The Guinean mining sector is based on a concentration of mineral resources recognised as one of the largest in the world, including bauxite, iron ore, gold and diamonds, as well as significant uranium, graphite, copper and petroleum deposits. The mining industry contributes between 12% and 15% of Guinea’s gross domestic product (GDP) through a range of operations.

The Republic of Guinea has significant mining potential, which is considered to be one of the levers of the national economy. As such, the mining sector has been placed at the centre of a vast and far-reaching reform process aimed at strengthening its impact on the national economy. To this end, since 2011, the government of the Republic of Guinea has undertaken a series of reforms in the mining sector to ensure that the country’s natural mining resources contribute sustainably and effectively to the country’s economic and social growth. Among the main reforms undertaken in this area is the reform of the legal, administrative and institutional framework.

As a former French colony, the Republic of Guinea’s legal system largely derives from civil law.

The following laws and regulations are the main sources of mining legislation in the Republic of Guinea:

• Law No L/2011/006/CNT, dated 9 September 2011, enacting the Mining Code of the Republic of Guinea (the “Mining Code”);
• Law L/2013/No 053/CNT, dated 8 April 2013, amending the Mining Code;
• Decree No D/2011/112/PRG/SGG, dated 11 April 2011, allocating and organising the Ministry of Mines and Geology;
• Decree No D/2012/041/PRG/SGG, dated 26 March 2012, on the creation, attribution and functioning of the National Mining Commission;
• Decree No D/2014/013/PRG/SGG on the application of the financial provisions of the Mining Code;
• Decree No D/2014/012/PRG/SGG on the management of mining permits and licences;
• Decree No D/2015/007/PRG/SGG, dated 14 January 2015, establishing a system for the accelerated processing and monitoring of integrated mining project files;
• Order No A/2016/5002/MMG/SGG, introducing a new cadastral procedure; and
• Joint Order No A/2018/5212/MEF/MMG/MB/MATD/SGG, dated 13 July 2018, implementing Article 165 of the Mining Code.

In the Republic of Guinea, mineral resources are the property of the state. Indeed, the Mining Code provides that mineral or fossil substances contained in the subsoil or existing on the surface are, within the territory of the Republic of Guinea, the property of the state and may not be subject to any form of private appropriation, except as provided otherwise in the Mining Code and in the Code on Private and State-Owned Land (Code Foncier et Domanial).

The Guinean state has the role of an owner-operator. In this regard, the state may engage in any mining activity on its own behalf, either directly or through a public limited company responsible for the management of a mining patrimony.

Since the enactment of the Mining Code, the grant of a mining exploitation title immediately gives the state an ownership interest, at no cost, of up to a maximum of 15% in the capital of the company holding the title.

While an exploration permit (permis de recherche) confers on its holder the exclusive right to prospect a type of mineral substance, an exploitation permit (permis d’exploitation) confers on its holder the exclusive right to explore, exploit and freely dispose the mineral substances for which it has been granted, within the limits of its perimeter and without limitation as to depth. This means that mineral rights typically derive from an exploitation permit that has been granted in accordance with the provisions of the Mining Code.

A mining concession can also be granted, conferring on its holder the exclusive right to carry out within its perimeter, and without any depth limitation, all mining operations on deposits (gisements) of the mineral substances for which the concession is granted. A mining concession is granted by way of decree to a Guinean company and to a holder of an exploration permit who has met its prescribed obligations under the Mining Code. The application for a mining concession must be made at least three months prior to the expiration of the validity period of the exploration permit under which the application is being made.

An exploration permit is granted by way of order of the Ministry of Mines and Geology, on the recommendation of the Mining Promotion and Development Centre and after receiving the approval of the Technical Committee of Titles.

As regards the exploitation permit, it is granted by way of decree issued during a Council of Ministers, on the recommendation of the Ministry of Mines and following approval by the National Mining Commission.

Mining concessions are granted by way of decree issued during a Council of Ministers, on the recommendation of the Ministry of Mines and following approval by the National Mining Commission.

With respect to exploration permits, an industrial exploration permit can only be granted for an initial period of three years, and a semi-industrial exploration permit can only be granted for an initial period of two years. The term of an industrial exploration permit may be renewed twice, for a maximum period of two years each time, while the term of a semi-industrial exploration permit may be renewed only once for a maximum period of one year. It is worth noting that an exploration permit confers on its holder a movable property right that is undivided, not assignable and may not be pledged or mortgaged.

As regards exploitation permits, an industrial exploitation permit is granted for a maximum period of 15 years, and a semi-industrial exploitation permit is granted for a maximum period of five years. The term of an industrial or semi-industrial exploitation permit is renewable several times, each time for a period lasting no more than five years. It is also worth noting that an exploitation permit creates a divisible and assignable movable right in favour of its holder. This right may be pledged in order to secure loans for operations.

In general, the granting of an industrial or semi-industrial exploitation permit will result in the cancellation of the exploration permit within the perimeter of the exploitation permit. However, exploration in relation to the mining operations may continue. Should a mineral substance other than the one for which the exploitation permit has been granted be discovered in the course of that exploration, the holder of the exploitation permit shall have a pre-emptive right in respect of the exploitation of such mineral substance. This right must be exercised within a maximum period of 18 months from the date of notification of the discovery to the state.

Mining concessions are granted for a maximum period of 25 years and may be renewed once or several times, each time for a maximum period of ten years. It is worth noting that a concession is a divisible property right that can be assigned and mortgaged to secure loans for operations.

Law No L/2019/0034/AN, enacting the Environmental Code as well as its implementing regulations, constitutes the legal framework governing the environment in the Republic of Guinea. The Guinean Environmental Code aims to establish the fundamental principles for promoting sustainable development, managing and protecting the environment and natural capital against all forms of degradation.

The Mining Code provides that any mining activity undertaken must comply with the legislation governing environmental protection. In particular, any application for an authorisation or a mining exploitation title must include an environmental and social impact study, in accordance with the Environmental Code and its implementing regulations. Requirements in this regard are modulated according to the scope of the work planned, ranging from a simple environmental impact notice for an exploration permit to a detailed environmental and social impact study for an exploitation permit or a mining concession.

The detailed environmental and social impact study must include the following elements:

• a description of the project (in this case, a mining project);
• an analysis of the initial state of the site and its environment;
• an assessment of the foreseeable consequences of implementing the mining project on the site, including for the natural and human environment;
• a statement and description of the measures planned to avoid, reduce if possible or compensate for the harmful consequences of the mining project on the environment, including the residual impacts;
• a presentation of possible alternative solutions; and
• an estimation of the corresponding costs.

The preparation of an environmental impact notice for an exploration permit is also subject to the requirements set out in the foregoing.

The environmental impact notice or the detailed environmental and social impact study is carried out at the national level, albeit in accordance with internationally accepted standards. Non-compliance with the environmental requirements set out in the Mining Code and the Environmental Code may lead the environmental authorities to impose administrative and/or criminal sanctions.

Under the Environmental Code, an environmentally protected area is a clearly defined geographical area that is recognised, dedicated and managed by any effective means, legal or otherwise, to ensure the long-term conservation of nature and ecosystem services as well as the associated cultural values.

The Mining Code also contains provisions relating to (i) closed zones and (ii) protected or prohibited zones.

For reasons of public order, the President of the Republic may classify certain zones as closed zones for a limited period and suspend the granting of an exploration permit, exploitation permit or mining concession for some or all mining substances. As regards protected and prohibited zones, it is provided that perimeters of any size may be established within which the exploration and exploitation of mining substances are subject to certain conditions or simply prohibited. Such restrictions may be implemented anywhere it is deemed necessary for the public interest and, in particular, for the purposes of protecting buildings and agglomerations, cultural or burial sites, waterholes, coastal areas, communication channels, works of art and works of public utility, without the holder having any claim whatsoever for compensation in this regard.

Under the Mining Code, any holder of a mining exploitation permit must enter into a local development agreement (LDA) with the local community residing on or in the immediate vicinity of the mining title. The purpose of the LDA is to:

• create the conditions for efficient and transparent management of the local development contribution, which is paid by the holder of the mining exploitation permit; and
• strengthen the capacity of the local community to plan and implement the community development programme.

Any opening or closure of exploration and/or exploitation of mines or quarries is subject to a prior declaration to the National Mining Authority. This declaration must be made at least one month before opening – and three months before closure of – the works. Any significant change in the method of operation, scope of the work or the work programme is also subject to a prior declaration at least one month in advance.

The holder of a mining exploitation title is also required to make all necessary efforts to proceed with the closure of its operations in a gradual and orderly manner, in order to prepare the local community for the cessation of its activities. The holder will notify the relevant administrations at least 12 months before the planned closure date and will prepare, six months before the closure date, a plan for the closure of its mining operations in collaboration with the territorial administration and the local community.

There are no protected communities, such as indigenous and traditional peoples, in the Republic of Guinea.

It is mandatory for a holder of mining exploitation title to enter into an LDA with the local community in the Republic of Guinea.

There are no specific ESG guidelines or regulations in place in the Republic of Guinea.

Illegal mining is an issue in the Republic of Guinea, especially when it comes to classic artisanal mining operations for gold extraction. The Mining Code provides that classic artisanal mining exploitations must be carried out using manual and traditional methods and processes. There are, however, those who practice mechanised artisanal mining exploitation, which is not in compliance with the provisions of the Mining Code. Encouraging this illegal form of gold extraction enriches individuals and lobbies to the detriment of the state. This practice also reduces the number of applications for semi-industrial mining permits, depriving the state of significant tax revenue and job creation opportunities.

Illegal mining is severely punished under the Mining Code. Anyone involved in illegal mining may be punished by imprisonment of two months to three years and/or the payment of fine of up to GNF15,000,000 (approximately USD1,742).

Some mining companies in the Republic of Guinea are committed to respecting local communities and ensuring a positive legacy for future generations. To achieve this objective, they are committed to:

• complying with all laws, regulations and permits;
• assessing the risks and potential impact of their activities on local communities, and defining the objectives and standards that form part of their management practices;
• respecting the dignity, culture, well-being and human rights of their employees, communities and others affected by their activities;
• pursuing dialogue with local communities to ensure good relations that benefit all parties involved;
• working with the local community and other stakeholders to achieve tangible improvements in the standard of living of the local community by supporting the education of children in local schools, promoting procurement from local suppliers and promoting economic alternatives that enable the development of the local economy; and
• improving the health and well-being of local people through education and health programmes aimed at reducing the impact of preventable diseases.

Despite the foregoing initiatives, however, conflicts between mining companies and local communities remain a major problem is some regions. In the Republic of Guinea, industrial exploitation often leads to open conflicts, negative effects (real or perceived) and frustrations within the population, which represent latent conflicts between mining companies and local communities. Cyanide pollution of watercourses, which are used to wash gold in industrial mining, is one concrete example that leads to conflict between communities and mining companies. This conflict has been mentioned several times by the local and prefectural authorities as one of the major conflicts affecting the locality of Lero and Siguirini in the Republic of Guinea.

Despite the implementation of a National Climate Change Strategy (NCCS) in the Republic of Guinea, it must be said that it takes time for initiatives to deal with climate change to have a significant impact on the mining industry.

There is not currently any climate legislation related to mining in the Republic of Guinea. Moreover, the authors are not aware of any potential climate change legislation that is being discussed in the country.

The National Sustainable Development Strategy of the Republic of Guinea includes a commitment to reform the governance of the mining sector of the country. The governance of mining resources will be oriented more towards the interests of local communities, minimising the environmental impact of mining and improving transparency and accountability in order to contribute to real, sustainable and equitable economic growth. To achieve these objectives, the following initiatives have been contemplated:

• better integration of the mining sector with the other sectors necessary for sustainable development;
• promoting local processing of raw materials;
• improving the effectiveness of assessments of environmental impact on the environment;
• developing mechanisms to compensate for biodiversity losses; and
• ensuring strict compliance with environmental conformity and local content.

The authors are not aware of any government or legislative initiatives related to the increasing demand for energy-transition minerals in the Republic of Guinea.

On the one hand, holders of exploration permits are entitled, throughout the period of exploration, to exemption from:

• value added tax (VAT) on imports of equipment, materials, machines and consumables before the beginning of the exploration phase;
• the annual minimum tax;
• the business licence fee;
• contributions to professional training;
• the single tax land; and
• the apprenticeship tax.

To benefit from the foregoing exemptions, a mining list must be filed before the start of the exploration phase, in accordance with the provisions of the Mining Code. The duration of these exemptions is limited to the duration of the exploration phase, and all other provisions of the General Tax Code in the Republic of Guinea apply with full effect. It also worth noting that holders of an exploration permit are subject to the statutory reporting obligations set out in the General Tax Code.

On the other hand, holders of a mining exploitation title who enter into the exploitation phase are eligible – for three years from the date of first commercial production – to exemption from:

• the annual minimum tax; and
• the single land tax.

During the exploitation phase, the holders of an exploitation permit are subject to all taxes other than those for which they benefit from the exemptions provided for in the foregoing, including but not limited to:

• VAT, excluding on the import of some equipment provided in the mining list in accordance with the provisions of the Mining Code;
• the tax on industrial and commercial profits or corporate tax;
• the tax on income from securities;
• registration dues on deeds relating to company formation, increasing share capital through new capital contributions, capital contributions, the capitalisation of profits or reserves, or mergers;
• lump-sum salary payments;
• withholding on non-salary income;
• withholding on salaries;
• the single automobile tax, with the exception of industrial vehicles and equipment at the rate in effect;
• contributions to professional training or the apprenticeship tax, as the case may be;
• contributions to local development;
• fixed fees and annual royalties;
• surface royalties;
• tax on the extraction of mineral substances other than precious metals;
• tax on the industrial or semi-industrial production of precious metals;
• the export tax on mineral substances other than precious metals; and
• the export tax on precious stones and gemstones.

In addition, the holders of an exploitation title are subject to the payment of environmental taxes and royalties on classified establishments, in accordance with the Environmental Code and its implementing regulations.

It is worth noting that there is no specific distinction made between the taxation of national and foreign investors in the Republic of Guinea.

The stabilisation of the fiscal and customs regime is guaranteed to holders of mining exploitation titles who have signed a mining agreement. The maximum duration of the period of stabilisation is 15 years. This period of stabilisation runs from the date on which the mining exploitation title is granted. During this period, the rates of levies, duties and taxes will neither be increased nor reduced. Instead, these rates will remain as they were on the date the mining title was granted. Furthermore, no new tax or levy of any kind whatsoever is applicable to the holder of a mining title during this specific period.

Any transfer of an exploitation permit, mining concession or authorisation to exploit quarry substances is subject to capital gains tax, in accordance with the provisions of the General Tax Code of the Republic of Guinea. The calculation basis for this capital gain is the difference between the transfer price of the mining title or authorisation stipulated in the deed of transfer and the net book value of the mining title or authorisation.

Any transfer of shares or other ownership interest of a legal entity holding a mining title or authorisation is taxed in accordance with the capital gains regime in the Republic of Guinea. The basis of assessment for capital gains on the sale of a share or corporate interests is the difference between the sale price of the share and its net book value. It is worth noting that where the transferor is not established in Guinea, this capital gain is taxed at source in Guinea at the standard rate of corporate income tax under the General Tax Code. The tax is deducted at source by the legal entity holding the mining title or authorisation. This withholding tax is payable when the capital gain is realised. Failure to pay the withholding tax due will result in the withdrawal of the mining title or authorisation.

The main features of attracting investment for mining in the Republic of Guinea are as follows.

• The creation of the Centre de Promotion et de Développement Minier (CPDM), a one-stop shop offering comprehensive assistance to simplify the investment process. The CPDM facilitates investors’ access to essential information, encouraging responsible and sustainable investment. Under the supervision of Guinea’s Ministry of Mines and Geology, the CPDM assists investors in preparing permit applications and completing administrative formalities. The CPDM also facilitates the acquisition of mining titles and authorisations.
• The guarantee of systematic and transparent management of the mining sector, which will be advantageous for investors not to mention conferring sustainable economic and social benefits for the Guinean people.
• Large reserves of bauxite, iron ore, diamonds and gold.

There are no special rules on foreign investment approval in the Republic of Guinea. Moreover, there are no restrictions on foreign investment in the exploration and mining sectors of the country.

The Republic of Guinea is not part of any multilateral or bilateral treaties that favour and protect investments in exploration and mining.

However, the Republic of Guinea has ratified the Treaty of the Economic Community of West African States (ECOWAS). In its Article 31, it stipulates the need to harmonise and co-ordinate member states’ natural resource policies and programs. ECOWAS includes Directive C/DIR 3/05/09, dated 27 May 2009, on the harmonisation of guidelines and policies in the mining sector. This Directive aims to ensure that ECOWAS member states adopt compatible and coherent mining legislation and policies that facilitate the attraction of regional and national mining investments. It promotes transparent and responsible management of mining resources in member states and proposes standards for environmental protection, and it also requires the local population to share in the benefits of mining resources.

It is also worth noting that the Republic of Guinea is one of the countries that applies the Kimberley process and the Extractive Industries Transparency Initiative (EITI) standards.

The main sources of finance for exploration, development and mining in the Republic of Guinea for investors are loans, own funds and technical partnerships. As far as the state is concerned, the Mining Investment Fund finances mining research and training, as well as actions promoting the mining sector.

In the Republic of Guinea, domestic and international securities markets are still under process. The Republic of Guinea is currently working on a draft law on securities exchange. The aim of setting up a securities market in the Republic of Guinea is to diversify financial resources and ensure better management of funds. Briefly, domestic and international securities markets in the Republic of Guinea do not currently have an important role in the financing of exploration, development and mining.

The legal features relating to security over mining tenements and related assets in the context of exploration, development and mining finance in the Republic of Guinea are as follows:

• exploration permits cannot be pledged or mortgaged – nevertheless, the holder of an exploration permit can enter into a technical partnership enabling them to raise the necessary capital to finance the exploration activities required for the discovery of a deposit;
• exploitation permits may be pledged to secure loans intended for operating purposes;
• The mining concession is a divisible real estate right that may be amended and mortgaged to guarantee borrowings for operating purposes; and
• the various mining authorisations cannot be pledged or mortgaged.

The Organization for the Harmonization of Business Law in Africa (Organisation pour l’Harmonisation en Afrique du Droit des Affaires) (OHADA)) Uniform Act on Security (AUS) governs securities in the Republic of Guinea.

The Republic of Guinea is rich in mineral resources such as graphite, cobalt and lithium, all of which contribute to the country’s energy-transition minerals. However, the country has no specific plans for energy-transition minerals. The government’s priority projects relate to renewable energy – solar, wind and hydraulic power – to improve electricity services in the Republic of Guinea. The authors are not aware of any government initiatives or prospects regarding the mineral energy transition. As a result, no change in this area is expected in the next couple of years.

With regard to carbon net zero, the authors are not aware of any initiatives or prospects envisaged to achieve carbon net zero or carbon neutrality in the Republic of Guinea. However, the current law and the national strategy on climate change, imposed by the Ministry of the Environment, requires that the exploitation of Guinea’s mineral resources be climate-compatible and developed in an environmentally friendly manner, gradually combining the use of low-emission energy sources and technologies. The authors are not aware of any impending changes in legislation in the mining sector, including in respect of energy-transition minerals and carbon net zero.