Iraq Mining Regulation
The Republic of Iraq sits in the centre of the Middle East separating Turkey (to the north) from Saudi Arabia (to the south), and Syria (to the west) from Iran (to the east). The Republic of Iraq has not had a recent legacy of mining minerals. It produces some industrial minerals for local consumption, such as bentonite, cement, clay, gypsum, limestone, nitrogen and phosphate fertilizers, phosphate rock, salt, aggregates and sulphur; in 2012, it produced no metals at all (USGS, 2012 Minerals Yearbook: Iraq, p. 49.1). Whilst the Government would like to see greater development of its non-hydrocarbon, mineral resources, the Government has not yet provided the regulatory platform to attract such investment.
Principal Legislation and Regulator
The principal mining legislation in Iraq is the Mineral Investment Law, No. 91 of 1988. It is a somewhat primitive piece of legislation and contemplates public and private sector development activities. The concept of a tiered system of title development (reconnaissance, exploration, exploitation, etc.) is lacking and an investor will be reliant upon a bespoke investment agreement. No doubt, under the right circumstances, a bespoke investment agreement may serve as a reliable form of tenure, however, the law itself offers no comfort as to the terms of an investment in the sector. The law is supervised by the Ministry of Industry and Minerals.
Grants and Forms and Mineral Title
There is only one form of mineral title in Iraq, namely, the Investment Contract. The Investment Contract will regulate all aspects of the relationship between the miner and the State, including the investment amount. Whilst little is found in the Mineral Investment Law, No. 91 of 1988, as to what the State will actually accept from an investor, the marketing of the Kirkuk Cement Plant offers some guidance. In this process, the tender documentation indicated that the evaluation criteria for selecting the investor would consider, among other things:
- The share of the production offered by the investor to the state;
- The investment size;
- The minimum period needed by the investor to obtain a sufficient return;
- The financial capacity of the investor; and
- The technical capacity of the investor.
One can expect these criteria to be applied in any negotiation of an Investment Contract.
The proponent of a project or activity must not undertake or continue the activity unless it has obtained an environmental licence (Art. 11 of the Law of Protection and Improvement of the Environment). In order to obtain such a licence, the equivalent of an environmental impact assessment is required (Art. 10). Access to land may be secured through a lease under the Investment Law No. 13 of 2006 and several other benefits are guaranteed under the law, including the right to repatriate profits in hard currency, visa permissions for permitted foreign workers, prohibition on expropriation, and exemptions from fees and taxes for a period of ten years.
See Iraq Environment Regulation.