BENIN MINING REGULATION
The mineral industry of Benin does not play a significant role in the country’s economy and at present is limited to the production of cement, clay, gold, limestone, marble, iron ore, sand and gravel. Gold was typically produced by artisanal miners from gold veins in the Atakora Mountains in north-western Benin and from alluvial sediments along the Perma River and its tributaries.
PRINCIPAL LEGISLATION AND REGULATOR
The primary minerals legislation in Benin is the Mining Code 2006 (Loi no. 2006-17 portant code minier et fiscalités minières en République du Bénin), which replaced the earlier 1983 Mining Code. Under Article 12 of the Mining Code, surface ownership rights are separate from mining and quarrying rights, with mines and quarries belonging to the State. The industry is further regulated by various ordinances and decrees, including Décret no. 2008-804 (31 décembre 2008) portant règlement d’application du code minier et fiscalités minières en République du Bénin (Decree 804). Physical persons, who are not Beninese nationals, must be domiciled in Benin in order to acquire mining rights; companies must be registered on the commercial register and constituted in accordance with Benin’s laws governing business associations, in order to acquire mining rights.
Mining rights are contingent on receipt of an environmental compliance certificate, which is acquired through submission of an environmental impact assessment (EIA), in conformity with the relevant environmental protection regulations. The Mining Code also provides extensive tax and customs information. A Mining Agreement (Convention minière) is valid for the duration of the validity of the research (or exploration) permit, including renewals, and the duration of an exploitation permit, including renewals. The Convention Minière specifies the rights and obligations of the parties regarding legal, financial, tax, and social conditions, including management of funds for site restoration, and the document cannot be altered except by mutual agreement. The tax and customs exemptions provided in the Mining Code can only be accorded through a Mining Agreement between the State and the beneficiary. The government has a right to 10% of the shares of a mining company for the duration of the mine.
GRANT AND FORMS OF MINERAL TITLE
Several types of permits may be granted under the Mining Code, namely:
- Prospecting authorization: Allows for non-exclusive prospecting on all territory in Benin that is not already subject to a research or exploitation permit. This authorization is personal, and cannot be transferred or divided. This authorization is granted for a period of three years and can be renewed three times, for a period of two years each. Holders of a prospecting authorization are required to submit annual reports to the Mining Administration regarding the results of their research and studies.
- Research (or Exploration) permit: This permit, issued by the Minister responsible for mines, on recommendation of the Director of Mines, confers exclusive prospecting and exploration rights for the specified mineral substances. The permit is valid for three years and renewable twice for additional three-year periods. During its validity, only the permit holder may apply for an exploitation permit for areas within the relevant perimeter (after creating an exploitation company). The research permit holder must commence work within six months and submit annual reports regarding the results obtained and money invested. If the permit holder fails to invest for a full year it must pay an indemnity, equal to the deficiency, in order to maintain the validity of the permit. A research permit does not exclude the issuance of a research permit for liquid or gas hydrocarbons in the same perimeter, provided these activities do not impede the mining activities. The research permit is accompanied by a Mining Agreement, signed by the Minister responsible for mines and the mining rights holder.
- Exploitation permit: Confers the exclusive right to conduct prospecting, exploration and exploitation within the perimeter. The permit is issued by the Conseil des Ministres at the recommendation of the Minister responsible for mines, is valid for 20 years and can be renewed twice for additional ten-year periods. The perimeter is defined depending on the size of the deposit and a feasibility study in support of the application, and the permit confers the same rights and obligations for all mineral substances found by the permit holder. To apply, a research permit holder must provide a feasibility study, a plan for development and exploitation of the deposit, an environmental protection plan, and a scheme for site rehabilitation based on an environmental impact study. If the exploitation is expected to have particularly grave consequences for the environment or local populations it will only be granted after a public hearing, to evaluate and determine the measures needed to eliminate or minimize these effects, has been held. These recommendations must be taken into account in the development and exploitation plan, the environmental protection plan and the site rehabilitation plan. The permit holder must begin work within 18 months and any major deviations from the plans require advance justification, submitted to the Direction chargé des Mines at least one month prior. Further, the permit holder must provide tri-annual (or at the request of the Director of Mines) statements, accompanied with supporting documents, indicating the number of buyers, the volume, the terms and conditions of sales, the production, and any other relevant information. Any transactions, transfers or unusual arrangements with an affiliated or non-affiliated enterprise must be specifically reported, and all elements, including contracts, commissions and conditions must be revealed.
- Artisanal or semi-industrial mining authorization: Grants the right to exploit the substances for which the authorization is issued, within a specified perimeter. This right is indivisible, non-pledgeable, non-transferable, and inalienable, and can only be granted where it is proven that industrial mining is not economically viable.
Mining permits can be revoked by the authorizing body for the following: delay of activities; suspension of exploitation for more than one year (research permit) or more than 18 months (exploitation permit) without a legitimate reason; serious restriction of exploration or exploitation activities, without a legitimate motive, that is prejudicial to national interests; violations of certain articles (4, 5, 22, 102) of the Mining Code; non-payment of taxes; causes listed in the Mining Agreement; illicit exploitation; and any other activity prejudicial to national interests. The permit holder must be given 90 days written notice to remedy the situation prior to proceeding with permit revocation. The decision is subject to review by an administrative tribunal or arbitration tribunal if the Mining Agreement so authorizes. An appeal against the decision to withdraw the permit, prior to the expiration of 60 days after its notification, suspends execution.
Article 98 of the Mining Code requires that mining activities be conducted in a manner that assures the rational exploitation of mineral resources and minimizes any negative impact on the environment, and on local populations and their usage and customs. Mining activities must be conducted using techniques to prevent pollution and to ensure the preservation of biodiversity, and mining rights are contingent on an EIA conforming to the relevant environmental protection regulations (Decree 2001-235 on the EIA), as required by Articles 88-89 of the Environment Law, 1999. Chapter 10 of the Mining Regulations (Decree 2008-804) sets requirements for health and safety.
Under Articles 102-103 of the Mining Code, employment of qualified Beninese nationals for operations in Benin is prioritized and companies should accord preference to Beninese enterprises for construction, supply or services contracts. Companies are required to establish training and promotion programs for Beninese nationals, and to conduct their activities in a way that promotes the transfer of technology for the benefit of Beninese personnel and corporations. The Mining Code also promotes health and safety and mining rights holders must provide a health and safety plan, for the approval of the Director of Mines, within three months, or the Direction chargé des mines can prescribe measures necessary to assure the hygiene and security of employees and third parties, and in doing so, must consult with the collective community or public institution for communal land. If no accord is reached within three months, the issue passes to the Minister responsible for mines so as provisions related to expropriation of customary land rights or expropriation for public utility or temporary occupation can be applied. In the event that no accord is reached, authorization to occupy is only accorded by paying an indemnity.
Mining installations and the extracted minerals cannot be requisitioned or expropriated by the State, except in the public interest, and fair and prior compensation must be paid. Mining rights holders must indemnify the State, and any other person duly recognized by the Department of Mines or other competent service, for any damage or prejudice, and a research or exploitation licence cannot impede the execution of public utility works within the perimeter; however, titleholders are entitled to compensation in the event that the title is rendered useless. Mining titleholders can occupy the surface terrain necessary to conduct their activities with the permission of the Minister responsible for mines, which will be granted after the surface rights holders receive compensation or, if no agreement can be reached, the titleholder deposits funds in a public account to cover compensation. Civil courts have jurisdiction over disputes regarding compensation.
See Benin Environmental Regulation.