MALI MINING REGULATION
Mali has vast natural resources, including gold, phosphates, kaolin, salt, limestone, uranium, gypsum, granite and hydropower. Gold is the country’s third largest export, while there are also known unexploited deposits of bauxite, iron ore, manganese, tin and copper. Despite its natural wealth, Mali remains one of the 25 poorest countries in the world, and the country’s fiscal status fluctuates depending on gold and agricultural commodity prices and the harvest. While cotton and gold exports comprise around 80% of the country’s export earnings, Mali has attempted to diversify its economy away from gold through investing in its iron ore extraction industry.
The Fraser Institute ranked Mali 65th out of 109 countries in its 2015 survey. The global recession, a military coup and terrorist activity in the north caused a decline in output in 2012, and potential physical insecurity remains the primary threat to Mali’s economic development. Mali also faces high population growth, weak infrastructure and corruption. The mining industry has been criticized due to working conditions, displacement of villages for mine construction, and the widespread use of child labour in small-scale gold mining.
PRINCIPAL LEGISLATION AND REGULATOR
The principal minerals legislation in Mali is the Mining Code (Code Minier, Loi No. 2012-015 du 27 février 2012) and the Mining Decree (Décret No. 2012-311/P-RM du 21 Juin 2012 fixant les conditions et les modalités d’application de la code minier). Under Article 4 of the Mining Code, all mineral substances on the territory belong to the state. Mining titles grant rights to the extracted materials and are distinct from surface rights. The Mining Code groups mineral substances by type, and mining titles related to substances in Group 1 (including diamond, emerald, sapphire, opal, jade, etc.) may overlap with mining titles to mineral substances in other groups, which cannot overlap with each other. The Ministry of Mines and the National Directorate of Geology and Mines (DNGM in French) govern the mining industry in Mali.
Mining titles are granted to legal persons with demonstrated technical and financial capacity, and can be cancelled or revoked without compensation in certain circumstances following a formal notice without effect for 90 days (for exploitation permits) or 60 days (all other mining licences), including for violation of the conditions, obligations or restrictions relevant to that particular mining title. The Implementing Order (Décret d’application) defines the modalities for renewal, renunciation, transfer, lease, and determines the contents of the feasibility study and the Environmental and Social Impact Study (or Environmental and Social Impact Notice), and the Community Development Plan. The Mining Decree also provides extensive environmental and community engagement provisions, and details the role of the Mining Police (police des mines), administrated by the DNGM under the authority of the Ministry of Mines.
GRANT AND FORMS OF MINERAL TITLE
Several types of licences may be granted under the Mining Code, namely:
Exploration Authorisation: This licence is granted to the first legal person demonstrating the necessary technical and financial capacity and a work plan. The licence is valid for three months, and is renewable, though it cannot be assigned, transferred or leased. An exploration authorisation cannot be granted over a zone covered by a valid mining title for the same group of substances. The licence is issued by the Director of Mines, and the title holder must provide a report to the Director of Mines on the work completed and results obtained within one month of the expiration of the licence.
Prospecting Authorisation: This licence confers the exclusive prospecting right for the particular group of substances within the relevant perimeter. The authorization is assigned by order of the Minister of Mines to all legal persons, provided at least one shareholder is Malian. In the event of discovery of substances belonging to another group, the titleholder can request an extension of the licence unless there is a pre-existing mining title for this group of minerals. The prospecting authorisation is valid for three years, renewable once as a matter of right without a reduction in surface area as long as the titleholder has fulfilled its obligations under the Mining Code. A prospecting authorisation is issued to all applicants who possess the necessary technical and financial capacity to carry out the prospecting work and meet the relevant environment, hygiene, safety and public health obligations. The applicant must submit a report with the prospecting plan and annual budget together with the request for the licence. The prospecting authorisation is a personal, indivisible right that cannot be leased, though it can be transferred or assigned. The titleholder must submit any contracts or accords assigning or transmitting any rights or obligations under the licence to the Minister of Mines.
Research Permit: This permit confers the exclusive right to conduct research within the relevant perimeter for the particular group of substances (and can be extended to include other groups), and to freely dispose of the extracts produced during research and testing. The permit is issued to legal entities by order of the Minister of Mines, and is valid for three years, renewable twice for two-year periods as of right provided that the permit holder has upheld its obligations under the Establishment Convention and the order awarding the research permit. It is possible to extend the permit for one additional year if the work is not yet completed. The permit is issued for all applicants with the necessary technical and financial capacity to conduct research and meet the relevant environmental, hygiene, security and public health, who submit a report with the research program and annual budget. The permit is a movable, indivisible right that is assignable or transferrable, but cannot be leased. The titleholder must submit any contracts or accords assigning or transmitting any rights or obligations under the licence to the Minister of Mines. A permit holder with several contiguous permits may request the amalgamation of such properties into one title.
Exploitation Permit: This permit can only be granted to the holder of a research permit or a prospecting authorisation. It confers the exclusive right to prospect, explore and mine the relevant mineral substances for which the original prospecting or research licence was granted, as well as those for which proof of an exploitable deposit is provided to the DNGM through a feasibility study, a community development plan, and a mine closure plan. The holder must create a corporation under Malian law in which the state receives 10% ownership free of all charges. The State reserves the right to acquire an additional 10% of the mining company, and domestic private investors have the possibility to acquire a minimum of 5% of the shares. The exploitation permit is issued for 30 years, renewable for 10-year periods until the reserves are exhausted. The permit is an immovable right, and can be transferred and leased. Transfer or lease of the exploitation licence will not take effect unless authorized by decree (this must be a condition precedent), and the relevant request should be made within 30 days of the signing of the deed of sale or lease. The permit can be mortgaged or pledged provided that the borrowed funds are used for mining activities. Subject to the provisions of the Mining Code, the legislation in force regarding land ownership is applicable to exploitation permits, including rules regarding publication of title.
Other small scale licences exist and, in particular, an Artisanal Mining Licence granted to Malian nationals or legal entities whose capital is held exclusively by Malians (or from countries according reciprocity to Malians) and a Small Mine Mining Licence, which is granted to research permit or prospecting authorisation holders who provide a feasibility study indicating the existence of a deposit that can be exploited as a small mine. These licences are for short periods of time (for a small scale mine it is four years, though renewable).
An environmental and social impact assessment (or EIES, in French) is required under the Mining Code for projects that have a substantial environmental impact. Mining permit applicants must also provide a community development plan, in addition to a feasibility study. The plan is produced every two years, in consultation with the community and local and regional authorities. The DNGM must ensure the existence of a Technical Committee for Community and Local Development, which approves, monitors and controls the implementation of the community development plan, and provides periodical reports to the Minister of Mines. At the request of the titleholder, the DNGM, in accordance with the EIES and the Resettlement Plan and the Report on the Procedures for Compensation and Resettlement, can proceed with the displacement and resettlement of the population whose presence interferes with the mining activities. The mining titleholder bears all costs of this process.
Under Article 20 of Decree 08-346, the Minister of Environment issues an environmental permit if the environmental report is satisfactory. This permit is required for all projects that require an EIES report (Category A and B projects) prior to commencing works. The Minister has 45 days from the submission of the EIES report to issue a decision on the environmental permit. The EIA process depends on the three-tier categorization of projects: Category A projects have very severe negative, unprecedented, and generally irreversible impacts which are often felt beyond the work site; Category B projects have less severe impacts on people and the environment, which are generally reversible; and Category C projects have insignificant negative environmental impacts. For A and B projects, a full EIES study resulting in an EIES report is required, while Category C projects require a simplified impact assessment resulting in an Environmental and Social Impact Notice (NIES, in French).
The consent of the surface rights holder is required for exploration and mining activity that impacts the surface, however, in the absence of consent, surface title holders may be obligated to allow the mining title holder to perform work subject to adequate and prior compensation. Compensation due to the establishment of easements or other occupation or access rights is fixed as in matters of expropriation. Rights holders to a parcel of land, including landowners, holders of occupancy or customary rights, may require the miner to purchase the land if such easements render the normal use of their land, occupation or customary rights impossible.
See Mali Environmental Regulation.