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Mining Code 2011 (amended 2013)

Legal Risk Rating
31
0
100
Score: 31
Severe Risk
The Guinea mining code is so replete of acceptable standards of security of tenure that it will necessarily compel a major mining company to suspend its investments pending a comprehensive agreement that overrides its provisions. Few pieces of mining legislation have been so poorly conceived. The legislation is likely to have been heavily influenced by local advisors and/or NGOs.

Regulatory Corruption Risk

Extremely High Corruption Potential

Corruption Exposure Risk

Very High Corruption Risk

Legal Risk Rating

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General

Guinea, officially the Republic of Guinea, is located in West Africa bordering the Atlantic Ocean with Guinea-Bissau to the north-east, Senegal and Mali to the north and west and Côte d’Ivoire, Liberia and Sierra Leone to the south-east and south. As the name suggests, Guinea is a republic with an elected president and national assembly. The country has had a difficult history, with a coup and military rule, political violence and the Ebola outbreak occurring within the last 20 years.

The country’s economy is mainly reliant upon agriculture, natural resources, manufacturing and services. Agriculture is the main source of employment, particularly in rural areas. Though Guinea is considered to be one of the poorer countries in the world, it has considerable mineral wealth. In fact, its mining industry has grown considerably in recent years, resulting in overall economic growth, according to reporting from the World Bank. Guinea is the world’s second largest producer of bauxite with the largest bauxite reserves, estimated at 29 billion tonnes. It also hosts world-class iron ore resources that have been the subject of competition among the world’s leading mining companies. Other minerals in the country include gold and diamond deposits. However, political and social instability, alongside various other infrastructure and governance issues, continue to stifle both Guinea’s natural resource prospects and the country’s economic potential.   

Principal Legislation and Regulator

The primary minerals legislation in Guinea is the Mining Code of 2011 (MC) (Loi 2011/006/CNT de 9 septembre 2011 as amended by Loi 2013/053/CNT). This law applies without prejudice to the relevant provisions of the OHADA Uniform Acts and other national laws. A host of regulations to support the law were implemented, primarily in 2014, including: Decree No. 2014-015 on the adoption of a model mining convention; Decree No. 2014-012 on the management of mining titles and permits; Decree No. 2014-013 on the application of the financial provisions of the Mining Code; Decree No. 2014-014 adopting a directive for carrying out environmental and social impact studies of mining operations; and Order No.2016-6074 on the fixed duties, taxes and charges for mining titles and authorisations. Other relevant legislation includes the Environment Code and Tax Code. As a member of both OHADA and UEMOA, certain laws, rules and regulations of the two organisations apply in Guinea, including the UEMOA Mining Code 2003 and OHADA’s Uniform Act relating to Commercial Companies and Economic Interest Groups.

The industry is regulated by the Ministry of Mines and Geology (Ministry) which is headed by the Minister of Mines and Geology (Minister). The various departments of the Ministry are listed under Article 9, MC and include the: National Mines Authority (La Direction Nationale des Mines); Mining Promotion and Development Centre (Centre de Promotion et de Développement) (CPDM); Directorate General for Mining Projects Authority (La Direction Générale des Projets Miniers); and the Inspectorate General for Mines and Geology (L’Inspection Générale des Mines et de la Géologie). The law also established the National Mining Commission (Commission Nationale des Mines) to participate in the examination of applications for the grant, renewal, transfer, extension and revocation of rights and the Technical Committee of Titles (Comité Technique des Titres) which shall assist the CPDM in relation to title matters.

Grants and Forms of Mineral Title

Natural and legal persons with financial and technical capacity may obtain exploration rights in Guinea, though only individual or legal entities constituted as a public or private corporation under Guinean law may obtain exploitation rights (Arts. 15 & 30, MC).

The following titles and authorisations are provided for under the MC:

  • Exploration Permit: Confers the exclusive right to prospect for the type of mine substance(s) for which the permit is issued. Granted on application or via tender in areas of known mineral wealth or with established geological information. Rights are granted for a period of three years and are renewable for further two-year periods, though limits apply. A work programme and expenditure plan must be submitted with the application. Restrictions apply to the total number of Exploration Permits which may be held. Rights are granted via Ministerial Order on the basis of a recommendation from the CPDM following the approval of the Technical Committee of Titles.

 

  • Exploitation Permit: Confers the exclusive right to search, prospect, develop, mine and freely dispose of the mineral substances for which it was granted. Rights are granted upon application to the holder of an Exploration Permit or via tender in the absence of exploration rights over a deposit. Rights are granted for a period of up to 15 years, renewable for further periods of up to five years. A feasibility study must be submitted as part of the application alongside various other documentation, including a work schedule, ESIS and community development plan. Rights are granted via decree issued by the Council of Ministers.

 

  • Mining Concession: This title is similar to the Exploitation Permit except that the Mining Concession is granted for a maximum period of 25 years and can be renewed for 10-year periods. Mining Concessions are granted for investments of certain thresholds which vary according to the category of mine substance to which the right relates. The application requirements and process for the granting of rights is the same as for an Exploitation Permit (see above).

 

  • Mining Convention: Exploitation Permits and Mining Concessions are issued in conjunction with a Mining Convention which establishes the parties’ rights and obligations. Conventions will be issued for a duration which corresponds with the title to which it relates and may be renewed. Conventions are signed by the Minister with the approval of the National Mining Commission and Council of Ministers and ratified by the National Assembly.

 

Other permits, such as Semi-Industrial Exploration and Exploitation Permits, as well as Artisanal Exploitation Permits, are granted only to Guinean nationals, wholly Guinean-owned companies, or foreign nationals of countries who grant reciprocity to Guinean nationals. These are small-scale licences of little interest to foreign investors.

Development Considerations

The State is entitled to a free carried interest upon the issuance of an Exploitation Permit and may acquire additional interests. Royalties and taxes are also provided for. The State reserves the right to enter into production sharing arrangements.

The consent of the landowner shall be required for activities on or affecting the surface of the land and compensation must be provided. No prospecting, exploration or exploitation of a mine can begin on a surface within 100m of walled properties, villages, settlements, wells, religious buildings, cemeteries and sacred sites without the consent of the owner(s), or on either side of communication channels, water lines, and public utilities or works of art. No mines are allowed along the seashore. Mining title holders may install facilities and construct buildings, but must apply for specific authorisation from the Minister for the following: uprooting of all trees and shrubs other than obstacles, and logging; exploitation of used and not reserved waterfalls; setting up facilities for the preparation, concentration or chemical or metallurgical treatment; creation or improvement of roads, canals, pipelines, pipes, conveyors or other surface structures; and creation and development of railways, sea or river ports and airports.

Quarterly and annual reporting requirements apply to all mining titles and authorisations. See Article 81, MC for administrative requirements relating to reports.

A range of local content terms apply to mining operations. Employment quotas and minimum thresholds for the use of local companies are set out under the MC. Various plans and programmes for local capacity building, development and training are also required. Preference must be given to Guinean companies for goods and services where comparable terms are offered. Local Development Agreements must be entered into and contributions made to a Local Development Fund.

The Mining Code includes provisions regarding mine closure, with a plan required to eliminate risks to health and safety, rehabilitate the site to a level acceptable to the local community, and restore vegetation. Notification requirements apply to closure and must be given both at 12 months and six months prior. A fund must be established for the purpose of rehabilitation and closure. The law also provides occupational health and safety requirements.

Further Information

Please see the Regulatory Risk Analysis for additional information. For the EIA Process please see the Environmental Overview Commentary.

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General

Guinea or the Republic of Guinea (with its capital, Conakry) is located in Western Africa, bordering the North Atlantic Ocean, between Guinea-Bissau and Sierra Leone. The country has strong biodiversity though lacks comprehensive conservation solutions, up to date environmental laws and adequate enforcement of environmental protections.

Guinea’s geography can be separated into four main regions – Lower Guinea, Upper Guinea, the Guinean Highlands and Fouta Djallon. The latter is mainly highlands and due to heavy rainfall provides the headwaters of several major African rivers including the Niger and Gambia. To provide a general overview, the terrain in the coastal regions is fairly flat, whilst the interior ranges from hilly to mountainous. The climate is generally hot and humid, with a monsoonal-type rainy season (June to November) and a dry season (December to May) with harmattan winds. In terms of flora and fauna, Guinea is home to elephants and chimpanzees which can be found in the forest areas, as well as baboons, hippos, hyenas and giraffes. Manatees, whales and dolphins are commonly found in the country’s waters.  Mangroves forests are found close to Guinea’s waterways, particularly near the numerous river mouths. Parinari trees are spread across the country, as are baobabs, shea trees and tall grasses.

Current environmental challenges include deforestation, poor water supply in terms of both quality and quantity, overpopulation, overfishing, soil contamination and erosion and desertification.

Principal Legislation and Regulator

The general environmental legislation in Guinea is the Code for the Protection and Development of the Environment 1987 (Environment Code) (Code sur la protection et la mise en valeur de l’environnement) as amended in 1989. Additional relevant legislation includes Decree No.1989-199 on the EIA process and Order No.990 regarding the methodology for EIAs. However, these environmental laws and regulations provide little detail, particularly in relation to the mining industry, and are somewhat outdated in terms of international standards. The environmental provisions of the Mining Code 2011 (as amended in 2013), alongside Decree No. 2014-014 adopting a directive for carrying out environmental and social impact studies of mining operations (EIA Decree), provide a much more comprehensive legal framework and are specifically drafted to apply to the environmental aspects of mining projects. A General Guide on Environmental Impact Assessments was also published in 2013 and provides guidance on the requirements and process for EIA (EIA Guide). 

The Ministry of Environment, Water and Forests (le ministère de l'environnement, des eaux et forêts) (Environmental Authority) is the primary government authority. The Guinean Office of Environmental Studies and Assessment (Bureau Guinéen d'Études et d'Évaluation Environnementale) (BGEEE) within the Environmental Authority is responsible for the management and oversight of EIAs and related matters, with the Technical Committee for Environmental Analysis (Comité Technique d’Analyse Environnementale) (CTAE) providing additional input. The BGEEE works with the National Mining Authority, National Mining Commission and the Technical Committee of Mining Titles to provide technical and environmental evaluations and associated opinions relating to the granting and renewal of rights. The Ministry of Mines and Geology (Mining Authority) provides co-ordination between the titleholder and the Environmental Authority.

EIA Process

Environmental requirements vary under the Mining Code which, as stated under Article 142, vary from a simple Environmental Impact Notice in the case of an Exploration Permit to an Environmental and Social Impact Study (ESIS) including a Hazard Study, Risk Management Plan, Hygiene, Health and Safety Plan, Rehabilitation Plan and Resettlement Plan for an Exploitation Permit or Mining Concession (see also Arts. 82 & 83, Environment Code and Decree No.199).

Holders of Exploration Permits must file an Environmental Impact Notice (EIA Notice) before the start of works and no later than six (6) months after the title has been granted (Art. 142, MC).  The notice must take into account the nature of the substances to be explored and the category of work which must be carried out (Art. 1.2, EIA Decree). According to the EIA Decree and EIA Guide, prior to filing an EIA Notice a project notice must be filed with the Mining Authority with provides general information relating to the project. The notice will be passed on the Environmental Authority for consideration (Art. 3.2, EIA Decree; see also s.2.2, EIA Guide). The EIA Notice must then be prepared and submitted for approval.

In order to obtain an Exploitation Permit or Mining Concession a full ESIS must be carried out and the approval of the Environmental Authority obtained. The purpose of the ESIS is to consider how people and the environment will be impacted by the project and to provide the project promotor with an environmentally sound project (Art. 2.1, EIA Decree). Various general characteristics and standards are set out under the EIA Decree – including the use qualified staff for the preparation of the ESIS, the incorporation of project modelling where possible, and the taking into account of IFC Performance Standards regarding surrounding populations. The project promoter is also required to demonstrate that it will comply with either national environmental standards or international standards such as those of the IFC and ICMM and explain the use of either set of standards within the ESIS (see Part II, EIA Decree).

Part III of the EIA Decree outlines the process for the ESIS, with content requirements specified under Part IV. Initially, proponents must file a project notice with the Environmental Authority via the Mining Authority and subsequently hire a suitably qualified company to conduct the ESIS, with the assistance of a Guinean approved consultant if the company does not itself meet this requirement (Arts. 3.2-3.3, EIA Decree). Minimum fees for the ESIS are provided under the EIA Decree (Art. 3.7, EIA Decree).

An environmental framework must then be prepared in order to determine the Terms of Reference (TOR) for the ESIS. The framework must identify the main environmental and social challenges for the project. The framework shall be verified by the Environmental Authority. The TOR must provide: a description of the draft pre-feasibility study; a description of the environment; the study area; a list of questions and potential impacts arising from the project, as well as its priorities; a public consultation plan; and a budget for the ESIS. 23 copies of the draft TOR must be submitted to the Environmental Authority for examination and approval by the BGEEE in collaboration with the National Mines Authority (Art.3.4, EIA Decree). The examination of the TOR shall take seven (7) working days (Art. 3,7, EIA Decree).

The ESIS must then be conducted on the basis of the approved TOR. As noted, the requirements for the ESIS Report are set out under Part IV of the EIA Decree. The requirements appear to be relatively standard and, amongst other things, include: information on the project promotor; project context and description; project options and variables; justification of why the chosen options have been selected; details of the preparatory and construction phase; details of the exploitation operating phase; details of the closure and rehabilitation phase; details of the project area and study area; a description of the environment; a land use plan; impact analysis and mitigation measures; and an Environmental and Social Management Plan (see also Part Four, EIA Guide).   

Public consultations form a key aspect of the ESIS. Consultations of some form must be carried out before, during and after the ESIS in order to take into consideration the interests, values and concerns of local or regional populations. At least 30 days before the ESIS is to be commenced, local communities must be informed of the project in a language and manner which is suitable. A project notice must be prepared for such purposes which must specify the schedule for the ESIS, information on community meetings and any other activities which may be carried out directly involving local people (Art. 3.1, EIA Decree).

Upon completion, the ESIS Report must be submitted for examination and approval. 23 copies of the ESIS Report must be submitted alongside a request for review and approval, a project description, and 23 copies of a non-technical summary (Art. 3.7, EIA Decree). The CTAE will be primarily responsible for the examination of the ESIS. The examination will be conducted within 15 working days (Art. 3.7, EIC Decree). The decision to approve an ESIS shall be notified to the promotor within a maximum of 12 working days following the examination period. Approval instruments will then be provided to the Mining Authority and the project may be authorised.

As regards other environmental obligations the Mining Code provides considerable input in relation to rehabilitation and closure, including a requirement for Exploitation Permit and Mining Concession holders to open and fund an environmental rehabilitation and trust account, in accordance with the Environmental and Social Management Plan, to guarantee the rehabilitation and closure of the mining site. The terms of its operation will be determined by joint orders from the ministers for mines, environment and finance (Art. 144, MC).

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