TUNISIA MINING REGULATION
Tunisia, one of the wealthiest countries in Africa, is currently undergoing economic reform and liberalization. The country’s economic growth has historically depended on oil, phosphates, agri-food products, car parts manufacturing, and tourism. Tunisia’s exports include textiles and apparel, food products, petroleum products, chemicals and phosphates. The phosphates, base metals and petroleum industry provide the majority of the countries foreign earnings, with phosphates alone accounting for almost 45% of the country’s export earnings. The minerals industry contributes roughly 3% to Tunisia’s GDP.
The January 2011 overthrow of President Zine el Abidine Ben Ali had a severe impact on investment and tourism, damaging Tunisia’s economy. The Tunisian government’s current challenges include controlling the budget and current account deficits, strengthening the financial system, addressing the high unemployment rate and the economic disparity between the coastal region and the less developed interior, as well as providing reassurance to investors.
PRINCIPAL LEGISLATION AND REGULATOR
The principal minerals legislation in Tunisia is the Mining Code (Loi no. 2003-20 de 28 avril 2003 portant promulgation du code minier), which replaced the earlier 1953 Mining Code in an effort to promote investment. Article 7 of the Mining Code provides that mineral substances in the soil and subsoil of the territory of Tunisia and its oceans are the property of the state. Mineral rights cannot be pledged, but extracted minerals and the shares of mining companies are movable rights. Prospecting, exploration and mining operations are subject to mining titles issued by the Minister responsible for Mines.
Any natural person or legal entity fulfilling the necessary conditions can obtain a mining title. When considering an application for an Exploration Permit, the technical and financial capacity of the applicant and the nature of proposed work will be taken into consideration. In the event of competing applications for the same area, such applications are classified according to the abovementioned criteria.
The Mining Code created a Mining Consultative Committee (Comité Consultatif des Mines) whose opinion is obligatory in cases specified by the Code, though the Minister responsible for Mines can consult the committee for any other mining-related issue. Mines are regulated by the National Office of Mines, which conducts geological research, prepares geologic and geophysical maps, and promotes private mining operations. The Mining Code sets a tax rate of 25% on mining activity profits, but in includes a five-year tax holiday at the beginning of exploitation.
The Mining Code categorizes minerals into six groups, namely:
- 1st Group: Combustible solids, including graphite, anthracite, coal and lignite.
- 2nd Group: Combustible liquids and gases, including bitumen, asphalt, petrol and other gases.
- 3rd Group: Base, precious and other metals and stones, including iron ore, lead, zinc, copper, gold, silver, nickel, tungsten, uranium, thorium and diamonds.
- 4th Group: Solid and natural salts, including iodides, borates, nitrates and salt deposits.
- 5th Group: Only phosphates.
- 6th Group: Industrial minerals, including kaolin, dolomite, quartz and silica.
Exploration Permits and Exploitation Concessions are granted for all substances within a particular group. Different persons may hold Exploration Permits and Exploitation Concessions in the same perimeter for different groups of minerals. In the event that two Exploitation Concessions for mineral substances of different groups overlap, if there is no agreement between the two titleholders, the Minister in charge of Mines determines the manner in which the mining works will be completed to minimize prejudice to each titleholder.
GRANT AND FORMS OF MINERAL TITLE
The Mining Code provides for the following types of mining titles:
- Prospecting Licence (l’autorisation de prospection): This authorization is accorded by order of the Minister in charge of Mines to allow prospecting activities for one or more mineral substances to enable the preparation of applications for Exploration Permits. The authorization is valid for a maximum period of one year, renewable once for an additional year, and cannot be transferred. Prospecting authorizations for the same zone can be issued to multiple petitioners. The territory covered by the authorization may include the perimeter of another mining title unless the Exploration Permit or Mining Concession is for the same group of minerals. The rights of a mining titleholder prevail over those of the prospecting authorization holder, and the prospecting authorization holder cannot impede the mining titleholder’s activities. This authorization is not a prerequisite for an Exploration Permit.
- Exploration Permit (permis de recherche): This permit grants the holder the exclusive right to undertake exploration activities and the exclusive right to obtain a Mining Concession during the duration of the Exploration Permit. The petitioner must have an actual or designated domicile in Tunisia, or designate a representative domiciled in Tunisia. The mineral substance groups and the requested surface listed in the written application cannot be modified. Applications for Exploration Permits must specify the nature of the exploration work, the minimum expenditures necessary to conduct the work, and a description of the management and those responsible for supervision. The review of an Exploration Permit will include the technical and financial capacity of the applicant as well as the nature of the proposed work. Concurrent applications for the same area are classified according to the abovementioned criteria. The permit is granted subject to any rights legitimately acquired by third parties. The Permit is granted by order of the Minister responsible for Mines with the accord of the Mining Consultative Committee for an initial period of three years, renewable for two successive periods of a maximum of three years each, provided that the holder has fulfilled its obligations, presents a request prior to the expiration of the permit, commits to a minimum work and financial plan, provides proof of sufficient technical and financial capacity, and has not committed any infractions or grave environmental harm. An exceptional renewal is possible after the second renewal in the event of a discovery of an exploitable deposit. The titleholder must begin works within one year. The renewal can include all or part of the original perimeter at the request of the titleholder. Exploration permits are considered real estate, and are indivisible and transferable after death (upon notification of the Minister in charge of Mines). The title can only be transferred or leased in whole or in part to enterprises that satisfy the conditions for the granting of an Exploration Permit and transfers or leases must have prior authorization from the Minister responsible for Mines with the approval of the Mining Consultative Committee. Authorization for transfer or lease is of right provided that the petitioner has completed the minimum work fixed in the order granting the permit (authorization is deemed granted if the Minister does not issue a decision within two months). The Permit may be cancelled for failure to fulfil the obligations under the permit and other refusals to conform to required terms and conditions. In the event of a discovery of a substance outside the group for which the concession was granted, the titleholder can apply for an Exploration Permit or Mining Concession to cover the group of minerals. This will be accorded ex officio. If another titleholder claims this substance under a prior Mining Concession, the later Mining Concession holder can obtain the substance upon payment of just compensation.
- Exploitation Concession (concessions d’exploitation): This title is granted by the Minister in charge of Mines upon the approval of the Mining Consultative Committee for a period consistent with the existing reserves (and can be extended as necessary) and confers the exclusive right to conduct mining operations and to dispose of the extracted minerals. The granting of an Exploitation Concession cannot prejudice the rights of other titleholders on the same land and dealing in whole or in part on the same area and the same group of substances minerals. Work must commence within two years or the title may be cancelled. This title cannot exceed the perimeter covered by the Exploration Permit upon which it is based, and can only include the substances covered by the Exploration Permit. The Exploitation Concession is granted under the following conditions: demonstrated existence of an economically viable deposit on the perimeter; acceptance of the general terms and conditions of contract (cahier des charges) relative to production, amount of Exploration work, and quantities of equipment for which the titleholder will be held accountable (the cahier des charges will be approved by decree and will establish the dispute resolution mechanism and stipulate the rights and obligations of the titleholder); demonstrated technical and financial capacity; a development plan. The Exploitation Concession is considered real estate and is indivisible. The transfer or lease, in whole or in part, must be subject to authorization by the Minister in charge of Mines, with the agreement of the Mining Consultative Committee. This authorization can be refused for the same reasons for which an Exploitation Concession application can be refused. The Exploitation Concession can be cancelled if the titleholder: no longer has the technical and financial capacity to meets its obligations; has not paid the proportional fees; refuses to accept the obligations of a partner who withdraws; refuses to provide the necessary documents; or refuses to conform to the measures prescribed by the Minister in charge of Mines in the Mining Code. In the event of cancellation, the granting authority reserves the right to exploit the mine directly or indirectly. If the titleholder, without legitimate reason, does not conform to the obligations under the Code, the titleholder may be put on notice to comply with its obligations within six months.
The Mining Code requires that Exploration Permit and Exploitation Concession holders conform to the existing requirements regarding health and safety, environmental protection, and water and forestry. In the absence of other requirements, the titleholder must: complete an environmental impact study; enact measures to protect the environment and respect the commitments made in the EIS; obtain an insurance policy for the risk of harmful impact to their surroundings or third parties; enact measures necessary to protect human life and the environment in cases of extraordinary circumstances due to the titleholder’s behaviour or natural phenomenon; and take necessary measures to protect works from professional risks. The Land Management and Urbanism Code (Code de l’Aménagement du Territoire et de l’urbanisme promulgated by Loi no. 94-122 du 28 novembre 1994, as amended by Loi no. 2003-78 du 29 décembre 2003, Loi no. 2005-71 du 4 août 2005, Loi no. 2009-29 du 9 juin 2009 modifiant et complétant le code de l’aménagement du territoire et de l’urbanisme) and its implementing regulations provide the requirements for the environmental impact study (EIS).
The Mining Code requires a development plan as part of the application for the Exploitation Permit. The development plan must include the following elements: geological study and estimate of the reserves; mining plan; mineral treatment plan; feasibility study; a study on the personnel/human resources requirements and a plan for the recruitment and training of local personnel; schedule for the development; environmental impact study corresponding to the applicable legislation. The Mining Code also requires that the titleholder produce an abandonment plan and a site rehabilitation plan and requires rehabilitation of the site so as to avoid prejudice to the health and security of third parties, the environment, and the natural resources. The titleholder remains liable for five years for all damages caused by its exploitation of the mine.
Titleholders must, to the extent possible, prioritize the hiring of Tunisian personnel and assure the training of Tunisian personnel in all specialties required for the mining work in conformity with a plan agreed with the competent services of the Ministry responsible for professional training. The titleholders are also obligated to prioritize the use of materials or products made in Tunisia, as well as services and subcontractors of Tunisian nationality, provided the price, quality, and delivery schedules are equivalent to international offers.
No mining title gives the right to occupy the surface land for prospecting, exploration or exploitation without the written consent of the land titleholder. Nevertheless, in the absence of an amicable agreement, the titleholder can obtain authorization by order of the Minister in charge of Mines to occupy the land necessary to conduct its activities. This notification is transmitted to the land titleholder by the mining titleholder and is effective immediately. The landowner has a right to compensation, paid in advance, which (in the absence of an amicable agreement) is fixed at an annual price of twice the rental value at the time of occupation. The mining titleholder must also provide compensation for any damages caused by its activities. Occupation of enclosed land always requires the owner’s consent. If any occupation of land prevents the landowner from using the land for a period of more than three years, the titleholder may have to acquire the land according to the relevant regulations, with a price set at twice the value of the land at the time of occupation. Disputes regarding the payment are within the jurisdiction of tribunals, who issue orders that are enforceable, regardless of whether there is an appeal. The surface rights titleholder can claim, in exchange for fair compensation, any substances which are not used by the operator and not classed as mines.
Mining titleholders can only occupy public or private land belonging to the state or local authorities with prior authorization, and must provide compensation for any damage caused to public or private property. The state reserves the right to use any paths or trails established by the titleholder for providing public services. If public works cause damage or modifications to mining facilities or impede the mining activities, the titleholder is entitled to compensation for the value of the prejudice caused, as determined by a competent tribunal in the absence of an agreement.
See Environmental Overview Commentary.