GABON MINING REGULATION
The central African country of Gabon is situated on the Atlantic Ocean at the Equator, and is bordered by Cameroon, Republic of Congo and Equatorial Guinea. The country’s natural resources include petroleum, natural gas, diamond, niobium, manganese, uranium, gold, timber, iron ore and hydropower, and its main exports include crude oil, timber, manganese and uranium. The country’s relatively small population and its oil and mineral reserves have enabled Gabon to become one of Africa’s wealthier countries. However, the country faces fluctuating oil, manganese and timber export prices, and has faced poor fiscal management, though the government has recently made efforts to increase transparency and invest in human resources and infrastructure. The country’s GDP grew almost 6% per year from 2010-2014.
Gabon is a world leader in manganese production, and the high-grade manganese deposits at Moanda, near Franceville, are among the world’s richest. The national mining company, Société Equatoriale des Mines (SEM), is the national operator and conducts its activities in line with the national mining strategy. As a response to the slump in energy prices and Gabon’s over-dependence on the petroleum sector the Gabonese government has recently sought to diversify the country’s economy, with mining emerging as a key sector for targeted growth. As a part of this endeavor Gabon rewrote its mining code, which came into effect early in 2015.
PRINCIPAL LEGISLATION AND REGULATOR
The principal minerals legislation in Gabon is the Mining Code (Loi no. 017/2014 du 30 janvier 2015 portant réglemenation du secteur minier en République Gabonaise) which was promulgated in 2015 by Décret no. 0080/PR du 30 janvier 2015 portant promulgation de la loi no. 017/2014 du 30 janvier portant réglementaiton du secteur minier en République Gabonaise. Other relevant legislation includes the Forestry Code (Loi no. 016/2001 portant Code forestier); the Land Law (Loi no. 15/63 du 8 mai 1963 fixant le régime de la propriété foncière); the Sustainable Development Law (Loi no. 002/2014 portant orientation du developpement durable en République Gabonaise); and the law concerning expropriation for public utility (Loi no. 06/61 du 10 mai 1961, réglementant l’expropriation pour cause d’utilité publique et instituant des servitudes pour l’exécution des travaux publics).
The Mining Code outlines the following principles which form the basis of Gabon’s mining policy: systematic participation of the state in the capital of exploitation titleholders; industrial and social responsibility; health, safety & environment norms; human rights; promotion of local businesses and personnel; transparency and good governance; equality; the promotion and protection of mining investments; and the provision of mining incentives. The mining policy emphasizes sustainable mining, the training and hiring of Gabonese nationals, site rehabilitation, and environmental protection.
The mining industry is under the authority of the Ministry of Mines, Industry and Tourism. Other relevant ministries include the Ministry for Investment Promotion, Infrastructure, Habitat and Territory Development, and the Ministry of Forests, Environment and the Protection of Natural Resources.
Mining titleholders sign a Mining Convention, which defines the technical, legal, fiscal, customs and financial terms and conditions, the commitments of the parties, and the environmental protection requirements. This is negotiated under the authority of the Ministry of Mines and signed between the state and the mining titleholder. The Mining Convention cannot derogate from the provisions of the Mining Code, and any mining convention concluded in violation of the law is null and void.
GRANTS AND MINERAL TITLE
The new Mining Code states that all mineral substances within the soil, subsoil and territorial waters belong to the State, and provides for a 10% carried interest (free and non-contributory) in favor of the state, which can be waived for marginal projects or for other economic reasons, but cannot be diluted in the event of future capital increases. The government can negotiate for a further 25% interest (see Art. 6).
To be eligible for a mining title, companies must demonstrate their technical and financial capacity to carry out the relevant mining operations, and must establish a company under Gabonese law (Art 9). Only Gabonese nationals are eligible to conduct artisanal mining. In the event of concurrent applications for the same area, the Mining Code explicitly provides for “first come, first served” rule, subject to the satisfaction of the technical and financial capacity requirements, though derogation from this principle is possible (Art 10). Where known mineral deposits are not subject to mining rights, the property may be granted by public tender (Art 11 and 109).
The Mining Code provides for a variety of authorizations, including artisanal exploitation authorizations, temporary quarrying authorizations, and a Prospecting Authorization. Prospecting Authorizations are issued by the Ministry of Mines for a duration of one year, are non-renewable, cannot be transferred or leased, and are not mining titles.
The Mining Code provides for the following mining titles:
- Research Permit: This permit, issued by order of the Minister of Mines, is granted for a period of three years, renewable twice for three-year periods pursuant to conditions to be fixed by regulation. The permit may be extended where a titleholder has discovered an economically viable deposit, in order to allow for the completion of a technical and financial study. Each individual operator is limited to a maximum of three Research Permits (two for diamonds), and the surface area cannot exceed 1500km2 (5000km2 for diamonds).
This permit confers the exclusive right to conduct prospecting and research activities for the minerals for which it was granted, subject to artisanal mining activities (prior to applying for an Exploitation Permit). The issuance of a Research Permit is followed within three months by the signing of a Research Mining Convention outlining the financial, fiscal, customs, health and safety, and other terms and conditions, as well as the work plan, relations with third parties, reporting obligations, and the dispute resolution process. The following sanctions may apply in the event that the titleholder does not fulfill its work plan or financial commitments: reduction of the surface area by one-third, penalty of 10% of the non-realized investment, non-renewal, and revocation. In case of discovery of an economically viable deposit during the validity of the Research Permit, only the Research Permit holder can apply for an Exploitation Permit or Mining Concession. If the substances were not listed on the Research Permit, the titleholder must declare them to the Ministry without delay.
- Exploitation Permits and Mining Concessions: The Mining Code provides for Small Mine Exploitation Permits (which are exclusively reserved for SMEs or mining investments that are majority-owned by Gabonese nationals, are valid for five years, and are renewable), the Permanent Quarry Exploitation Permit, and the Exploitation Permit and Mining Concession.
The Exploitation Permit and the Mining Concession confer the exclusive right to conduct prospecting, research, and exploitation within the perimeter (which cannot exceed 1500km2), and the free disposal of the mineral substances for which they were granted. Connected or associated substances are subject to specific dispositions in the Mining Convention. If the titleholder does not express interest in connected substances, they are considered rejected. The Exploitation Permit is valid for ten (10) years and can be renewed for one or more five-year periods. The titleholder must began exploitation within five years, exploit the deposit according to industry best practices, and conform to relevant regulations, particularly as relates to periodic reporting. The Mining Concession is granted for a period of 25 years and can be renewed for one or more ten-year periods. These titles are real property rights that are distinct from ownership of the soil and sub-soil. The titles can be ceded, transferred or leased with the prior authorization from the Minister of Mines, after receiving the opinion of the mining administration regarding the legal, technical and financial capacity of the transferee or lessee. The titles can be mortgaged and are subject to property law. The issuance of an Exploitation Permit or Mining Concession commits the state to initiate an expropriation for public utility procedure for the relevant areas. A Mining Convention outlining the relevant terms and conditions, and the rights and obligations of the parties, is signed between the state and the titleholder within three months. A model Mining Convention will be provided in the mining regulations.
The Mining Code sets out the annual fees and the rates for permits, renewals, and assignments.
The Mining Code provides that all protocols, contracts and agreements by which the mining titleholder agrees to merge, transfer, lease, confer operational control or cede or transfer its rights and obligations in whole or in part, must have the prior approval of the competent authorities, which must be issued within sixty (60) days. The Ministry may refuse to issue a transfer for the following reasons: the transferee lacks sufficient technical and financial capacity; the substances involved are strategic; the transfer is incompatible with the state’s mining policy; and risk of monopoly. The Mining Code Article 276 sets the tax for transfers at 5% of the total transaction value. Except where the transfer or sale of a mining title is between affiliated companies, the state has a sixty (60) day right of preemption in respect of sales or transfers to third parties.
Mining titles and authorizations can be revoked for a variety of reasons, including the suspension of exploration for six (6) months, the suspension of mining for twelve (12) months, violations of the Mining Code and non-compliance with the obligations set forth in the Mining Convention. The Exploitation Permit or Mining Concession may be suspended or revoked for failure to begin work within five (5) years, absent force majeure or other major impediment, or for any serious failure to uphold the relevant obligations. The Mining Code requires that Research Permit holders receive one month’s notice (two months for the Exploitation Permit or Mining Concession holder) to prove that it has respected its obligations. The titleholder has sixty (60) days following the notification of the decision to contest the revocation of its permit, which suspends execution of the decision (this may require the payment of a caution/guarantee).
The Code outlines the relations between mining titleholders and between mining titleholders and third parties. Within the perimeter, subject to applicable rights, the mining titleholder can occupy land, construct necessary infrastructure, extract construction material, and cut necessary wood and make use of unexploited water sources. Mining titleholders who want to use agriculture, forestry or oil routes must negotiate this use with the relevant titleholders, and may refer any disputes to arbitration by the competent administrations, which have 30 days to issue a decision. Surface rights authorizations are issued by joint order of the Minister of Mines and the Minister responsible for the relevant domain.
Disputes between mining titleholders and land titleholders are submitted to an out of court settlement procedure under the governance of a commission comprised of members from the mining and land administrations. If the parties fail to reach an agreement, the dispute may be brought before the competent courts.
Mining titleholders whose activities cause prejudice to land, forest or other permit holders must provide compensation according to applicable law. Mining titleholders are also responsible for providing compensation in the event that the government expropriates land for public utility purposes for the benefit of the mining titleholder. The mining titleholder is likewise responsible for compensating displaced local populations.
Applications for an Exploitation Permit or Mining Concession must be accompanied by a feasibility study and an environmental impact assessment, which is validated by the technical services of the competent authorities. The competent services from the Mining and Environment administrations evaluate the nature and impact of the activities and jointly determine whether the environmental impact evaluation takes the form of an environmental impact notice or an environmental impact study (EIS). Mining titleholders must also establish and regularly update the Environmental and Social Management Plan, and must submit plans for mine closure and site rehabilitation, as well as a monitoring plan, at the conclusion of operations. The Minister of Mines delivers a quitus after the site rehabilitation, upon the technical advice of the Mines and Environment administrations.
Mining titleholders are required to contribute to several national development initiatives, and are obligated to prioritize the hiring of Gabonese nationals with equivalent experience and establish an annual training program, in addition to prioritizing the hiring of local SMEs. The Mining Code also requires titleholders to establish a provision for diversified investments (PID) and a provision for Mining Investments (PIM). In addition to subscribing to insurance, mining titleholders can contribute to mine maintenance funds, training funds, and provisions related to corporate social responsibility, including socio-economic and industrial development of the state, socio-economic development of local communities, job creation and promotion of Gabonese SMEs, and environmental protection projects. Article 234 requires that mining titleholders make annual contributions to the industrial liability fund during the exploitation phase, at a rate of between 1-1.5% of all development costs and between 0.75 -1% of all turnover. The precise figure is fixed in the Mining Convention.
The Mining Code also includes extensive tax provisions, including a five-year corporate tax holiday for Exploitation permit holders.
See Gabon Environmental Regulation.