Cameroon | 2017.02.02
NEW MINING CODE ENACTED

With the recent release of Law No. 2016/017, of 14 December 2016, Cameroon enacted a new Mining Code.

 

The new Mining Code, which repeals the 2001 Code (as amended in 2010), sets forth the legal framework governing the reconnaissance, prospecting, exploration, mining, possession, transportation, processing and marketing of mineral resources. However, certain minerals are excluded from the Code’s scope of application, notably surface waters, liquid and gaseous hydrocarbons, and bituminous schists, as they are subject to specific regimes.

 

Although some of the principles and rules defined in the new Mining Code still require implementation in future regulations, it is fair to conclude that this statute brings about a considerable revamping of the mining legal framework in force hitherto. Some of its most relevant features and innovations comprise the following: 

 

  • Transparency: holders of mineral rights are required to comply with the international commitments undertaken by the Republic of Cameroon – such as the Kimberly Process and the Extractive Industries Transparency Initiative –, and shall have to declare all payments made to the State;
  • Environment: the granting of mineral rights and quarry licenses shall, with some very limited exceptions, be subject to a prior environmental and social impact study;
  • Local Content: preference is to be given to the hiring of Cameroonian personnel, with 90% of the positions not requiring special skills being reserved for nationals. Preference for the engagement of national subcontractors, service providers and suppliers will also apply, and mining companies will have to make a contribution to programs and initiatives for the promotion of local development in an amount ranging from 0.5% to 1% of the total turnover before taxes;
  • Mining Policy Implementation Funds: the “Mining Sector Development Fund”, the “Mining Site and Quarry Restoration, Rehabilitation and Closure Fund”, and the “Special Local Capacity Building Account” were set up. Although their actual configuration and regimes will only be detailed in specific regulations at a later date, the latter of these funds is to be funded by the aforementioned local development contribution to be paid by mining companies;
  • Tax and Customs Incentives: both the holders of prospecting and exploration rights and the holders of mining rights may benefit from a range of tax and customs incentives, tailored to each of the stages of the mineral projects;
  • Stability of the Tax and Customs Regime: for specific periods of time which vary depending on the type of mineral title, the title holders are guaranteed that the tax and customs regime applicable to them as at the date of the award of the mineral rights (including the applicable tax and customs incentives) will remain unchanged.

 

In terms of interim provisions, it is noteworthy that the mineral titles, licenses and permits granted prior to the effective date of the new Mining Code shall remain in force until the expiry of their validity period. Notwithstanding, the holders of pre-existing titles, licenses and permits shall, within 6 months of the date of enactment of the new Mining Code, ensure compliance with the (new) geometry to which said titles, licenses and permits are now subject.

 

Should you wish to receive a copy of the 2016 Mining Code and/or a more detailed overview or analysis thereof, please reach out to us via the below contact details.

mirandaalliance-alert@mirandaalliance.com

 

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