1st Edition

Mineral Mining in Africa Legal and Fiscal Regimes

By Evaristus Oshionebo Copyright 2021
    378 Pages
    by Routledge

    378 Pages
    by Routledge

    Continue Shopping

    Africa is endowed with commercially viable quantities of several minerals and metals, and, more than ever before, African countries wish to harness their mineral resources for their economic development. The African mining sector has witnessed a revolution in terms of new mining codes and amendments to extant mining codes, which are designed to achieve a multitude of objectives, including the assertion of greater control over exploitation of mineral resources; optimization of resource royalties and taxes; promotion of equity participation in mining projects; enhancement of indigenization in the form of domestic participation in mineral production and local content requirements; value addition and beneficiation in terms of domestic processing of raw mineral ores and metals in Africa; and the promotion of sustainable practices in the mining sector.

    This book analyzes the legal and fiscal frameworks for hard-rock mining in several African countries including Botswana, Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Kenya, Namibia, Nigeria, Liberia, Tanzania, Sierra Leone, South Africa, South Sudan, Zambia, and Zimbabwe, with reference to other resource-rich countries. It engages in a comparative analysis of mining statutes in Africa with regard to topics such as the acquisition of mineral rights; types of mineral rights; the nature of mineral rights; the rights and obligations of mineral right holders; security of mineral tenure; surface rights; fiscal regimes including royalty and tax regimes; resource nationalism in the mining sector; management and utilization of mining revenues including benefit-sharing arrangements between mining companies and host communities; environmental stewardship; and sustainable exploitation of mineral resources.

    List of tables





    1 Overview of mining in Africa

    1 Introduction

    1.1 History of mining in Africa

    1.2 Ownership of minerals

    2 Generations of mining statutes in Africa

    2.1 ‘Nationalist’ and ‘statist’ statutes of the post-colonial era

    2.2 Economic liberalization statutes

    2.3 Development-oriented statutes of the post-liberal era

    3 Economic significance of mining in Africa

    4 Aim and structure of the book


    2 Types of mineral rights in Africa

    1 Introduction

    2 Reconnaissance licence

    2.1 Rights conferred by a reconnaissance licence

    2.2 Terms and conditions of a reconnaissance licence

    2.3 Duration and renewal of a reconnaissance licence

    3 Prospecting licence

    3.1 Rights conferred by a prospecting licence

    3.2 Terms and conditions of a prospecting licence

    3.3 Duration and renewal of a prospecting licence

    3.4 Relinquishment of land upon renewal of a prospecting licence

    4 Exploration licence

    4.1 Rights conferred by an exploration licence

    4.2 Terms and conditions of an exploration licence

    4.3 Record-keeping and reporting obligations

    4.4 Duration and renewal of an exploration licence

    4.5 Relinquishment of land upon renewal of an exploration licence

    5 Retention licence

    5.1 Rights conferred by a retention licence

    5.2 Terms and conditions of a retention licence

    5.3 Duration and renewal of a retention licence

    6 Mining lease

    6.1 Rights conferred by a mining lease

    6.2 Standard terms and conditions of a mining lease

    6.3 Duration, renewal, and amendment of a mining lease

    7 Small-scale mining lease

    7.1 Rights conferred by a small-scale mining lease

    7.2 Terms and conditions of a small-scale mining lease

    7.3 Duration and renewal of a small-scale mining lease

    8 Common features of mineral rights

    8.1 Transferability of mineral rights

    8.2 Surface rights ancillary to mineral rights

    8.3 Priority of mining operations over other uses of land

    9 Conclusion


    3 Acquisition of mineral rights

    1 Introduction

    2 Land available for mining operations

    3 Requirements for grant of mineral rights

    3.1 Eligibility requirements

    3.2 Indigenization and domestic incorporation requirements

    3.3 Financial and technical competency

    4 Methods of acquisition of mineral rights

    4.1 Discretionary grant

    4.2 Public auction of mineral rights

    4.3 Mergers and takeover transactions

    5 Registration of mineral rights

    6 An assessment of the mineral rights acquisition process

    6.1 Paucity of domestic and indigenous participation

    6.2 Rarity of public auctions

    6.3 Consultation with host communities

    7 Conclusion


    4 Security of mineral tenure

    1 Introduction

    2 Sources of mineral rights

    2.1 Statute-based mineral rights

    2.2 Contract-based mineral rights

    3 Time of vesting of mineral rights

    4 The legal nature of mineral rights

    4.1 Overview of common law and statutory regimes

    4.2 Statutory regimes on the nature of mineral rights in Africa

    5 Security of mineral tenure

    5.1 Curtailment of ministerial power and discretion

    5.2 Convertibility and transition of mineral rights

    5.3 Retention of mineral rights

    5.4 Statutory and contractual guarantees regarding security of tenure

    5.5 Constitutional guarantees regarding protection of property

    5.6 Legal safeguards against arbitrary revocation of mineral rights

    6 Conclusion


    5 Fiscal regimes for mineral exploitation

    1 Introduction

    2 Royalty and tax regimes

    2.1 Royalties

    2.2 Taxes

    3 Case studies of mineral royalties and taxes

    3.1 Botswana

    3.2 Ghana

    3.3 Nigeria

    3.4 South Africa

    3.5 Zambia

    4 Fiscal incentives and allowances

    4.1 Investment allowances, tax credits, and loss deductions

    4.2 Tax holidays, deferment of royalty, and other exemptions

    4.3 Import duty exemptions and currency transfer guarantees

    4.4 Allowances regarding environmental rehabilitation

    5 An appraisal of the fiscal regimes

    5.1 Disconnect between mining revenues and the value of minerals

    5.2 Abuse of the fiscal regimes through tax-avoidance schemes

    5.3 Revenue costs of the generous fiscal regimes

    5.4 Lack of institutional capacity to implement royalty and tax regimes

    6 Anti-tax-avoidance rules

    6.1 Suspicious and fictitious transactions

    6.2 The arm’s-length standard

    6.3 Exclusivity standard

    6.4 Ring-fencing rules

    6.5 Contractual guarantees regarding payment of royalties and taxes

    7 Ineffectiveness of anti-tax-avoidance rules in Africa

    8 Conclusion


    6 Legal stabilization of mining investments

    1 Introduction

    2 Stabilization regimes

    2.1 Contract-based stabilization clauses

    2.2 Statute-based stabilization clauses

    2.3 Treaty-based stabilization regimes

    2.4 Consequences of treaty-based stabilization regimes

    3 Drivers of stabilization regimes in Africa

    4 Deleterious effects of stabilization regimes

    5 Reformation of stabilization regimes in Africa

    5.1 Limiting the scope and duration of stabilization regimes

    5.2 Periodic renegotiation of stabilization regimes

    5.3 Independent oversight of stabilization regimes

    6 Why Africa should desist from incessant grant of stabilization clauses

    7 Conclusion


    7 Resource Nationalism in the African Mining Industry

    1 Introduction

    2 Manifestations of resource nationalism

    2.1 Fiscal reforms

    2.2 Termination of mineral rights

    2.3 Indigenization

    2.4 State participation in mining projects

    2.5 Declaration of minerals as ‘strategic national assets’

    2.6 Renegotiation of mining contracts

    2.7 Beneficiation

    2.8 Local content requirements

    3 Drivers of resource nationalism in Africa

    3.1 Desire to exert greater control over mineral resources

    3.2 The developmental state

    3.3 Exploitative relationship between MNCs and African governments

    3.4 Redressing historical inequalities

    3.5 High commodity prices

    3.6 Domestic politics

    3.7 Competition for access to mineral resources

    4 Effectiveness of resource nationalism in Africa

    5 Resource nationalism and foreign direct investment

    6 Conclusion


    8 Management and utilization of mining revenues

    1 Introduction

    2 Revenue management agencies and institutions

    2.1 Public agencies and state-owned mining companies

    2.2 Semi-autonomous bodies

    3 An appraisal of mineral development funds in Africa

    4 Towards the prudent management of mining revenues

    4.1 Mandatory transparency, accountability, and oversight regimes

    4.2 Capacity-building

    5 Benefit-sharing schemes

    5.1 Community development agreements

    5.2 Company-funded foundations, trusts, and funds

    5.3 Equity participation by host communities

    6 Conclusion


    9 Mining and the environment

    1 Introduction

    2 Complicity of mining companies in environmental and human rights violations

    3 Environmental regulation of mining operations

    3.1 Environmental standards

    3.2 Environmental rights as human rights

    3.3 Mine closure and rehabilitation standards

    4 Non-enforcement of environmental standards

    4.1 Incapacity of regulatory agencies

    5 Citizen enforcement of environmental standards

    6 Liability of parent companies for the wrongful actions of subsidiaries

    6.1 Piercing the corporate veil

    6.2 Parent company’s duty of care

    7 Conclusion


    10 Conclusion

    1 Towards pragmatic mining regimes in Africa

    1.1 Inventory of mineral resources

    1.2 Capacity-building

    1.3 Transparency and accountability

    1.4 Responsive fiscal and tax reforms

    1.5 A clear contractual framework for mineral exploitation

    2 A mutually beneficial relationship




    Evaristus Oshionebo is Professor in the Faculty of Law, University of Calgary, Canada.