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  • Population, mn: 26.8
  • GDP, US$bn: 29.4
  • GDP per capita, US$: 1,066.7
  • Inflation, CPI ave: 11.0
  • Budget Balance, % of GDP: -12.6
  • FX, LCY/US$: 237.6
  • Mining GVA, US$bn: 8.5
Regulatory Risk Rating
52
0
100
Score: 52
Substantial Risk
Yemen's 2010 mining code contains modern concepts of reconnaissance, exploration and mining, as well as quarrying, rights; it is careful to preclude multiple use of land for competing purposes and is quite straightforward in its drafting; weaknesses in the legislation concern several potential "traps" where performance obligations may lead to the loss of a licence (e.g., the obligation to commence mining within two years of certain conditions and to maintain commercial operations) and language needlessly discretion on the part of the Board that overseas the granting of licences.

Corruption Potential Index

Score: 45
Moderate Corruption Potential

Corruption Risk Index

Score: 37
Very High Corruption Risk

Regulatory Risk Rating

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Mining Overview Commentary plus sign

YEMEN MINING REGULATION

GENERAL

The Republic of Yemen is an Arab country in Southwest Asia, occupying the south-western to southern end of the Arabian Peninsula. Yemen has a coastline of about 2,000 km (1,200 mi) and is bordered by Saudi Arabia to the north, the Red Sea to the west, the Gulf of Aden and the Arabian Sea to the south, and Oman to the east. The country has experienced a history of political turbulence since its formation which occurred as a result of the unification of North Yemen and South Yemen in 1990. In recent years, former president Saleh caused substantial unrest after making a proposal to alter the country’s constitution in order to perpetuate his family’s political control. He ultimately agreed not to extend his presidency in return for immunity from prosecution for the various crimes committed during his term in office.

Yemen is a large country with a size roughly equivalent to that of Spain. It has substantial potential for economic deposits of gold, zinc, lead, silver, copper, nickel, platinum and iron ore. Yemen maintains policies aimed at encouraging FDI in the minerals sector and its investment laws similarly promote the fair and equitable treatment of foreign investors. The country is not rated by the Fraser Institute, nor are many of the foreign companies active in its mineral sector. One base metal (nickel, copper and cobalt) project was the subject of a major company (Vale International) investment, but the project was apparently dropped in 2013.

PRINCIPAL LEGISLATION AND REGULATOR

The principal minerals legislation in Yemen is the Law Concerning Mines and Quarries of 2010 (No. 22 of 2010) (“2010 Law”), which provides that all mineral resources are State property (2010 Law, Art. 58.2). The 2010 Law is administered by the Ministry of Oil and Minerals and, with respect to licencing, the Geological Survey and Minerals Resources Board (Board). Foreign companies may participate equally in the acquisition of mineral titles. There are regulations that also apply to the sector. Yemen’s mining law was reformed in 2010 following the assistance of the International Finance Corporation, a member of the World Bank Group.

GRANT AND FORMS OF MINERAL TITLE

The 2010 Law includes reconnaissance, exploration, mining, small-scale mining and quarry licences. Set out below are the key elements of some of these licences:

 

  • Reconnaissance Licence: The licence should not exceed 10,000 sq. kilometres, is issued for a period of one year and may be renewed once (2010 Law, Arts. 7 and 12); it does not entitle the holder to carry out trenches, drilling or similar works, but is needed for airborne surveys (2010 Law, Arts. 9.2 and 10).

 

  • Exploration Licence: The licence is an exclusive licence for all minerals and provides the right to obtain a mining licence (2010 Law, Arts. 25 and 28). It is granted for a three-year period and may be renewed twice (2010 Law, Arts. 22 and 23). The licence may not be granted over areas that are already the subject of an exploration, mining or quarry licence (2010 Law, Art. 18).

 

  • Mining Licence: A mining licence is issued for a period of up to 25 years and renewable for periods of 10 years on approval (2010 Law, Art. 33). The holder has the right to use surface rights and must make compensation therefor. The holder must enter into a community agreement, complete an EIA and a closure plan, within one year of the grant and must also commence mining within a further two years. The language is potentially problematic as the failure to adhere to certain conditions can give rise to termination (2010 Law, Art. 97).

 

Transfers are only permitted on consent of the Board (2010 Law, Art. 65).

DEVELOPMENT CONSIDERATIONS

 In order to obtain a mining licence, one is required to:

 

  • File a feasibility study (2010 Law, Art. 25) prior to obtaining the licence;

 

And then, after obtaining the licence, and within a further one year period:

 

  • sign a community agreement in the form set out in the regulations (2010 Law, Art. 30.2);

 

  • prepare a rehabilitation and closure plan and obtain the approval of the committee of rehabilitation and closure as prescribed in the regulation (2010 Law, Art. 30.3);

 

  • prepare a plan for an environmental impact assessment as prescribed in the regulation and obtain the approval of the same from the Environment Protection Authority (2010 Law, Art. 30.4).

 

The holder of the licence is entitled to use surface rights in respect of its operations provided compensation is made.

ENVIRONMENT REGULATIONS

See Yemen Environmental Regulation.

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Environmental Overview Commentary plus sign

YEMEN ENVIRONMENTAL REGULATION

GENERAL

Yemen, officially known as The Republic of Yemen, is an Arab country in Southwest Asia, which occupies the south-western to southern end of the Arabian Peninsula. Yemen has a coastline of about 2,000 km (1,200 mi) and is bordered by Saudi Arabia to the north, the Red Sea to the west, the Gulf of Aden and the Arabian Sea to the south, and Oman to the east. Vegetation is sparse along the coast, but in the highlands and wadis (valleys) it is plentiful. Acacia, date palm and many types of fruit trees are common. Wild mammals in the region include the baboon, gazelle, leopard and mountain hare. Yemen is also home to more than 27,000 varieties of insects and over 600 specimens of flowering plants. Overgrazing, erosion of poorly maintained agricultural terraces, deforestation and hunting are the major environmental threats.

PRINCIPAL LEGISLATION AND REGULATOR

The principal law is the Environment Protection Law of 1995 (EPL), which provides the framework for the conduct of environmental impact assessments; the prevention of pollution of air, land and water; the handling of toxic and dangerous chemicals; waste management; and liability and sanctions for environmental damage. The law affirms the right of every individual to live in a healthy and balanced environment (EPL, Art. 4). EPL, Article 8 indicates that there is a prohibition on issuing an environmental licence for a new project that damages or pollutes the environment or causes its deterioration. Many of the provisions of the EPL are set out in general terms only and require further elaboration by secondary legislation in order to have full effect. In recent years, the Yemeni authorities have been working on a set of environmental regulations to support the EPL, although at the present time progress with these appears to be stalled.

The main responsibility for wildlife conservation and environmental protection lies with the Environment Protection Authority (Council). With regard to mining projects, the Ministry of Oil and Minerals coordinates with the Council in respect of the permitting of a given project. Other authorities with environmental responsibilities include: the Ministry of Agriculture and Water Resources which is responsible for wildlife conservation and fisheries, and the General Directorate for Forests and Range within the ministry, who is responsible for forestry.

EIA PROCESS AND OTHER PERMITS

Article 35 of the EPL indicates that it is not permissible for any competent body to give permission or a license to establish, operate or modify projects or establishments that affect and damage the environment, contribute to its deterioration or that cause pollution or any adverse effect or harm to human health or other living organisms, except in accordance with the standards, criteria, specifications or conditions that are determined and specified by the Council. Article 36 requires the preparation of an environmental impact assessment (EIA) for any project or establishment that will “potentially” cause an adverse environmental impact or damage.

The EPL suggests that mining operations are projects requiring an EIA (EPL, Art. 37(1)(a)), although it is unclear as to whether an environmental licence is required in respect of exploration operations. Given that the Law Concerning Mines and Quarries of 2010 (No. 22 of 2010) requires an EIA only in respect of mining operations, it may be fair to assume that exploration activities do not fall within the purview of the law (unlike many of Yemen’s neighbouring countries). The EPL requires a project owner to pay compensation for any damages from operations (EPL, Art. 41). Environmental bonds may be required under EPL, Article 81.

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