ALGERIA - MINING REGULATION
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.
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.
See Algeria – Environmental Overview Commentary.