Mining 2023 Comparisons

Côte d’Ivoire is currently experiencing a mining boom. The contribution of the mining sector to the country’s economy is expected to grow rapidly.

The Ivorian mining sector is dominated by manganese and gold production.

Forecasts announce a general increase in the production of the various commodities exploited in Côte d’Ivoire, including gold production, which is expected to reach 60 tonnes in 2023 with the start of production at the Floleu and Zoukougbeu gold mines. Manganese production is expected to increase to 1.75 million tonnes in 2023 and nickel production is expected to reach 1.8 million tonnes in 2023.

Bauxite production should increase with the resumption of mine activities to 1.728 million tonnes in 2021 and 750,000 tonnes of non-metallurgical bauxite ore in 2022, in accordance with amendment No 1 of the mining convention between the State and the company Lagune Exploitation Bongouanou, which provides for the export of two million tonnes of bauxite from 2020 to 2022.

Finally, diamond production is expected to resume its progression and reach 5,100 carats in 2023.

The legal system is based on civil law.

At a local level, the main sources of mining legislation in Côte d’Ivoire are:

• Law No 2014-138 of 24 March 2014, related to the Mining Code and the Decree dated 25 June 2014 implementing the Code;
• Ordinance No 2014-148 of 26 March 2014, fixing surface royalties and proportional taxes for activities governed by the Mining Code;
• Decree No 2014-632 of 22 October 2014, fixing the amounts and determining the methods of payment of fixed fees, option fees, fees for inspection, expertise, approval and issuance of maps and other documents related to geological and mining activities;
• Law No 96-766 of 3 October 1996 on the Environment Code; and
• The Ivorian Labour Code.

These are in addition to the public health code, the water code, the forest code, the civil code, the penal code and the tax code.

On a regional level, in addition to the African Mining Vision and the UEMOA Mining Code, Côte d’Ivoire is a member of the Economic Community of West African States (ECOWAS).

C/DIR.3/05/09 directive on the harmonisation of guiding principles and policies in the mining sector in 2009, the main objectives of which are to harmonise mining laws in the region, to improve transparency and to protect the environment and local communities, is also applicable.

A Supplementary Act to the ECOWAS Mining Code was approved on 29 June 2019, to ensure that the local communities benefit from the revenues arising from mining operations.

At an international level, in terms of transparency, Côte d’Ivoire joined the Kimberley Process Certification Scheme in 2013, with the aim of stopping the traffic of conflict diamonds. Côte d’Ivoire also joined the Extractive Industries Transparency Initiative (EITI) in 2006.

Article 3 of the Mining Code stipulates that all mineral substances, all mineral waters and all geothermal deposit contained in the ground and subsoil, the territorial waters, in the exclusive economic zone and on the continental shelf as well as its expansion beyond the two hundred sea limits up to the treaty limits internationally recognised by the Côte d’Ivoire are the property of the State. In order to undertake mining activities in Côte d’Ivoire, companies shall be granted a mining title.

The State, alone or in partnership with third parties, may carry on a mining activity in accordance with the conditions provided for in Article 6 of the Mining Code. This Code grants, through the Ministry of Mines and Geology, all the mining titles/authorisations and regulates the mining sector.

The State’s granting of exploitation permits grants the State, in consideration of the wealth distributed and the impoverishment of the subsoil, the right to the allocation of contribution shares set at 10% of the capital of the exploitation company during the entire lifespan of the mine. The State may not be required to make any financial contribution for the contribution shares even in the event of a capital increase. In any event, the State’s share shall continue to be equal to at least 10% of the capital of the exploitation company. Any State-paid participation in the capital of operating companies shall be determined by negotiation of party agreements at market conditions. This participation is contributive and does not exceed 15% of the capital of the exploration company on the date of its acquisition. The limit of the State’s paid participation does not take account of shares held by State companies and majority public financial participation companies. Notwithstanding the foregoing, the State may hold an unlimited contributive participation in the capital of the exploitation company of a deposit in which the State has invested as from the deposit exploration and identification phase (Article 11 of the Mining Code).

Mineral rights are granted by the State by authorisation or permit, as described below.

The exploration permit grants the exclusive right to explore for substance of mines, as well as the right to dispose of products extracted as part of the exploration. It grants its holder the exclusive right to request, at any time during the validity of the exploration permit, and to obtain, if it has fulfilled its obligations under the Mining Code, an exploitation permit in the event of the discovery of one or more deposits within the perimeter of the exploration permit. The exploration permit constitutes an indivisible interest in movables which cannot be farmed out in consideration of a fee or be pledged or mortgaged.

The exploitation permit grants the exclusive right to exploit deposits within the limits of its perimeter. The exploitation permit includes, in accordance with current laws and regulations, authorisation to transport or have transported the extracted mining substances, their concentrate or their primary by-products, as well as the metals and alloys of those substances up to the place of storage, treatment or loading, to dispose thereof on domestic and foreign markets and to export them. The exploitation permit also authorises the setting up, in accordance with current regulations, of facilities for the packaging, treatment, refining and processing of mining substances, as well as the utilities related to the purpose of the permit. The exploitation permit is an indivisible right in rem. It may be mortgaged subject to the prior approval of the Minister for Mines in accordance with the conditions provided for by decree.

The prospection authorisation grants a non-exclusive prospection right which is valid for all substance of mines. The prospection authorisation does not grant its holder any preference for the later obtaining of a mining title, or a mining or quarry exploitation authorisation. It does not grant the right to dispose of the substance of mines discovered for commercial purposes.

The semi-industrial mining exploitation authorisation grants the exclusive right to exploit substance of mines for which it is issued.

The non-industrial mining exploitation authorisation grants the exclusive right to exploit substance of mines for which it is issued.

The authorisation to exploit quarry substances grants, within the limit of its perimeter, the exclusive right to exploit quarry substances thereon.

The granting authority is national, represented by the Ministry of Mines and Geology.

Mineral rights are granted by act (please refer to 1.5 Nature of Mineral Rights).

The Exploration Permit

The exploration permit is valid for a four-year period as from its date of allocation. It may be renewed twice for a successive period of three years.

An exploration permit holder is automatically entitled to request and obtain an exploitation permit at any time during the exploration period provided that it has carried out all its obligations and that a feasibility study has proven the existence of one or several deposits within the perimeter of the permit.

This permit can be assigned or transferred upon obtaining approval from the Minister, which is automatically granted if the applicant has fulfilled all its obligations pursuant to the Code.

The permit may be withdrawn, without compensation and following an unsuccessful 60 days’ formal notice if the permit holder does not comply with all its obligations and commitments, such as providing proof of the constitution of the banking reserve, payment of taxes, royalties and duties, not carrying out exploitation activities within the exploration perimeter, or delaying or suspending exploration work for more than six months.

The Exploitation Permit

This permit is granted for the lifespan of the mine as specified in the feasibility study without the initial validity period being longer than 20 years. It is renewable for successive periods of ten years at most.

A deferral or a suspension of the exploitation may be granted by order of the Minister for Mines upon application by the holder of the exploitation permit in the event of persistent adverse market conditions or force majeure. The deferral or the suspension is authorised for a period of two years and may be renewed once only for an extra period of one year.

The Mining Title

The activities of exploration and exploitation of mining substances are subject to an application for a mining title.

The mining title is renewable upon application by the holder presented at least three months prior to the expiry of the current validity period. The renewal of the mining title is by right when the holder has complied with its obligations. The holder of the mining title enjoys rights related to its title as long as a refusal of renewal has not been notified to it. The conditions of renewal of the mining title are specified by decree.

The mining title is assignable or transferable subject to the prior approval of the Minister for Mines and in accordance with the conditions provided for by decree. Any agreement thus concluded may be executed only subject to the condition precedent of the authorisation. The approval of the Minister for Mines is by right when the holder of the mining title has complied with its obligations under the Mining Code.

The holder of the mining title may be authorised to waive, without penalty or indemnity, all or part of the surface area of the perimeter of the title, as well as the mining title itself. The waiver is approved by the Mines Administration in accordance with the conditions provided for by decree. This approval is subject to the payment of amounts owed to the State on the date of the waiver and on the execution of work relating to the protection of the environment and the rehabilitation of sites.

The Prospection Authorisation

The period of validity of the prospection authorisation cannot be more than one year. It can be renewed exceptionally in accordance with the conditions defined by decree.

The prospection authorisation is not assignable, transferable or cannot be farmed out. It may be waived without penalty or indemnity, and is granted or withdrawn by order of the Minister for Mines, in accordance with the procedures and conditions determined by decree.

The Semi-industrial Mining Exploitation Authorisation

The semi-industrial mining exploitation authorisation is valid for a period of four years, which is renewable in accordance with the conditions specified by decree. It is not assignable, but transferable in accordance with the conditions set by decree.

The beneficiary of the semi-industrial mining exploitation authorisation may waive all or part of the surface area of the plot, as well as the authorisation itself, without penalty or indemnity, subject to notification to the Minister for Mines. The waiver implies the restoration of the exploited site.

The semi-industrial mining exploitation authorisation may be withdrawn by the Minister for Mines in accordance with the conditions set by decree.

The Non-industrial Mining Exploitation Authorisation

The non-industrial mining exploitation authorisation is valid for a period of four years, which is renewable in accordance with the conditions specified by decree. It is not assignable, but transferable in accordance with the conditions set by decree.

The waiver of all or part of a non-industrial mining exploitation authorisation is authorised, without penalty or indemnity, subject to notification to the Mines Administration. The waiver implies the restoration of the exploited site.

The non-industrial mining exploitation authorisation may be withdrawn by the Minister for Mines in accordance with the conditions set by decree.

The Authorisation to Exploit Quarry Substances

The authorisation to extract quarry materials is valid for a one-year period, which is renewable once only. The authorisation to extract expires six years later, when it has not been used within the specified period.

The authorisation to extract quarry materials is not assignable, transferable or cannot be farmed out.

It is granted only after the payment of the extraction tax related to the cubing for which it is requested. Any lawful occupant, or occupant of the ground, is required to obtain authorisation prior to any exploitation of quarries on their land.

The feasibility study includes the study of the project’s impact on the environment (earth, water, air, fauna, flora and human settlements).

This being said, mining activities must be carried out in such a way as to protect the quality of the environment, the rehabilitation of exploited sites and the conservation of the forestry assets.

Any applicant for an exploitation permit or an industrial or semi-industrial exploitation authorisation is bound, prior to undertaking any exploitation work whatsoever, to conduct and to submit the Environmental and Social Impact Assessment (ESIA) to the approval of the Mines Administration, the Environment Administration and any other services provided for under mining regulations.

The EIES must include an Environmental and Social Management Plan which includes a plan for the rehabilitation of sites and their estimated costs. Any substantial amendment of the Environmental and Social Management Plan is first authorised by the Mines Administration and the Environment Administration.

In view of protecting the health and well-being of populations neighbouring mining sites, inspections are carried out from time to time:

• by the holder of the exploitation permit or of the industrial or semi-industrial exploitation authorisation, at its expense, under its Environmental and Social Management Plan, as approved by the proper administrative structures; or
• by the proper administrative structures and, where applicable, by a body specialised in the area, appointed by the proper administrative structures, at the expense of said Administrations. In the event of extensive pollution recorded, the expenses of inspection, of subsequent checking and the related fines are charged to the holder of the exploitation permit or to the beneficiary of the exploitation authorisation, in accordance with the terms and conditions specified by decree.

The holder of an exploitation permit or the beneficiary of an industrial or semi-industrial exploitation authorisation is bound to implement the Environmental and Social Management Plan approved by the Mines Administration and the Environment Administration.

The holder of the exploitation permit or the beneficiary of an industrial or semi-industrial exploitation authorisation are subject to special laws and regulations governing, in particular, the protection of the environment, town planning, the establishments classified as being dangerous, insalubrious or inconvenient and the protection of forestry assets.

As from the beginning of the exploitation, an escrow account for the rehabilitation of the environment, domiciled in a leading financial institution in the Côte d’Ivoire, is opened. This account is used to cover the costs of the plan to rehabilitate the environment at the end of the exploitation. The amounts are paid into this account, according to a scale drawn by the proper administrative structures, and are recognised as expenses to determine the base for the tax on industrial and commercial profits. The holder of an exploitation permit or the beneficiary of an industrial or semi-industrial authorisation permit is bound to make contributions to this account. The terms and conditions applicable to contributions to and to the operating of escrow accounts are defined by decree.

Any application for an exploitation permit or an exploitation authorisation of industrial quarries is bound to provide, at the same time as the ESIA, a plan for the closing and rehabilitation of the mine. The closing and rehabilitation plan is submitted to the approval of the Administrations responsible respectively for mines and the environment. When changes in mining activities justify a modification of the closing plan, the holder of the mining title or the beneficiary of the authorisation to exploit industrial quarries is bound to submit it for review.

The closing plan must take account of the following aspects:

• the cleaning of the exploitation site;
• the dismantling and removal of mining facilities;
• the treatment and rehabilitation of the site;
• the post-rehabilitation surveillance of the site;
• the reconversion possibilities of the site; and
• the official return of the site to the proper authorities.

The closing and rehabilitation plan is drawn up in relation to the site and the type of exploitation.

The closing and rehabilitation plan must specify the methods provided for the dismantling and recovery of all components of the mining facilities, including the facilities and equipment specified in the implementing decree.

Specific zones may be defined for the protection of mining work around structures or infrastructures of public interest, as well as around any place where the general interest so requires, by order of the Minister for Mines, upon application by the concerned parties and following an investigation.

Some protected areas, such as closed properties, places of worship or cultural sites, cannot be subject to mining activities without the prior consent of the owners, occupants and concerned communities, as well as authorisation from the Minister of Mines. In addition, the Mining Code aims to protect the rights of local populations.

The State encourages holders of mining titles to favour the participation of Côte d’Ivoire nationals in the capital of mining companies. The State may make the authorisation to carry on an industrial mining activity governed by this law subject to the participation of nationals in the capital of companies set up for this purpose. This participation shall be determined at market conditions. The terms and conditions of participation of Côte d’Ivoire nationals in the share capital of exploitation companies are determined by decree.

Also, the Mining Code guarantees the right to a fair indemnity for the land’s occupants and legal owners in the event of occupation of the land. This indemnity will be paid following the signing, under the supervision of the mining administration, of a memorandum of understanding by the exploitation companies, the occupants and the legal owners. The use of land required for mining activities and work completed on the land may be declared as being in the public interest upon satisfaction of conditions provided under the applicable law.

It is mandatory to obtain the EIES before starting the exploration or mining phase.

To the authors’ knowledge, there are no specially protected communities in the country.

The State guarantees the respect, protection and implementation of human rights and of rights of local communities affected by the mining exploitation by overseeing the implementation of the social responsibility of mining companies.

The holder of the exploitation permit is bound to elaborate a community development plan in consensus with the neighbouring communities and the territorial and local administrative authorities, with precise goals and an investment plan.

The Mining Code in Côte d’Ivoire provides for ESIA, which is an analytical and prospective study relating to the identification and assessment of impacts of a project on the environment, the natural and human surroundings, in order to explain the negative or positive consequences thereof on the short, medium and long term and to propose measures to reduce or to eliminate the negative impacts.

In addition, the Code provides for a community development plan, which is a document drawn by the holder of an exploitation permit in consultation with the neighbouring communities and the administrative, territorial and local authorities, which specifies, in particular, the economic and social projects to be implemented for communities. The holder of the exploitation permit is furthermore bound to set up a fund to which contributions are made each year. The fund is dedicated to the implementation of socio-economic development projects for local communities drawn up in the community development plan. Said amounts are exempted from tax in relation to industrial and commercial profits. The terms and conditions applicable to contributions to, and to management of, this fund are specified in the mining regulations.

Furthermore, it provides for social responsibility of mining companies with regard to the impacts of its decisions and its activities on the community and on the environment, reflected by transparent and ethical conduct which:

• contributes to sustainable development, including to the health and well-being of the society;
• takes account of the expectations of the concerned parties, in particular, the neighbouring communities, the civil society and the authorities;
• respects current law and is compatible with national and international standards; and
• is integrated in the whole organisation and is implemented in its relations.

Finally, any holder of a mining title must comply with the principles and requirements of the Ecuador Principles to ensure that the projects to be financed are financed in a socially responsible manner and that they respect the environment, as well as Extractive Industries Transparency Initiative or EITI standard, the main goal of which is to reinforce governance by improving transparency and accountability in the extractive industries sector.

Further to the latest government initiatives and politics, mining companies are adjusting their situations and developing their internal processes in order to be in compliance with all environmental and community rules. 

In Côte d’Ivoire, the mining sector is not specifically affected by climate change initiatives.

However, the initiative “National REDD+ strategy of Cote d’Ivoire”, which is presented as a project aimed at reducing greenhouse gases due to deforestation and forest degradation, tackles the mining sector only with regard to its impact on deforestation.

In its 2017 version, available on the website of the REDD+ organisation, the national REDD+ strategy sets the following objective for the mining industry.

• Reduction objective – reduce deforestation attributable to mining exploitation by 70% by 2030 and compensate for residual deforestation, through the development of a mining sector with a small ecological footprint.

This reduction objective is broken down into specific objectives:

• rationalise gold panning to ensure better monitoring by the State;
• popularise good mining practices;
• rehabilitate degraded industrial mining areas; and
• establish a financial mechanism for the mining sector to restore the national forest cover.

No climate change legislation related to mining been passed to date, however the “draft bill on the fight against climate change” deals with the mining industry in its Article 54 by providing the following: “The feasibility study prior to the operation of an industry in the mining field integrates the impact of the project in terms of greenhouse gas emissions.”

Currently, the Ministry of Environment and Sustainable Development is implementing five programmes, one of which is related to the mining industry, being the National Climate Change Programme, which initiated a draft project to combat climate change, which provides in Article 54 that: “The feasibility study prior to the operation of an industry in the mining sector integrates the impact of the project in terms of greenhouse gas emissions”.

To date, there are no government or legislative initiatives related to the increasing demand for the so-called energy-transition minerals, such as lithium and nickel.

Tax Treatment for Exploration and Mining

Exploration and mining are activities subject to the tax regime provided for by the General Tax Code, the Mining Code, its implementing decrees and the mining conventions signed by the State of Côte d’Ivoire. Thus, mining companies are subject to the taxes, duties and levies applicable to their activities unless exempted by the Mining Code and its implementing decrees.

According to Law No 2014-138 of 24 March 2014 on the Mining Code, exploration and mining requires obtaining a mining title, namely the research permit and the operating permit obtained by paying the taxes and duties below.

Fixed duties

Article 149 of the above-mentioned law provides that applications for the grant, renewal, transfer, transmission, amodiation, mortgage or renunciation of mining titles and authorisations are subject to the payment of fixed fees.

Decree No 2014-632 of 22 October 2014 provides for the following fixed duties.

• For prospecting authorisation:
1. award: XOF300,000; and
2. renewal: XOF500,000.
• For the research permit:
1. award: XOF1 million;
2. first renewal: XOF1.5 million;
3. second renewal: XOF1.5 million;
4. exceptional renewal: XOF2 million;
5. transfer: XOF1 million;
6. transmission: XOF1 million; and
7. disposal: XOF3 million.

Regarding the operating permit, the amounts and terms of payment are as follows:

• for the license to operate geothermal deposits and mineral waters:
1. award: XOF1 million;
2. renewal: XOF1.5 million;
3. extension: XOF2 million;
4. transfer: XOF1 million;
5. transmission: XOF1 million;
6. disposal: XOF1 million;
7. amodiation: XOF500,000; and
8. deferred or suspension: XOF500,000;
• for the license to operate other mineral substances:
1. allocation: XOF5 million;
2. renewal: XOF7 million;
3. extension: XOF10 million;
4. transfer: XOF1 million;
5. transmission: XOF1 million;
6. disposal: XOF8 million;
7. amodiation: XOF4 million; and
8. deferred or suspended: XOF2 million; and
• for the export of samples: XOF50,000 per lot.

This fixed right shall remain with the State irrespective of the outcome of the application.

Annual land royalties (redevance superficiaire)

The Mining Code provides that the following are subject to payment of the annual surface royalty:

• the holder of a mining title;
• the beneficiary of a prospecting authorisation;
• the beneficiary of a craft or semi-industrial exploitation permit; and
• the beneficiary of a quarry substance operating authorisation.

The holder of a mining title is subject to the payment of an annual surface fee fixed per square kilometre or per hectare.

The fees for this are as follows:

• for prospecting authorisation:
1. allocation: XOF100,000 per square kilometre per year; and
2. renewal: XOF1,000 per square kilometre per year;
• for research permits:
1. attribution: XOF3,000 per square kilometre per year;
2. first renewal: XOF4,000 per square kilometre per year;
3. second renewal: XOF6,000 per square kilometre per year; and
4. exceptional renewal: XOF16,000 per square kilometre per year;
• for the operating permit for geothermal cottages and mineral waters:
1. attribution: XOF2,000 per hectare per year; and
2. renewal: XOF2,000 per hectare per year; and
• for licenses to operate other mineral substances:
1. attribution: XOF250,000 per square kilometre per year; and
2. renewal: XOF250,000 per square kilometre per year.

In addition to the holders of a mining title, the annual surface royalty is payable by:

• the beneficiary of a prospecting authorisation:
1. allocation: XOF1,000 per square kilometre per year; and
2. renewal: CHF1,000 per square kilometre per year;
• the beneficiary of a craft or semi-industrial exploitation permit:
1. allocation: XOF15,000 per hectare per year; and
2. renewal: CHF15,000 per hectare per year; and
• the beneficiary of an artisanal mining permit:
1. allocation: XOF4,000 per hectare per year; and
2. renewal: CHF4,000 per hectare per year.

The ad valorem tax

Under Article 151 of Law No 2014-138 of 24 March 2014 on the Mining Code, the holder of an operating permit is subject to the payment of an ad valorem tax based on turnover after deduction of transport costs (FOB price) and refining, if applicable.

The holder of a rough diamond mining licence is not subject to the ad valorem tax.

This tax is collected under the same conditions and according to the same procedures, penalties and securities as turnover taxes.

The ad valorem tax rates are as follows:

• for gold:
1. 3% when the selling price of an ounce of gold is less than or equal to USD1,000;
2. 3.5% when the selling price of an ounce of gold is greater than USD1,000 and less than or equal to USD1,300;
3. 4% when the price per ounce of gold is greater than USD1,300 and less than or equal to USD1,600;
4. 5% when the selling price of an ounce of gold is greater than USD1,600 and less than or equal to USD2,000; and
5. 6% when the selling price of an ounce of gold is greater than USD2,000; and
• for other metals:
1. 4% for other precious metals (silver, platinum, PGMs);
2. 3% for other precious stones (ruby, sapphire, beryl);
3. 3% for fine stones (zircon, aquamarine, garnet); and
4. 3.5% for base metals and non-ferrous metals (copper, ilmenite bauxite), etc.

Allocation to the State of contribution shares

The granting by the State of operating permits entitles the State, in return for the wealth distributed and the impoverishment of the subsoil, to the allocation of contribution shares fixed at 10% of the capital of the operating company, throughout the life of the mine. No financial contribution may be required from the State for these contribution actions even in the event of a capital increase (Article 7 of Law No 2014-138 of 24 March 2014 on the Mining Code).

Any additional participation by the State in the share capital of the operating companies is made by negotiation of agreements by the parties in line with market conditions. This participation is contributory and does not exceed 15% of the capital of the operating company. The limit on additional State participation does not take into account shares held by state-owned enterprises and majority-owned companies.

Notwithstanding the foregoing, the State may hold an unlimited contributory participation in the capital of the company operating a deposit for which the State has invested from the research and identification phase of the deposit.

Taxation of Foreign Investors

In principle, foreign investors are taxed under Ivorian law in the same way as local companies, subject to the existence of a tax treaty to avoid double taxation between Côte d’Ivoire and their country of residence. However, the mining permit must be held by an existing or future Ivorian company.

Investors and mining projects benefit from a number of tax incentives that vary according to the phases of their activities.

Tax Incentives During the Research Phase

During the research phase, certain benefits are granted. The materials, machinery and equipment included in the approved programme intended specifically and definitively for mining research operations and necessary for the realisation of the research programme, imported by the holder of the research permit and his subcontractors approved by the Administration for Mines, are exempt from customs duties, including value added tax (VAT).

The import exemption shall also extend to parts intended for research machinery and equipment. In all cases, the value of spare parts may not exceed 30% of the total cost-insurance-freight value of imported machinery and equipment. The list of materials, machinery and equipment eligible for exemption from import duties and taxes is submitted with the application for the research permit. When the research permit is issued, this list is attached to it as an integral part of it. Commercial vehicles included in the above-mentioned list shall be subject to temporary admission.

When certain equipment, materials or machinery to be imported are not on this list, a request for specific exemption is submitted to the Ministry in charge of the Economy, after approval of the list of those goods by the Ministry in charge of Mines.

The following shall not give rise to exemption from import taxation:

• materials, machinery and equipment whose equivalent can be found manufactured in Côte d’Ivoire or available at conditions of price, quality and guarantees among others, equal to those of the same goods of foreign origin;
• vehicles used for the transport of people and goods;
• furniture and other household effects;
• equipment not approved by the Administration of Mines and the Administration of Customs; and
• property not giving rise to the right to deduct, pursuant to the provisions of the General Tax Code.

The holder of a research permit also benefits from the following tax exemptions:

• taxes on profits;
• minimum flat-rate tax or its equivalent;
• land impôts; and
• deregistration rights on contributions made on the occasion of the joint venture or increase in the capital of companies.

Tax Incentives During the Exploitation Phase

The actual operating phase is preceded by an intermediate phase called the investment implementation phase, which consists of setting up the operating company.

During this phase of carrying out initial investments and the extension of the production capacity of an existing mine, the holder of an operating permit is exempt from customs duties, including VAT, levied on imports of materials, machinery and equipment and spare parts included in the approved programme and intended directly and definitively for mining operations.

For the purposes of the exemption provided for in this Article, the value of the parts may not exceed 30% of the total cost-insurance-freight value of the imported machinery and equipment.

The list of materials, machinery and equipment and parts eligible for exemption shall be annexed to the operating permit.

Commercial vehicles included in the above-mentioned list shall be subject to temporary admission.

For the actual operation phase, the operating permit holder, its affiliates and their approved subcontractors benefit from: 

• exemption from customs duties payable on liquid or gaseous fuels, lubricants, chemical or organic products necessary for the processing of ore, including VAT, throughout the period of operation of the mine;
• the temporary importation procedure for a period of three years from the date of first commercial production;
• exemption from export duties and taxes on the proceeds of the mine, including stamp duties throughout the life of operation;
• exemption from all export duties and taxes on material and equipment used to carry out the exploitation work when it was re-exported;
• the procedure for immediate removal for their imports of materials, machinery and equipment as well as products and consumables intended for investment or exploitation; and
• the procedure for the re-export of equipment benefiting from temporary admission.

In addition, the expatriate staff of the holder of the operating permit and direct subcontractors approved by the Administration of Mines, benefit, as regards personal effects, from exemption from duties and taxes for a period of one year from its first installation in Côte d’Ivoire, with the exception of community fees.

The holder of the operating permit is also exempt from VAT on its imports and foreign services, the acquisition of goods and services in Côte d’Ivoire and on sales in connection with mining operations until the date of first commercial production.

It is also exempt (Article 169) from:

• the tax on the land assets of built properties and the tax on the land heritage of unbuilt properties, excluding the property income tax, the hygiene and sanitation road tax, for its premises located outside the mining perimeter during the period of validity of the operating permit;
• the operating tax for the withdrawal of water from aquifers in the context of de-watering operations within the perimeter, during the period of validity of the operating permit;
• the felling tax within the perimeter of the permit during the period of validity of the operating permit, provided that the woody species are not sold;
• the contribution of patents, for the sole fact of the extraction and sale of the extracted materials, during the period of validity of the operating permit. This exemption does not extend to the processing of extracted materials;
• the tax on industrial and commercial profits and the flat-rate minimum tax for the first five years following the date of first commercial production. The net taxable profit is determined in accordance with the provisions of the General Tax Code; and
• the special equipment tax.

Finally, the holder of the operating permit benefits (Article 170) from a reduced rate of half concerning the income tax of claims on interest related to the financing of the operating company, granted in the form of loans of more than three years and holders of quarry operating authorisation benefit from the advantages of the Investment Code.

These tax advantages arising from the Mining Code apply to those under the General Tax Code. 

In addition, the Investment Code provides for a number of incentives for investors categorised into a declaration regime and an authorisation regime. These benefits generally consist of a tax credit chargeable against a list of taxes, duties and levies for a fixed period of up to fifteen years.

The Principle of Fiscal and Customs Stability

The WAEMU Community Regulations of Côte d’Ivoire ensure the stability of mining operators in their tax and customs conditions.

Under Article 17 of Regulation No 5/2002/CM/UEMOA of 23 May 2002 on the tax regime for government securities issued by WAEMU member states representing consolidated assistance from the Central Bank of West African States (BCEAO), the stability of the tax and customs regime is guaranteed to holders of mining titles during the period of validity of their titles. During the period of validity of these mining titles, the rules of assessment and assessment of taxes, duties and taxes provided for by the regulations in force remain as they exist on the date of issue of the mining titles and no new tax or imposition of any kind whatsoever is applicable to the holder or beneficiary during this period.

According to Ivorian legislation, the State guarantees the stability of the tax and customs regime for the holder of the operating permit. In the event of a more favourable tax and customs regime applicable in the mining sector, the holder of the operating permit may apply for the benefit of it, provided that he adopts it in its entirety (Article 164 of the Mining Code).

With regard to the duties and taxes due on transfers or capital gains in the event of the sale of a mining project, a distinction must be made between the transfer of the mining title (exploration and exploitation permit) and the transfer of the mining company as such.

Taxes Due on the Transfer of Mining Title

The transmission of a research permit is also subject to a fixed fee of XOF1 million. As for the operating permit, its transfer is also subject to a fixed fee of XOF8 million.

As mining title is considered by the Mining Code as a real property right (Article 31 of the Mining Code), its transfer is subject to registration fees at the rate of 4% and the land registration tax of 1.2% in addition to fixed rights.

The capital gain realised by the transferring company is subject to corporation tax at the rate of 25%. If it is a natural person, a levy of 15% must be applied in accordance with Article 762 of the CGI.

Taxes Due on Capital Gains Realised in the Event of the Sale of a Mining Company

The sale of a company entails the immediate taxation of untaxed profits (Article 71 CGI).

A declaration to the tax authorities must be made within ten days of the transfer, which entails immediate taxation of the results of the last financial year closed. The registration fee for a transfer of business is 10%.

On the other hand, when the transfer has taken the form of a transfer of shares, it will be necessary to pay the registration fee of 1% and the capital gains tax under the aforementioned conditions.

Côte d’Ivoire is the leading economic powerhouse of francophone West Africa, enjoying strong and consistent economic growth over the last decade.

The attractiveness of the Ivoirian economy is, in principle, due to the major overhauls to the legal sector that have intervened over the last decade. Most notably, the new Mining Code introduced in 2014, which provided a number of significant improvements over the 1996 Mining Code.

Finally, the new Mining Code provides for a number of fiscal and custom advantages to favour significant investments in the mining sector. Indeed Articles 164 et seq. of the Mining Code provide, during the initial investment phase and capacity extension, for an exoneration of customs duties and VAT for the importation of material, machines and equipment related to mining operations. This also includes customs duties exonerations for fuel, lubricants and other liquids used in mining operations and for the length of operation of the mine.

Please also note that pursuant to Article 171, the holders of an exploitation permit may benefit from the dispositions of the Investment Code.

The combined incentives drawn from both the Mining Code and the Investment Code in Côte d’Ivoire have created a very attractive business environment for both foreign and domestic investors, especially in the mining sector. 

Generally speaking, Foreign Direct Investment (FDI) in Côte d’Ivoire does not require specific review or approval.

The constitution of foreign investments in a WAEMU member state is free under the WAEMU treaty.

In addition, the Ivorian Investment Code provides for a certain number of guarantees in favour of any foreign investor, subject to bilateral, regional and multilateral agreements signed by the State. These are guarantees of fair and equitable treatment, freedom to invest in each sector provided for in the Code, absence of restrictions on obtaining the foreign currency necessary for the exercise of the investor’s activities, and freedom to appoint members of the board of directors, general manager or manager, etc.

However, all FDI is subject to a declaration for statistical purposes to the Directorate of External Finances and to the Central Bank of West African States (La Banque Centrale des États de l’Afrique de l’Ouest or BCEAO), where it concerns direct investments (pursuant to Regulation No 09/2020/CM on external financial relations).

Furthermore, there are certain specific sectors in which foreign investors will be subject to administrative approval/declarations depending on the activity. This is notably the case in the mining sector (Ministry of Mines and Geology).

Indeed, pursuant to Law No 2014-138 of 24 March 2014 on the Mining Code, any natural or legal person, of Ivorian or foreign nationality, may undertake or conduct an activity governed by this law on Ivorian territory, provided that they first obtain a mining title or authorisation.

The granting of a mining permit obliges its holder to create a company under Ivorian law with the exclusive purpose of exploitation of the deposit for which the permit was issued.

Similarly, the research permit is granted by decree, subject to prior rights, to any individual or legal entity under Ivorian law.

Côte d’Ivoire is signatory to, and a member of, the Equator Principles, the Kimberley Process and the Initiative for Transparency in Extractive Industries (ITEI).

The Equator Principles are a set of referential rules of the financial sector that ensure that finance projects are conducted and realised in a socially responsible and environmentally friendly manner.

The Kimberley Process is a common initiative regrouping the governments, diamond industries and civil society entities that are engaged in following conditions for controlling the production and commerce of raw diamonds as regulated by the Certification System of the Kimberley Process.

The ITEI is an international norm put in place by a coalition of governments, corporations, civil society, investors and international organisations with the goal of reinforcing good governance practices by improving transparency and accountability in the extractive industry.

Other than the above the authors have not identified any other treaties of which Côte d’Ivoire is a part of for the protection of investments in exploration and mining.

The WAEMU capital market is composed of:

• the money market, supervised by the BCEAO, with the interbank market and the market for negotiable debt, open to all economic agents; and
• the financial market, with the Primary Market (based on the issuance of new shares and bonds) and the Secondary Market (organised by the Regional Stock Exchange (BRVM), where securities already issued are traded).

The highest financial market authority is the Regional Council for Public Savings and Financial Markets (CREPMF), which is responsible for organising and controlling public offerings and for supervising operators.

Sociétés Anonymes (SAs) with representation in the WAEMU and with share capital of XOF10 million can only access the markets through a public offering.

On a practical note, although there is significant regional capital, most investments for industrial-grade mines are undertaken via structured finance deals with funds being provided in great part by foreign commercial or development banks.

For smaller operations, investments are sourced from national and regional investors, mainly from large regional commercial banks.

The BRVM is the regional financial market of the BCEAO and WAEMU region, a growing financial place in the West African sub-region. Its role in the financing of mining projects remains limited.

On the other hand, international securities markets based in Europe, Asia and North America play a major role in unblocking and facilitating the consequent investments required in the financing of exploration, development and mining activities in Côte d’Ivoire.

In Côte d’Ivoire, the issuance of securities over mining tenements and related assets is permitted and included in the Mining Code.

Article 31 of the Mining Code, for instance, clearly indicates that an operating permit is indivisible, however, mortgages can be taken on the aforementioned permit. Evidence of the possibility for holders of mining rights is further evidenced by Articles 41 et seq. of the Mining Code wherein it is expressly provided that mining rights are assignable and transferable, subject to the prior approval of the Minister in charge of Mines.

Furthermore, the possibility to mortgage an operating permit is reiterated by Article 36 and 37 of Decree No 2014-397 of 25 June 2014, wherein the mortgage is authorised by an order of the Minister in charge of Mines and subject to a number of formalities and conditions as detailed in Article 37.

With the recent reforms of the WAEMU Mining Code, further obligations will be imposed on mining companies operating in Côte d’Ivoire, mainly in terms of transparency in the management of mining revenues and the fair redistribution of revenues in favour of local communities, but also in terms of governance and exchange rates as well as providing mechanisms to protect the environment through rehabilitation schemes.

On the local level, the mining sector’s place in the economy should grow, especially taking into consideration the major gold companies and the fact that the government intends to double the gold production in the country by 2025. The mining politics aim to improve mining governance, intensify mining production and diversify mining production.

However, as illegal gold panning is present in the sector, the Brigade de Répression des Infractions du Code Minier was established in 2018 to fine individuals responsible for illegal mining activities.

In closing, Côte d’Ivoire has committed, in the COP26, to reduce its greenhouse gas emissions by 30.41% by 2030.