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Mining Code 2019

 

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  • GDP, US$bn: 14.2
  • GDP per capita, US$: 7,180.9
  • Population, mn: 1.7
  • Inflation, CPI ave: 2.1
  • FX, LCY/US$: 592.9
  • Budget Balance, % of GDP: -6.5
  • Mining GVA, US$bn: 4.8
Regulatory Risk Rating
39
0
100
Score: 39
Severe Risk
Gabon’s mining code demonstrates a desire to open the country’s mining industry to foreign investment, which falls short of achieving its objective because it fails to balance the interests of state, citizen and investor. Investors will be left with much the same impression of the law promulgated in 2019 as they had of the law promulgated in 2015. If Gabon is to attract increased investment into its mining industry, it must do better in balancing these interests and accept that over control of the industry does not make for an attractive investment environment.

Corruption Potential Index

Score: 20
Extremely High Corruption Potential

Corruption Risk Index

Score: 33
Very High Corruption Risk

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Mining Overview Commentary plus sign

GABON MINING REGULATION

GENERAL

Gabon sits in Central Africa, bordering Cameroon, Republic of Congo and Equatorial Guinea, with a western border on the Gulf of Guinea. The country is rich in natural resources with reserves of petroleum, natural gas, diamond, niobium, manganese, uranium, gold and iron ore. Major exports include timber, manganese and uranium. To date the oil sector has dominated the Gabonese economy, contributing 40% of GDP and 60% of state budget revenues and accounting for 80% of exports between 2010 – 2016. However, the country’s over reliance on the oil industry has caused economic disruption in recent years, as oil prices have fluctuated, and production reduced. Outside of oil, Gabon is also a world leader in manganese production, and the high-grade manganese deposits at Moanda, near Franceville, are amongst the world’s richest. Gabon’s national mining company - Société Equatoriale des Mines (SEM), is the national operator; in theory the company is said to conduct its activities in line with the national mining strategy, however in practice, the company has been hampered with issues since its inception in 2011 and is currently undertaking a strategic development plan so as to better serve the country’s natural resource goals. The economic slow-down recently experienced by Gabon drove the government to pursue plans to diversify the country’s economy – reducing its reliance on oil. Mining quickly emerged as a key sector for targeted growth and as part of this endeavour Gabon rewrote its mining code in 2015. However, the new code did not bring about the economic reform the country hoped for and, in pursuit of foreign investment, another new mining code was promulgated in 2019.

PRINCIPAL LEGISLATION AND REGULATOR

As noted, Gabon underwent regulatory reform in 2019, promulgating a new mining law which replaced the existing code – itself a relatively young piece of legislation, having only entered into force in 2015. The Mining Code (MC) (Loi No, 037/2018 du 11 juin 2019 portant réglementation du secteur minier en République Gabonaise)  was promulgated in 2019 by Decree No. 00074 (Décret n°00074/PR du 11 juin 2019 portant promulgation de la loi n°037/2018 portant réglementation du secteur minier en République Gabonaise). The regulations referenced within the MC have not yet been issued. This was also the case with the previous law, which was repealed four years after it was promulgated without the accompanying regulations ever having been issued. Other legislation relevant to the mining industry includes: the Environmental Protection Act; the Decree for the Regulation of Environmental Impact Studies; and the Order Fixing Terms for the Approval of Environmental Impact Studies.

The mining industry falls under the authority of the Ministry of Mines, Energy and Hydraulic Resources (Ministry), headed by a Minister of the same title (Minister). Other relevant ministries include the Ministry of Waters, Forests, the Sea, and Environment in Charge of Climate Planning and Land Allocation and the Ministry of Commerce and Industry.

GRANTS AND MINERAL TITLE

Applicants for mining titles, besides those for reconnaissance and individual artisanal mining, must be legal entities incorporated under Gabonese law, which meet the basic requirements of Article 13, MC. Financial and technical capacity are key criteria for the granting of rights, with Article 15, MC setting out the types of documentation which can be provided to attest to such capacity.

Applicants for mining titles, besides those for reconnaissance and individual artisanal mining, must be legal entities incorporated under Gabonese law, which meet the basic requirements of Article 13, MC. Financial and technical capacity are key criteria for the granting of rights, with Article 15, MC setting out the types of documentation which can be provided to attest to such capacity.

  • Exploration Permit: Granted on application for a period of three years, with the option of renewal (Art. 102, MC). Grants the holder the exclusive right to prospect and explore for minerals within the licence area (Art. 102, MC); though an exception may apply in relation to artisanal mining activities (Art. 109, MC). Holders of Exploration Permits must enter into a Mining Convention (see below). 
  • Large-Scale Mining Permit: Granted to the holder of an Exploration Permit where evidence of an economically exploitable deposit is provided (Art. 114, MC; see also Art. 122, MC). Applications must be accompanied by a feasibility study and EIA (Art. 121, MC). Large-Scale Mining Permits are granted via decree (Art. 120,MC), for the life of mine and provide the holder with the exclusive right to prospect, explore and exploit the minerals covered by the title in the licence area. Holders of Large-Scale Mining Permits must enter into a Mining Convention (see below).
  • Mining Convention: A Mining Convention must be negotiated within one year from the issuance of any authorisation or title, regardless of whether the right is for exploration or exploitation. The Convention will set out the obligations and commitments of the parties and various legal, fiscal, economic and customs conditions (Art. 24, MC). Conventions are negotiated under the authority of the Minister and signed by the State and the title holder. Conventions are valid for the term of the applicable mining title (Art. 26, MC).

 

The MC also provides for Reconnaisance Authorisations; Small-Scale Mining Permits; artisanal mining rights; and quarry permits and authorisations.

DEVELOPMENT CONSIDERATIONS

An Environmental Impact Notice or EIA must be submitted as part of the application for exploration or exploitation rights. An environmental and social management plan must also be prepared, approved and kept up to date (Art. 163, MC).

Mining title holders and their subcontractors must: give priority to Gabonese nationals with equal skills and experience; offer professional internships to citizens; prepare training programmes for employees; and present for approval a plan for knowledge and skills transfer (Art. 43, MC).

Mining title holders must prepare a rehabilitation and closure plan and a guarantee for rehabilitation costs may be established (Arts. 153-156, MC). Plans for industrial risk and emergency plans relating to accidents must also be made (Art. 162, MC).

The MC also contains local processing requirements, with the terms and conditions to be set out under a Mining Convention (Arts. 148 – 149, MC).

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Environmental Overview Commentary plus sign

GABON ENVIRONMENTAL REGULATION

GENERAL

Gabon lies on the Equator, which runs through the centre of the African continent. The country’s coastline, which measures almost 900km, sits on the Atlantic Ocean, with the countries of Cameroon, Republic of Congo and Equatorial Guinea forming Gabon’s land borders.  Broadly speaking, Gabon’s landscape can be divided into three distinct regions – the savannah lands in the east; the hilly forest region of the interior; and the narrow coastal plains in the west. The majority of the country (some 80%) is covered by rain forest. Common trees include okoumé, mahogany and Gabonese ebony. Gabon also has an impressive range of wildlife, with notable species including forest elephants, leopards, gorillas, chimpanzees and hippos. The black panther is the national animal and the African tulip tree is the national flower. Due to its position on the Equator, Gabon has an equatorial tropical climate, characterised by hot and humid weather throughout the year.

According to the World Wildlife Fund (WWF), Gabon has managed to protect itself relatively well from the negative impacts of human activities in comparison to its neighbours and other African countries. Around 10% of its land is protected through a series of 13 national parks, which provide protection and conservation for both flora and fauna. That being said, the WWF reports that infrastructure development, poaching, illegal forest exploitation and mining have all begun to impact upon the country’s environment.

PRINCIPAL LEGISLATION AND REGULATOR

The primary environmental legislation applicable to the mining industry in Gabon is the Environmental Protection Act (Loi No. 007/2014 relative à la protection de l’environnement en République Gabonaise) ; the Decree for the Regulation of Environmental Impact Studies (Décret No. 000539/PR/MEFEPEPN 2005 réglementant les etudes d’impact sur l’environnement) (EIS Decree); and the Order Fixing Terms for the Approval of Environmental Impact Studies (Arrêté No. 2/PM/MEPNRT 2006 fixant les modalités de délivrance de l’agrément pour la réalisation des etudes d’impact sur l’environnement)  (EIS Order). The Mining Code (MC) also contains provisions relating to environmental requirements for mining activities, including terms on environmental management, the EIA process and environmental rehabilitation. Other relevant environmental legislation includes: the Forestry Code; the Sustainable Development Law; and the Fisheries and Aquaculture Law.

Environmental matters in Gabon are overseen by the Ministry of Waters, Forests, the Sea and the Environment, in Charge of the Climate Plan and Land Allocation Plan (Environmental Ministry), headed by a Minister of the same title (Environmental Minister). Both the Environmental Ministry and the Ministry of Mines plays a role in the EIA process applicable to mining activities in Gabon.

EIA PROCESS

According to the Mining Code, applicants for mineral titles are required to carry out an environmental evaluation prior to the granting of rights (Art. 159, MC; see also Art. 40, MC). For Large-Scale Mining Permits (LSMP) an EIA shall form a mandatory part of the application process (Art. 121, MC). Section 3 of the EIS Decree also sets out activities which must undergo an EIA - identifying mining activities including large borehole drilling, open-pit mining, quarry mining and underground mining (s. 3, EIS Decree). For activities which are not expressly identified under the EIS Decree, an impact notice must be provided, detailing the possible environmental impact and the conditions proposed to protect the environment in order to secure an exemption from the EIA process (s. 4, EIS Decree).

Under the terms of the EIS Order, an EIA must be carried out by a certified company or expert. Requirements for the EIA process itself are notable absent from the legal framework. Fifteen copies of the EIA must be submitted to the Environmental Minister for technical examination (s. 5, EIS Decree). The Environmental Minister shall then notify the Ministry of Mines of the outcome of the examination. If the EIA is approved the Ministry of Mines can grant the relevant mineral title (s. 5, EIS Decree).

Annual reports on the execution and monitoring of Environmental Management Plans must be submitted to the Environmental Ministry (s. 8, EIS Decree). The Environmental Minister has the capacity to suspend activities if the project proponent fails to observe the terms and conditions of its environmental approval (s. 9, EIS Decree).

Additional terms on environmental requirements can be found in the MC. Requirements for environmental preservation and protection may also be inserted into a Mining Convention (Art. 24, MC).

 

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