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MINING IN AFRICA- LEGAL RESTRICTIONS

MINING IN AFRICA- LEGAL RESTRICTIONS

Mining in Africa – An African continent is a place of residence for many of the major minerals and metals such as gold, iron ore, petroleum, diamond, coltan, and Africa’s resources have contributed to over 20% of the world’s energy use and reserve for over 2 centuries.

Most of these resources are only found far down the earth. The process of digging deep to extract these resources is known as Mining.

Although mining is very well practiced in many African countries, these countries have laws that govern the mining of their resources which regulates and guides the system.

More than one-third of the world’s mineral reserves are found in Africa. Although only a little is used for the development of the continent this is because. The potential for expanding the mining industry in the continent is huge.

Mining in Africa – Industries

All African countries are blessed with Rich and bountiful natural minerals that are mined for the economic benefits of the country and the world at large. Each of these countries has also found a way to regulate and legislate their mining Industries to encourage growth in an orderly and lawful fashion.

Below are some African countries with their majorly mined resources and mining laws.

1. ALGERIA

Algeria in terms of landmass is the 11th largest country in the world. Her mining industry is highly prospective for iron, gold, and base metals.

The Algerian government introduced a new mining law in 2001. This new regulatory framework was designed to influence greater foreign investment in the mining sector, including privatization of some existing mining areas.

The Mining Law No. 01-10 of 2001 includes three licenses, which are:

1. Reconnaissance License: This license allows exclusive examination of the licensed area. It is issued for one year and may be renewed or extended twice, only for six months.

2. Exploration License: The exploration license gives miners exclusive rights to explore and source for minerals but only within the licensed area. The license is only valid for three years and may be renewed or extended twice, only for a two-years each time. 

3. Concession License: The concession license gives exclusive rights to produce and exploit specific minerals in the licensed area. It has an initial expiration of 30 years and the renewal is dependent on the deposit reserves.

2. BOTSWANA

The mining industry in Botswana is a thriving sector of the economy and contributes as much as one-third of the country’s GDP. The growth and increase in the industry are largely due to the country being one of the largest producers of high-grade diamonds that are well sought out across the world.

The Mines and Minerals Act and the Mines, Quarries, Works and Machinery Act are the laws governing the mining industry within the country, and these laws have under them several types of licenses in operation.

The different licenses under the Botswana mining law are:

  1. Retention Licence: The retention licence gives land tenure rights to the miner and can only be renewed once, each time not exceeding three years, and gives the license holder limited rights to assess the prospect. 

2. Mining Licence: This license is valid for up to 25 years, and may be renewed by the holder for another period of 25 years. Additionally, mineral rights holders may be required to permit the government to hold up to a 15% minority interest in undertakings.

3. Minerals Permits: Mineral permits are issued only to miners and companies with small-scale mining operations. Interested parties that apply for Mineral permits are only allowed to mine other minerals apart from diamond and must limit their operations to a 500m² land radius. This license is valid for five years and can be renewed unlimitedly up to another five years.

3.           NIGERIA 

There are about 34 different categories of minerals in Nigeria including large deposits of gold, lead, iron, tantalite, tin, and zinc

The Mining industry is controlled majorly by the Minerals and Mining Act 2007 and the Minerals and Mining Regulations 2010 National Environmental Standards and Regulations Agency. Other laws include:

  • Minerals and Mining Regulations 2011
  • Nigerian Extractive Industries Transparency Initiatives Act 2007
  • Companies And Allied Matters Act 1999

Licenses under the Nigerian mining law include: 

1. Reconnaissance License: This license is required for carrying out non-exclusive reconnaissance activities in any part of Nigeria in a way that is socially acceptable to pay for any environmental damage caused by the activity. 

2. Exploration License: this license gives the holder the permission to explore the permitted. 

3. Mining License: This license gives the holder the exclusive right to carry out mining activities within a designated area.

4. Quarry License: A quarry license gives its holder the right to carry out quarrying operations on the land within the area of the lease and to remove and dispose of any quarriable mineral specified in the lease. A quarry license is granted for 5 years which can be renewed with an area of the land area not exceeding 5square kilometers. 

5. Water-use Licence: A water-use license gives the holder the right to use water for mining operations. The use of water is however restricted to the area of land that is specially stipulated for use by the permit.

4. SOUTH AFRICA

South Africa, as the world’s largest producer and exporter of platinum, also produces significant amounts of other minerals such as gold, coal, chrome, manganese, titanium, and vanadium. A major industry also is the value-adding industry that involves the processing of these minerals to produce ferroalloys, stainless steels, and other similar products. 

The relevant mining laws that govern the mining industry in South Africa include the Mineral and Petroleum Resources Development Act of 2002 (MPRDA), Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the Charter), and the Codes of Good Practice for the Minerals Industry (Mining Code).

Prospecting rights and mining rights are the most important and applied for licenses in the South African mining industry. The license applications are to be made to the Minister of Mineral Resources and if granted, they’re registered with the Mineral and Petroleum Titles Registration Office.

5. ZIMBABWE

Zimbabwe is one of the African countries rich with a variety of mineral resources and the most mined resources are gold, diamond, platinum group metals, iron, nickel, chrome, and coal. Other mined minerals are- asbestos, cobalt, graphite, lithium, and palladium.

The main law that regulates mining in Zimbabwe is the Mines and Minerals Act 1961, which consolidates other laws that relate to mining. There are also secondary statutes that regulate the dealing and exportation of minerals.

There are two types of exploration licenses issued to miners provided for by the Mines and Minerals Act, which are:

1. Prospector’s Licence: The Prospector’s Licence is provided for small-scale mining companies and it is only valid for two years. It gives no exclusive right to the holder and can only be given to residents of Zimbabwean or agents appointed by them.

2. Exclusive Prospecting Licence: This license gives the holder exclusive access to selected minerals in any defined area in Zimbabwe. It has an initial expiration of three years and may be extended once for another period of three years.


5. TANZANIA

Tanzania is a habitat to several known mineral resources such as gold, coal, diamonds, iron ore, limestone, graphite, phosphate, tanzanite, platinum group metals (PGMs), rubies, and uranium.

The mining laws that regulate the Tanzanian mining industry are: 

  • Mining Act 2010
  • Tanzania Investment Act 1997
  • Land Act (1999 and 2002)
  • Environment Management Act No.20 of 2004

Licenses granted under the mining law include:

1. Prospecting License: The prospecting license can be applied for by any company or individual. 

2. Mining License: The right to mine can be obtained by any company or individual if approved. Although, foreigners are limited in the mining of gemstones. 

3. Primary Mining: The primary mining license is only granted to citizens of Tanzania as per section 8(2) of the Mining Act.

Because of the booming and thriving market, the African mining industry is proving itself to be, several foreign and local investors have begun to show interest and to familiarise themselves with the mining systems of the continent. However, no matter how familiar investors might seem to be with the mining system of the African continent, is quite impossible for them to grasp a full understanding of the system in its entirety and this is where Shikana Law Group comes in.

Shikana Group is an investment and law firm located in Dar es Salaam, Tanzania, and is very familiar with the African mining system. The firm boasts of young and experienced staff whose ultimate goal is to guarantee client satisfaction by mediating deals to the client’s advantage. Shikana Group also offers a versatile range of services beyond the mining industry to include real estate, oil and gas, and much more. Because of their strategic position in Africa, they are in the best position to advise, guide, and provide smooth transitioning into the African investment world for potential foreign or local investors.

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