional land title. In addition, the holder has the right to transfer or lease his or her title, as well as to renew, extend or surrender it.
The title-holder must indemnify landowners and the State if any due to prejudice resulting from his or her land occupancy and to comply with human rights requirements.
The holder of exploration and mining rights proceeds to the rehabilitation of the sites covered by his or her mining title at the end of the title. He or she is obliged to open and maintain a trust account at a specialised public institution designated by the State.
The following environmental laws affect the mining industry:
The Ministry of the Environment and Sustainable Development, and its district departments are the main governmental bodies with environmental competencies.
See 2.4 Environmental Requirements to Conduct Exploration and Mining and 3.5 Duties of the Title-Holder at End of the Title.
On principle, there are no special rules or taxes for foreign people or companies, except for specific provisions provided by international tax conventions. Companies are subject to the local fiscal regime. In addition, people are subject to the local fiscal regime as tax residents. If they are not tax residents, they are in principle subject to non-commercial benefit tax (BNC) regarding their revenues. On the other hand, a repatriation tax is due to the State from foreign people residing in Senegal during their stay, which is paid once.
Mining activities may be prohibited in protected zones established by order of the minister in charge of mines.
Mining activities may be restricted in classified forests.
Indigenous and ethnic communities benefit from mining revenues through the Support and Equalisation Fund (20% of mining revenues) and the Local Development Support Fund (0.5% of turnover excluding taxes realised by mining companies). In addition, they have the right to be indemnified when their ownership is affected as landowners (as mentioned in 3.3 Rights Acquired by the Title Holder).
Prospection authorisation can be revoked for breach of any obligation provided by the Mining Code. An exploration right can also be revoked for breach of any obligation provided by the Mining Code, including suspension of activities for six months without legitimate motivation or persistent inactivity, no payment of taxes and royalties, and lack of requesting a mining right while there is proof of a commercially exploitable deposit. An exploration right may also be revoked in the case of transfer of this right without prior approval by the Ministry of Mines and Geology.
The mining right can be revoked because of continuing inactivity, suspension or serious restriction of mining without reasonable grounds; illegal acquisition of right, including by corruption; non-payment of taxes or royalties; lack of regular register of sale of mining products; and for a legal or contractual breach, including a serious breach of health, security and environmental rules. In addition, the mining right can be revoked in the case of transfer of this right without prior approval of the Ministry of Mines and Geology.
In addition to state free carry rights of 10% in the mining company, the following taxes and royalties must be paid by title-holders, except in cases of specific tax-exemptions: