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Natural Resources Code and Mining Regulation 1997

Legal Risk Rating
Score: 45
Substantial Risk
In recent years the Cuban government has sought to revive and strengthen its mining industry - making a push for foreign investment. In order to truly realise this goal the government ought to make amendments to the existing legal framework which currently allows for discretionary decision making on the part of government to pose a substantial risk to the foreign operator. A handful of amendments, largely focused around the right to mine and security of tenure, would significantly improve Cuba's current regulatory risk and would set the country on the right course for the revitalisation of this key economic sector.

Regulatory Corruption Risk

Very High Corruption Potential

Corruption Exposure Risk

Very High Corruption Risk

Legal Risk Rating

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Mining Overview Commentary plus sign



Cuba, officially the Republic of Cuba, is one of the largest islands in the Caribbean and the closest country to the United States, being just 90 miles away. It consists of the main island, the Island of Juventud and several archipelagos. Cuba has over 11 million inhabitants and an economy roughly equal to that of Nevada’s. Cuba's natural resources include sugar, tobacco (its cigars are known as the best in the world), fish, citrus fruits and coffee. The most important mineral resource is nickel. Sherritt International of Canada operates a large nickel mining facility in Moa. Cuba is also a major producer of refined cobalt.

Due to its proximity to the United States, Cuba has attracted a disproportionate amount of political interest from America, including an attempted invasion in 1961 (the so-called Bay of Pigs operation), the Cuban Missile Crisis of 1962 (in response) and the passage of several laws aimed at blocking commercial trade with the country. These statutes have precluded American companies from investing in Cuba’s mining sector and rendered Canadian companies fearful of doing the same (the prominent exception being Sherritt International). Whilst President Obama announced an intention to restore relations with Cuba in late 2014, several legal obstacles exist to the implementation of this policy and it may take many years before American companies can freely invest in the Cuban resource sector.


Mining is regulated in Cuba by virtue of its Constitution, The Natural Resources Code (NRC) (Law no. 77) and a Mining Regulation (Decree 222/1997) (Reg.), as well as the Foreigner Investment Law (no. 77/1995). Pursuant to its Constitution, all minerals belong to the state, and are divided into five categories: (i) metallic minerals; (ii) non-metallic minerals; (iii) energy-bearing minerals; (iv) water; and (v) others. The Energy and Mining Ministry was created in February 2012, replacing the last Basic Industry Ministry; its main responsibilities are managing and monitoring the mining, energy and petroleum industries. The Council of Ministers is responsible for the granting or refusal of mining concessions.


All individuals and entities, national or foreign, are entitled to explore, develop, mine and process minerals in Cuba. According to Article 22 of the NRC, concessions are granted to perform geological investigation (prospecting and exploration), mining and mineral processing. The phases of mineral development contemplated in the law include reconnaissance, prospecting and exploration, mining, processing and commercialisation. All activities are governed by the grant of a concession, except for reconnaissance work which is governed by the issuance of a permit, valid for one year and renewable for six months (Art. 26, Reg.). At its heart, Cuba’s regime is largely discretionary.

The characteristics of the concessions are as follows:

  • Exploration: These concessions are for three years, renewable for two years (Art. 23, NRC). An environmental licence must be requested as part of the request for the exploration concession (Art. 37, Reg.). The applicant’s financial and technical competence must be proven and the Ministry has the power to award or deny the concession.


  • Mining: A mining concession is to be granted for a maximum of 25 years (Art. 24, NRC). The tenure may be renewed, provided there exists additional reserves and the adequacy of mining techniques can be demonstrated (Art. 24, NRC). Whilst the initial grant is not certain, the ability to renew provided reserves exist merits an adequate rating. In order to secure a concession, the legislation requires evidence of technical and financial capacity, a work plan, a feasibility study, an exploration activities final report, details of the ore to be processed, and any plant to be established (Arts. 27(a) and (e), NRC; Arts. 39 and 75, Reg.). An environmental impact assessment is also mandatory (Art. 41, NRC). The discretion exists to deny the concession (Art. 19, Reg.).


Concessions for small-scale mining and processing are also available. Concessions (investigation, mining and processing) may be transferred upon request from the mining authority, who shall resolve in the term of 60 days.


Article 11 of the NRC states that mining operators may occupy private land via an easement, or by means of any other alternatives that do not result in the displacement or dispossession of third parties. Where other options are not workable, however, the Ministry may expropriate the land in return for compensation to the landowner. Exploration, mining and processing activities cannot be carried out without a prior environmental licence. In the case of mining and processing, an environmental impact study will be required. Article 34 of the EIA Process Regulation indicates that a licence may be rejected when it has "manifestly negative impacts".

The law requires preferential training of Cubans (Art 41, NRC), the relinquishment of areas not to be exploited, and a reclamation reserve from the grant of a mining concession of no less than five percent of the proposed investment (Art. 88, Reg.). Mining must commence within two years and one must obtain approval for the stoppage of mining (Art. 62, NRC; Art. 81, Reg.). As well, the miner must exploit reserves with a minimum of dilution and loss (Art. 43, NRC). Conditions may be imposed in the concession and failure to comply with any such condition can give rise to revocation.


See Cuba Environmental Regulation.

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Environmental Overview Commentary plus sign



Cuba is one of the largest islands in the Caribbean and the closest country to the United States, being just 90 miles away. It has a strong agricultural base, including production of sugar and coffee. Geographically, it is mostly flat to rolling plains, with mountains to the southeast where the highest point is Pico Turquino (at 2,005 meters). The island is home to countless birds, the Cuban crocodile, the very rare Cuban solenodon, the Indian mongoose, the Cuban iguana and many others. Approximately 80% of its animal life is endemic to Cuba (i.e. found only in Cuba). With respect to flora, Cuba hosts over 3,000 species of tropical fruits and flowers and many different types of trees, including over 30 types of palms. The population of Cuba is over 11 million making it the 2nd largest populated island in the Caribbean, which has aided in the deforestation of Cuba for agricultural production, firewood and building materials. The government has sponsored a program aimed at replacing forests, which had gradually decreased to a total of 17% of the land area by the mid-1990s. Another major environmental problem is pollution of Havana Bay and the endangerment of many plants and animals. Endangered species in Cuba include the Cuban solenodon, four species of hutia, two species of crocodile (American and Cuban), and the Cuban tree boa. According to Nations Encyclopedia, nine mammal species out of 31 were considered threatened, as well as 13 bird species, seven types of reptiles and 834 plant species.


According to Article 27 of the Constitution, it is the duty of citizens to contribute to the protection of the water, air, soil, flora, fauna and the biodiversity of Cuba. The main environmental legislation is the General Environmental Law (No.81) of 1997 (“Environmental Law”) and, in relation to environmental assessments, the EIA Process Regulation (Resolution No.132/2009) (“EIA Regulation”). According to Article 8 of the EIA Regulation, the Environmental, Science and Technology Ministry (“Ministry”) is in charge of the implementation of the EIA process. The Environmental Regulation and Nuclear Security Office (ERNSO) is responsible for granting, modifying and revoking environmental licences. In the case of small-scale mining the environmental authority is the Territorial Delegation of the Environmental, Science and Technology Ministry.


Exploration, mining and processing activities are subject to an environmental licence pursuant to Articles 28 and 120 of the Environmental Law. The titleholder must submit, prior to the commencement of the activity, a request for the licence. The Ministry is then required to decide, within 10 days, if it accepts or rejects the request to process the licence application (Art. 21, Reg.). In the case of acceptance, the titleholder may be obliged to submit an Environmental Impact Study (EIS) within one year depending upon the impact of the project, including risks to health, adverse effects on ecosystems, the requirement for community relocation or changes in life customs, the alteration of the landscape, the impact on tourism, the impact on sites with important cultural heritage and other factors. When the EIS is not needed, the environmental licence will be decided within 30 days. When the EIS is needed, the EIS will be subject to an environmental assessment within 60 days of its submission at which time the Ministry may:

● Approve the licence;

● Notify the applicant of errors or deficiencies in the application (and permit corrections or alterations to be made);

● Deny the licence based upon “manifest negative impacts or alternatives that exist to render the project more environmentally feasible than the project presented” (Art. 34, Reg.).

The environmental licence will expire if the development work has not commenced within one year of its grant (Art. 45, Reg.). Transfer of the licence requires authorisation of the Minister (Art. 49, Reg.). Separate processes are available for clearance of small-scale mining operations (Art. 53, Reg.)

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