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  • Mining Industry Value, US$bn: 160.8476827042745
Regulatory Risk Rating
42
0
100
Score: 42
Severe Risk
Algeria has clearly thought through the legal regime that it would like to operate within the country and has presented a well-written document that gives rise to few ambiguities. It has thought beyond the form of title documents and introduced new agencies to back-stop the growth of its mineral industry, such as the Agence du service geologique de l'Algerie, which is responsible for, among other things, the publication of geological maps to assist in encouraging the sector. The problem, however, is that Algeria has found safety and refuge in the old, dark corners of bureaucratic discretion preserving to itself the ultimate control over the miner's destiny.

Corruption Potential Index

Score: 20
Extremely High Corruption Potential

Corruption Risk Index

Score: 32
Very High Corruption Risk

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Mining Overview Commentary plus sign

ALGERIA - MINING REGULATION

GENERAL

Algeria, officially the People’s Republic of Algeria, is a country in North Africa with Tunisia, Morocco, Libya, Mauritania, Mali, Niger and the Mediterranean Sea bordering. Algeria is the largest country in Africa and according to the World Bank is considered to be an upper middle income country.

It has large reserves of hydrocarbons, which has led to a relatively stable economy, where hydrocarbons generate 30% of GDP and account for 95% of export revenues. Aside from hydrocarbons, the country’s main industries include mining, electrical, petrochemical and food processing. With the exception of the hydrocarbon industry, Algeria has struggled to develop its industries due to heavy regulation and its focus is on state-driven growth. The economy continues to be dominated by the state due to the country’s socialist development model which developed following independence from France in 1962.

The government has recently halted privatisation of state-owned industries and has imposed certain restrictions and conditions on foreign investment. Public finances were heavily depleted after offering over $23 billion in public grants and retroactive salary and benefit increases following the economic protests in early 2011. The country’s on-going economic challenges include diversification away from hydrocarbons, dealing with political and security risks, addressing youth unemployment and attracting foreign investment. Algeria’s natural resources include petroleum, natural gas, iron ore, phosphates, uranium, gold, lead and zinc.

PRINCIPAL LEGISLATION AND REGULATOR

The principal minerals legislation in Algeria is the Mining Law (Loi no. 14-05 du 24 Rabie Ethani 1435 correspondant au 24 février 2014 portant loi minière). According to Article 17 of the Constitution Algeria’s mineral wealth, including the wealth in its maritime territory, is the collective property of the Algerian people and this is further reiterated by the country’s Mining Law. The Mining Law provides that mining rights are distinct from surface rights and land ownership and cannot be mortgaged or leased. In order to obtain mining titles, applicants must demonstrate the necessary technical and financial capacity to conduct their research and exploitation works and meet their obligations under the Mining Law.

Other potentially relevant legislation includes the Law on Expropriation (Loi no. 91-11 du 27 avril 1991 complétée, fixant les règles relatives à l’expropriation pour cause d’utilité publique) and the Law on Investment Development (L’ordonnance no. 01-03 du Aouel Joumada Ethania 1422 correspondant au 20 août 2001, modifiée et complétée, relative au développement de l’investissement); the Environmental Protection Law (Loi no. 03-10 du 19 Joumada El Oula 1424 correspondant au 19 juillet 2003, modifiée, relative à la protection de l’environnement dans le cadre du développement durable) ; the Water Law (Loi no. 05-12 du 28 Joumada Ethania 1426 correspondant au 4 août 2005, modifiée et complétée, relative à l’eau) ; and the Sustainable Development Law (Loi no. 01-20 du 27 Ramadhan 1422 correspondant au 12 décembre 2001 relative à l’aménagement et au développement durable du territoire).

The Ministry of Industry and Mines (Ministère de l’Industrie et des Mines) is responsible for, amongst other things: the development and oversight of the national policy for mining exploration and exploitation and the mining sector as a whole; the rational exploitation of mineral resources for industrial development; and the initiation and oversight of national programs relating to geological infrastructure, mining studies and research and recovery of mineral reserves. In addition, the recent Mining Law created two new national Mining Agencies: Agence du service géologique de l’Algérie (ASGA) to manage geological information about the country and conduct monitoring of the resources and mine reserves accounting, and Agence National des activités minières (ANAM), which replaced the Agence National du Patrimoine Minier, and manages mining activities and the mining registry, issues mining titles, and oversees mining operations. The Mining Law also provides for a form of mining police or inspectorates.

GRANT AND FORMS OF MINERAL TITLE

Mining titles are granted by the ANAM with the involvement of the territorially competent Wali (Governor/Administrative Head of the relevant province). The Mining Law provides for the following mining titles:

 

  • Prospecting Permit: This permit grants the right to conduct prospecting within the perimeter. The permit can only be granted for areas not already covered by mining titles, unless it is granted for different minerals. The permit is valid for one year, and the titleholder can request two six-month extensions if the titleholder has respected its obligations during the preceding period of validity. Upon discovery of mineral deposits, the titleholder has priority in applying for an Exploration Permit, subject to approval by the ANAM of its work and financing plans.

 

  • Exploration Permit: The permit confers the right to conduct exploration work, including bulk samples, and is valid for three years. It may be renewed twice for two-year periods, provided the titleholder has upheld its obligations and proposes a work plan that the ANAM finds acceptable. The perimeter may be reduced with each renewal. Discovery of a commercially exploitable deposit creates the right to an Exploitation Permit subject to approval by the ANAM of the applicant’s feasibility study for the exploitation of the deposit. Titleholders may request a grace period of up to one year from the discovery of a commercially exploitable deposit to request an exploitation permit, but the grant is subject to the discretion of ANAM. Failure to submit an application for an exploitation permit after this grace period eliminates the titleholder’s claim to the area.

 

  • Exploitation Permit: The permit is issued for a period of 20 years, renewable for ten-year periods. The Exploration Permit holder has priority in applying for an Exploitation Permit. For deposits that are already evaluated for which no permit is attributed, the Exploitation Permit is issued by the competent administrative authority following an adjudication procedure fixed by regulations. The Exploitation Permit can be assigned or transferred in whole or in part, provided the contract or instrument receives the prior approval of the permit granting authority. The permit cannot be leased in whole or in part. If the permit holder’s activity is limited to one area of the perimeter and there are no plans to develop the rest of the perimeter, the competent authority can reduce the perimeter to the zones that are being managed and developed.

 

Mining titles concerning strategic minerals only can be conducted by a public economic enterprise whose capital is exclusively held directly or indirectly by the state or a public institution. The public economic enterprise or public institution can contract with any foreign or Algerian company. This contract must be submitted to the ANAM, which provides a recommendation addressed to the Minister of Industry and Mines for approval by arrêté.

Research and exploitation permits are granted by the AGAM upon receipt of the advice of the territorially competent Wali (Art. 63, Mining Law). Mining title applicants must have the necessary financial and technical capacity to conduct research and exploitation work and fulfil the obligations provided by the Mining Law and subsequent implementing legislation. The granting of any permit is subject to the applicant’s signature of the specifications (cahier des charges), which includes the terms and conditions, the obligations under the Mining Law, and commitments regarding works and financial investment. All environmental and feasibility studies for applications must be completed by consultants or geology and mining experts approved by the Minister of Industry and Mines.

Exploitation permits can be assigned or transferred in whole or in part, but they cannot be leased. The contract or instrument transferring the rights and obligations of the Exploitation Permit is subject to the prior approval of the ANAM. Exploration permits cannot be assigned or transferred. Any direct or indirect change of control in ownership of an interest in an Exploitation Permit is subject to the prior approval of the permit granting authority. Direct or indirect acquisition of 5% or more of the capital of a company holding an Exploitation Permit is subject to the prior approval of the permit granting authority. Approval is subject to the following criteria: the transferor has upheld its obligations under the Mining Law and its implementing texts and the transferee satisfies the mining title application criteria, particularly with regard to sufficient technical and financial capacity to conduct the mining works. Upon authorisation of the assignment or transfer, the titleholder must sign a new cahier des charges with a new work plan and financial and technical plan which the transferee commits to executing.

Mining titles are renewable provided the titleholder has executed its commitments and obtains approval of a new work and financing plan, and applies six months prior to the expiration of the mining title (three months for a prospecting permit). The mining perimeter may be subject to modification. Mining titles can be suspended or revoked for failure to uphold obligations under the Mining Law, particularly for failing to provide information to the appropriate authorities or failing to advance its activities in a regular manner. The Mining Law also provides for a finder’s fee for persons discovering commercially exploitable deposits. If the finder does not obtain the Exploitation Permit, the decision granting the Exploitation Permit fixes the indemnity owed by the beneficiary of the Exploitation Permit.

DEVELOPMENT CONSIDERATIONS

Mining titleholders are required to submit a feasibility study including a development plan, an exploitation plan, economic and financial analysis, a project timeline, a site restoration and rehabilitation plan, and measures related to the post-mining phase. The restoration and rehabilitation plan must be revised every five years. The Mining Law provides that mining titleholders are obligated to respect the technical and regulatory orders regarding environmental protection and protection of Algeria’s flora and fauna. The law also includes explicit provisions regarding minerals found in Algeria’s maritime territory, specifically with regard to marine mining activity, sanctions, and marine pollution.

Exploitation Permit applicants must submit an environmental impact study (EIS) accompanied with an environment management plan and a site restoration and rehabilitation plan. The EIS should include the following: the environmental justification for the choice of project implementation; the procedure for selecting the exploitation method; technical exploitation conditions that guarantee the stability and equilibrium of the environment; measures to gradually restore the site during and after exploitation activities, as well as for the prevention of risks to health and safety. The EIS must be completed by approved consultants or experts and is submitted to the Minister of Environment for approval. Mining activity is not allowed on sites protected by international conventions or national law.

Mining titleholders are entitled to occupy the surface land within the perimeter. In the event of an amicable agreement between the parties, the right to occupy the terrain is sanctioned by a contractual agreement. The mining titleholder is responsible for providing compensation for any prejudice caused by its activities. If the owner is deprived of the use of its land for more than three years, the landowner can require the mining titleholder to acquire the land at a price fixed on the basis of the value of the terrain at the time of occupation. If it is in the public interest, works and construction of facilities both inside and outside the perimeter may be declared a public utility according to the relevant rules regarding expropriation in the public interest. To ensure mining operations and the realisation of works necessary for the mining operations for which the public utility declaration was issued, the titleholder may make use of the land necessary for such works, installations and mining operations.

The mining titleholder also has a right to easements for access, crossings and water, which are necessary for the facilities or mining operations. In the absence of an amicable agreement with the relevant landowners, the permit holder may, by order of the territorially competent Wali, benefit from the use of land outside the perimeter, with easements for access, crossing or water which are necessary for its facilities or proper mining operations. The easements are authorised by arrêté of the competent Wali in conformity with existing law and regulations.

ENVIRONMENTAL REGULATIONS

See Algeria – Environmental Overview Commentary.

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Environmental Overview Commentary plus sign

ALGERIA - ENVIRONMENTAL REGULATION

GENERAL

 Algeria, officially the People's Republic of Algeria, is located in North Africa, with the Mediterranean Sea bordering to the north, Tunisia to the northeast, Libya to the east, Morocco to the west, Mauritania and Mali to the southwest and Niger to the southeast. At over 2,380,00 square kilometers Algeria is the largest country on the African continent and the tenth largest country in the world.

The south of the country is primarily occupied by the Sahara Desert, while the Atlas Mountain range spreads across the north of the country from Morocco through to Tunisia in two separate chains, the Tell Atlas and the Saharan Atlas. The narrow and hilly Mediterranean coastal plains, where the majority of the population lives, provide the most fertile land in the country; oaks, cedars, conifers and grape vines are amongst common flora.

Algeria’s climate ranges from arid to semiarid; the coastal region has mild, wet winters and hot dry summers, while the higher plateaus are drier, with cold winters and hot summers. Natural hazards include severe earthquakes in the mountainous regions, and mudslides and floods during the rainy season.

Current environmental issues include soil erosion from overgrazing and poor farming practices, desertification, raw sewage dumping, river and coastal water pollution from petroleum refining waste and industrial waste, and inadequate potable water.

PRINCIPAL LEGISLATION AND REGULATOR

The principal environmental legislation is the Environmental Protection Law (Loi no. 03-10 du 19 Joumada El Oula 1424 correspondant au 19 juillet 2003, modifiée, relative à la protection de l’environnement dans le cadre du développement durable), which provides for Algeria’s environmental and sustainable development principles. Other relevant environmental protection legislation includes the Water Law (Loi no. 05-12 du 28 Joumada Ethania 1426 correspondant au 4 août 2005, modifiée et complétée, relative à l’eau), the Forestry Law (Loi no. 84-12 du 23 juin 1984, modifiée et complétée, portant régime général des forêts), the Waste Control Law (Loi 01-19 du 27 Ramadhan 1422 correspondant au 12 décembre 2001 relative à la gestion, au contrôle et à l’élimination des déchets), the Sustainable Development Law (Loi no. 01-20 du 27 Ramadhan 1422 correspondant au 12 décembre 2001 relative à l’aménagement et au développement durable du territoire), and the Protection of Mountainous Zones Law (Loi no 04-03 du 5 Joumada El Oula 1425 correspondant au 23 juin 2004 relative à la protection des zones de montagnes dans le cadre du développement durable).

The Ministry in charge of environmental issues is the Ministry of Territory Management and Environment (Ministère de l’aménagement du territoire et de l’environnement) (Ministry). A portion of the environmental impact assessment (EIA) process is conducted at the provincial level through the Wali (governor/administrative head of the relevant province). Monitoring of projects subject to an environmental impact study (EIS) EIS is conducted at the provincial level.

EIA PROCESS AND OTHER PERMITS

Algeria’s Mining Law (Loi no. 14-05 du 24 Rabie Ethani 1435 correspondant au 24 février 2014 portant loi minière) reiterates Article 17 of the Constitution, which states that the country’s mineral wealth is a collective good belonging to the Algerian people. Mining titleholders are required to complete site restoration and rehabilitation efforts, take measures to eliminate, reduce or compensate for nuisance caused by the exploitation, and implement a risk prevention system. The Mining Law further provides that mining titleholders are obligated to respect the technical and regulatory orders regarding environmental protection, and includes specific provisions regarding mineral exploitation in Algeria’s maritime territory. Applicants for an exploitation permit must submit an EIS, which must be completed by approved consultants or experts. The EIS is submitted to the Minister in charge of environment. Research permits, artisanal exploitation permits and collection permits must submit an Environmental Impact Notice (EIN).

Article 15 of the Environmental Protection Law requires that development and construction projects likely to have direct or indirect environmental impacts must submit an EIS or an EIN as determined by regulations. Article 18 of the Environmental Protection Law confirms that these provisions apply to proposed mines. The EIS process is detailed in Executive Decree No. 07-144 (Décret exécutif no. 07-144 du 2 Joumada El Oula 1428 correspondant au 19 mai 2007 fixant la nomenclature des installations classées pour la protection de l’environnement) and by Executive Decree No. 07-145 (Décret exécutif no. 07-145 du 2 Joumada El Oula 1428 correspondant au 19 mai 2007 déterminant le champ d’application, le contenu et les modalités d’approbation des études et des notices d’impact sur l’environnement.).

EIS and EIN are produced at the expense of the project promoter by consultants approved by the Minister of Environment. Any modifications in facility dimensions, treatment or production capacity or the technical procedures require submission of a new EIS or EIN. The EIS or EIN must include: background on the project promoter and the consultant firm; analysis of project alternatives and an explanation of the specific economic, technological and environmental choices; definition of the study area; detailed description of the site and its environment; detailed description of the project phases (including exploitation and post-exploitation); estimation of the quantities of residues, emissions and nuisance generated by the different phases of the project; evaluation of the foreseeable long- and short-term impacts of the project; cumulative effects of the project; measures envisaged to eliminate, reduce or compensate for the damage; environmental management plan; and budget for environmental measures.

The project promoter must submit the EIS to the Wali, and the Wali refers the EIS to the environmental service, which examines the report and requests any necessary additional information or complementary studies. The promoter has one month to furnish the requested information. After this preliminary examination and acceptance of the EIS or EIN, the Wali issues an arrêté announcing the opening of the public inquiry, in an effort to promote public participation by inviting third parties to express their opinions on the project and its environmental impact. The inquiry cannot exceed one month, and the Wali designates a commissioner in charge of managing the inquiry and verifying the foreseeable environmental consequences of the project.

After the public inquiry, the Wali provides the opinions and the commissioner’s conclusions to the project promoter, who has a right to respond. The dossier, including the results of the public inquiry, is transmitted to the Ministry (for EISs) or to the provincial environment service (for EINs). Examination of the EIS or EIN cannot exceed four months from the end of the public inquiry. EISs are approved by the Minister in of Environment, while EINs are approved by the Wali. The decision on an EIS is transmitted to the Wali of the province, who notifies the project promoter. Any rejection must be supported by reasoning and, in the event of a rejection, the promoter may submit an administrative appeal to the Minister of Environment (without prejudice to other available legal options).

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