21.3(a) Example:

Article [_]

(1) In the case of discovery of a mineral not included in the license granted, the licensee shall:

(a) Secure the area where the mineral was discovered, not allowing third parties to access it without the permission of the Licensor.

(b) Mark the area in the way established by the governing agency, to identify the site.

(c) Immediately stop the exploitation of the mineral not covered by the license granted.

Annotation

This suggested provision is designed to specifically address the on-site procedures in case a mineral not covered by a valid license is found. The reporting duties are addressed in a different provision. The purpose of this rule is avoid the unlawful appropriation of minerals from the licensee or third parties, and the preservation of the site to facilitate the evaluation of the discovery by the relevant regulating entity.

21.3(b) Example 1:

Article[_]

(1) If in the course of exercising his rights the holder of a mining license discovers any other mineral to which such license does not relate, he shall, within thirty calendar days after such discovery, notify the [Regulating Entity] giving particulars of the deposits or the mineral discovered, and the site and circumstances of the discovery, and may apply to the [Regulating Entity] to have the mining of such deposits or such mineral included in his mining license, giving in the application a proposed program of mining operations in respect of that discovery.

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision shows the above-named important division between notification and amendment. The licensee may apply for an extension apart from the notification of the discovery itself, which shall be an obligation in all cases. If the discovering licensee does not apply for an extension, a third party can apply for it, and the regulating agency can grant it, if that is convenient for the State’s interests.

21.3(b) Example 2:

Article [_]

(1) If in the course of exercising his or her rights under a mining lease the holder of the mining lease discovers any mineral for which the lease does not relate, he or she shall, within thirty days after the discovery, notify the [Regulating Entity] of the discovery, giving particulars of the mineral discovered and the site and circumstances of the discovery; and the holder of the lease may apply to the [Regulating Entity] to have the mining of such mineral included in his or her mining lease, giving in his or her application a proposed program of mining operations in respect of the discovery.

(2) Where the holder of a mining lease does not wish to develop a newly discovered mineral or minerals, and it is in the national interest to do so, the [Regulating Entity] may grant a mineral right under this Act to a third party subject to the reasonable rights of the holder.

Annotation

Drawn from Uganda’s mining law (2003), this provision, in addition to distinguishing between a notification obligation and opportunity to amend an existing license to include the new discovery, addresses the case in which the discovering licensee does not wish to develop the newly discovered mineral. In such case and if it is in the public interest, the mining right can be granted to a third party.

Since this option could create risks of conflict arising from overlapping mining areas between the initial rights holder and the second rights holder, the State should ensure reasonable accommodation for the first licensee.

21.3(c) Example 1:

Article [_]

(1)The provisions of this Act relating to exploration, and mining of minerals shall apply to radioactive minerals with such modifications as are provided in this Part and as may be prescribed in the Regulations

(2) Where any radioactive mineral is discovered in the course of exercising any right under this Act or any authority under any other enactment, the holder of the mineral right or such other authority shall immediately notify the [Regulating Entity], but in any case, not later than seven calendar days after the discovery.

(3) Where any radioactive mineral is discovered on any land other than land subject to a mineral right, the owner or lawful occupier of the land shall as soon after he is aware of such discovery notify the [Regulating Entity].

(4) The holder of a mineral right in respect of a radioactive mineral shall within the first week of every month, furnish the [Regulating Entity] with a report, in writing, of the exploration and mining operations conducted by him in the immediately preceding month.

(5) No person shall explore for or mine or treat or possess or export or import or otherwise dispose of any radioactive mineral except under and in accordance with the terms and conditions of a permit granted by the [Regulating Entity].

(6) A permit issued under subsection (5) shall be in such form and shall be subject to the payment of such fee as the [Regulating Entity] may prescribe.

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision indicates the inclusion of the mining of radioactive materials within the scope of the mining law but provides for higher scrutiny of mining activities as it relates to the radioactive materials. This includes immediate notification of such discovery, the strictly regulated reporting requirements of such mining operations and the restrictions of export and disposal of such minerals.

For a clearer regime, it is necessary to include special provisions on the process for obtaining a license to exploit such radioactive materials, more frequent inspection of the mining facilities, and restrictions to the commerce of such minerals.

Finally, it is advisable to include specific penalties for offenses and breaches related specifically to this activity as such offenses may potentially have greater negative impact than offenses related to non-radioactive materials.

21.3(c) Example 2:

Article [_]

(1) If required for the safety of the public, the President of the Republic may, by Decree, and on the recommendation of the [the Regulatory Authority], in accordance with the opinion of the [Geology Division], declare a mineral substance to be "reserved" and hence subject to special rules.

(2) A Decree which classifies a mineral substance as a "reserved" shall specify the rules and provisions which the substance is subject to. The declaration shall be published in the [Official Gazette].

(3) Thorium and uranium ores and, in general, all radioactive ores shall fall under the rules for reserved materials provided for in the above paragraphs of the present Article.

Annotation

Drawn from DRC’s mining law (2002), this provision creates a “reserved class” of minerals based on safety needs. These minerals are subject to specific rules that are enumerated by special decree of the President. This provision also makes a point of naming specific minerals (uranium, thorium, and all radioactive minerals) as automatically being placed in this class of mineral substances.

24.1 Example 1:

Article [­_]

(1) Any natural person or legal entity with the required technical and financial ability to carry out reconnaissance surveys for indicators, and prospecting for mining and quarry materials, may carry out said activities under the terms of the present Act. A Decree of the [President] shall specify what is meant by "technical and financial capacities."

(2) Persons or companies which are subject to international sanctions or criminal investigations related to fraud, corruption or money laundering may not obtain mining or quarrying titles.

(3) No natural person may obtain or hold a mining title or permit in the event that:

(a) they suffer from a legal disability preventing them from acting in their own name; or

(b) they have been imprisoned for violating the provisions of the present [Code][Act][Law] and its implementing regulations.

Annotation

Drawn from Guinea’s mining law (2011), this article recognizes both individuals and entities, regardless of nationality or place of formation, as eligible to engage in prospecting/reconnaissance activities under the conditions set forth in the law. This is a very broad provision. It also requires, however, that the individual or entity have the necessary technical and financial capacity as a condition of eligibility for prospecting/reconnaissance rights. The article delegates to the President of the Republic the authority to specify what is intended by the term “technical and financial capacity”. Thus, in this example, the legislature establishes a very broad criteria of eligibility for authorization of prospecting/reconnaissance activity, but enables the executive to limit eligibility based on technical and financial capacity criteria that the executive is authorized to establish.

The article also specifies additional types of persons not eligible for any mineral rights, including:

• Persons subject to international sanctions or criminal investigation for fraud, corruption or money laundering,
• Any individual whose status is incompatible with the exercise of commercial activities, such as public officials, and
• Any individual condemned and sentenced to prison for violation of any provisions of the Mining Code and its implementing decrees.

24.2 Example 2:

Article [_]

A qualified applicant for a Prospecting/Reconnaissance Permit is-

(a) a citizen of [Country] with legal capacity and who has not been convicted of a

criminal offence; or

(b) a body corporate duly incorporated under the [Companies Act]; or

(c) a Mining Co-operative.

Article [_]

(1) The following persons shall not be eligible to obtain or hold licences set forth in this [Law][Act][Code]:

(a) The President, Vice-Presidents, Ministers, Chief Justice and members of Supreme Court, Attorney General, members of the National Assembly, Heads and members of the Independent Government Commissions, Governor of the Central Bank and General Director of National Directorate of Security, Provincial Governors, Mayors, and General Directors of the Government Independent Agencies, advisors, experts and Deputy Ministers of the [Mining Regulating Authority] and their relatives up to the second degree of consanguinity or by marriage.

(b) Judges, Prosecutors, Members of Provincial and District Councils, any Employee of the Ministry [in charge of Defence] or Ministry [in charge of Interior Affairs] or of the General Directorate of National Security, advisors, as well as experts and staff of the Commission, stipulated in [relevant article] of this [Law][Code][Act] (describing the membership of the Commission that reviews all licencing decisions and mining agreements, among other things);

(c) Any person who has been declared bankrupt and who continues to be bankrupt under the laws of [Country];

(d) Any person whose licence has been prematurely revoked, based on justifiable reasons, by the [Regulating Authority] prior to the expiry of the licence term.

(e) Companies in which the listed figures in (a) above, have obtained or will imminently obtain direct or indirect benefits;

(f) A natural person who has been convicted by a court of competent jurisdiction to more than ten (10) years in prison or has been convicted of administrative corruption and who has completed his or her prison term but has not yet had his or her prestige restored;

(g) Any legal person which is under a liquidation process, unless the liquidation is for the restructuring of such legal person;

(h) Any legal person that is subject to an order of dissolution issued by a court of competent jurisdiction;

(i) Any legal person in which one or more of its major shareholders, members of the executive board or members of its board of directors would be legally disqualified.

(j) Where one or more major shareholders of a legal person has been convicted of violation of the provisions of this [Law][Act][Code]; and/or

(k) Any major shareholder of a legal person or a member of its executive board is an existing employee of the [Petroleum Regulating Authority].

(2) Any person whose licence has been revoked, may not re-apply for all or part of its revoked Licence Areas for two years from the date of revocation;

(3) A major share for the purpose of this [Law][Act][Code] means ten percent or more of the total shares of a company.

(4) Any person stipulated in subsections (a) and (b) of Paragraph (1) of this Article may obtain a Licence or Contract provided for in this [Law][Act][Code] five years after termination of their term in office.

Annotation

Drawn from Nigeria’s Mining Law (2007), the first article in this example clearly and concisely states which Nigerian nationals, locally formed companies and mining cooperatives are eligible for what is called a reconnaissance permit under Nigerian law. The article applies only to the reconnaissance permit and does not mix in considerations other than eligibility. It therefore provides great clarity.

Drawn from Afghanistan’s mining law (2014), the second Article in this example presents a very specific and comprehensive list of persons and companies prohibited from obtaining and holding any type of mineral licence. In some cases the prohibition is unlimited. In other cases the prohibition is removed after a specified time period. Drafters should consider whether transparency and corruption concerns warrant providing such a detailed list of persons and entities that are not eligible for mineral licences. In some countries, the prohibitions against licence holding by public officials are set forth in other laws. In such cases, the issue is more likely to be one of enforcement rather than drafting. Even in those cases it may be desirable to repeat such prohibitions in the mining law so that the application process is designed to screen out persons prohibited from obtaining mineral licences.

24.2 Example 1:

Article [_]

(1) An application for the grant of a prospecting/reconnaissance licence shall be submitted to the Mining Cadastre Office in the prescribed form and-

(a) shall contain the registered name and place of incorporation of the company, its certificate of incorporation and certified copy of its memorandum and articles of association, the names and nationalities of its directors and the name of every shareholder who is the beneficial owner of five percent or more of the issued share capital;

(b) shall contain the company profile and history of reconnaissance and exploration operations in Sierra Leone and elsewhere;

(c) shall identify the name and qualifications of the person responsible for supervising the proposed programme of reconnaissance operations;

(d) shall be accompanied by a plan of the proposed reconnaissance licence area over which the licence is sought, drawn in such a manner and showing such particulars as prescribed;

(e) shall be accompanied by a description of the contiguous blocks comprising the proposed reconnaissance licence area, identified in the prescribed manner, which shall be considered definitive should there be any discrepancy with the plan submitted under paragraph (d);

(f) shall be accompanied by a statement giving particulars of the technical and financial resources available to the applicant, and a certified copy of its audited accounts for the year immediately preceding the application;

(g) shall be accompanied by a proposed programme of reconnaissance operations as prescribed setting out in detail the work intended over the next twelve month period together with the estimated cost, with details of the equipment expected to be used in connection with it and the names and particulars of the persons to be responsible for the conduct thereof;

(h) shall state the period applied for which shall be no longer than one year;

(i) shall give details of any mineral right held within Sierra Leone by the applicant or by any person controlling, controlled by or under joint or common control with the applicant;

(j) shall provide details of any significant adverse effects which the carrying out of the programme of reconnaissance operations would be likely to have on the environment and on any monument or relic in the proposed reconnaissance area and an estimate of the cost of combating such adverse effects;

(k) shall give or be accompanied by a statement giving particulars of the applicant’s proposals with regard to the employment of [national] citizens; and

(l) may set out any other matter which the applicant wishes the [Regulating Authority] to consider.

Annotation

Drawn from the mining law of Sierra Leone (2009), this article requires detailed information about:

1) the applicant company, its directors and principal shareholders;

2) the company profile and its history of prior reconnaissance and exploration activities;

3) the supervisor of its proposed activities;

4) a map (plan) of the proposed licence area;

5) a description of the cadastral blocks comprising the proposed licence area;

6) a statement of the applicant’s technical and financial resources, accompanied by a certified copy of the company’s audited financial statements for the prior year;

7) a proposed program of reconnaissance operations for the next year, including cost, equipment to be used, and particulars of the responsible individuals;

8) the requested licence term (maximum of one year);

9) particulars of any mineral right held by the company or by any affiliate of the company;

10) any significant adverse effects that the reconnaissance activity may have on the environment, any monument or relic in the proposed licence area, with an estimate of the cost of “combating such effects”;

11) proposals regarding the employment of [national] citizens.

This level of information required in an application for a prospecting/reconnaissance licence is high by international and regional standards, particularly for a non-exclusive prospecting/reconnaissance licence as is the case in Sierra Leone. The application requirement indicates that Sierra Leone intends to control access to mineral rights and strictly limit such access to qualified companies that demonstrate an ability to perform serious work programs.

The prospecting/reconnaissance licence under the mining law of Sierra Leone is non-exclusive, does not provide the holder with any priority for obtaining an exploration licence, and is not a prerequisite for obtaining an exploration licence. Given the extent of the application requirement for a prospecting/reconnaissance licence that grants no exclusive rights or priority, it is not surprising that as of September 29, 2016 only 7 such licences have been issued under the mining law of Sierra Leone; all have expired; and none have been issued since 2012. This indicates that the rights provided by the prospecting/reconnaissance permit under Sierra Leone’s mining law are viewed as insufficient for applicants to make the commitments required by the application requirements. These application requirements would be more appropriate for a prospecting/reconnaissance licence that grants an exclusive right over the licence area and the exclusive right to apply for an exploration or mining licence within that area during the term of the prospecting/reconnaissance licence.

24.2 Example 2:

Article [_]

(1) Applications for prospecting permits as provided for in Articles [_] and [_] (on the authority to grant a prospecting permit and its scope) above are to be sent to [the regulatory authority] and must include:

(a) an application, duly signed by the managing director of the company requesting the mining title;
(b) the company's constitutional documents;
(c) the composition of the management team and the positions of its members;
(d) the comprehensive technical programme:
(e) the details of the financial outlay per item;
(f) the detailed business card for the company, along with the latest balance sheet for the financial year for said company:
(g) what the company requires locally.

(2) An application for a prospecting permit is to be drawn up in two original copies, one of which must be stamped, in the case of a general application, and in four original copies, two of which must be stamped, if it relates to substances in categories [_] as provided for in Article [_] (on the classification of mineral substances). It shall indicate the extent of the area and the minerals applied for.

Annotation

Drawn from the Republic of Congo’s mining law (2005), this provision requires information about the composition and the quality of the members of the applicant’s leadership team, a comprehensive description of the intended technical program and a detailed description of the planned financial effort. As in Sierra Leone, the prospecting/reconnaissance licence available under the mining law of the Congo is non-exclusive and does not provide the holder with any priority for the grant of an exploration licence. That is the case generally in African countries that offer reconnaissance licences

Countries that wish to strictly limit access to prospecting/reconnaissance rights in order to ensure that they are only granted to qualified applicants who can be expected to carry out a serious work program - while respecting the natural and social environment and reporting accurate results of their work - should consider whether the scope of the prospecting/reconnaissance rights are commensurate with the application requirements. If the rights are of very limited value, they are likely to be ignored and bypassed.

24.3 Example 1:

Article [_]

A decision of the [Regulating Authority] denying the issuance of a prospecting/reconnaissance licence shall not be subject to reconsideration or appeal.

Annotation

If the mining law provides for the licencing of prospecting/reconnaissance activity but does not require that the applicant for an exploration licence (for the next phase of mineral resource development activity) have previously carried out work on the area under such a licence as a condition for obtaining an exploration licence, and does not grant the prospecting/reconnaissance licence holder an exclusive right to obtain an exploration licence for the subject area (in other words, if the law permits an applicant to forego the prospecting/reconnaissance phase without prejudice) then for the sake of administrative convenience and efficiency it may be reasonable to provide that decisions to reject applications for prospecting/reconnaissance licences are not subject to reconsideration or appeal, as in this example.

24.3 Example 2:

Article [_]

(1) A decision of the [Regulating Authority] denying the issuance of a prospecting/reconnaissance licence shall state the reasons for the decision. The party whose application for a prospecting/reconnaissance licence has been rejected may, within ten business days of receipt of notice of the decision, submit to the [Regulating Authority] a request for reconsideration of the decision, in writing, together with relevant documentation and arguments in writing.

(2) The [Regulating Authority] shall issue its decision on reconsideration, stating the reasons therefore, within thirty (30) days of the filing of a timely request for reconsideration.

(3) If the decision on reconsideration affirms the initial decision of denial, the applicant may appeal the decision on reconsideration in writing together with relevant documentation, to the [Administrative Reviewer] within fifteen (15) business days of receiving such decision.

(4) The [Administrative Reviewer] shall issue his or her decision on appeal in writing, stating the reasons therefore; and said decision shall be notified to the applicant within thirty (30) days of the filing of a timely appeal.

(5) If the decision of the [Administrative Reviewer] on appeal affirms the initial decision of denial, the applicant may, within 45 days of receiving notification of the decision on appeal, apply to the [Judicial Reviewer] for review of the decision and seek such remedy as the [Judicial Reviewer] is empowered to grant.

(6) The filing of a request for reconsideration or appeal of the initial decision of denial does not suspend the administrative decision denying the application unless so ordered by the [Regulating Authority] or the [Administrative Reviewer], as the case may be.

Annotation

If the mining law provides for a prospecting/reconnaissance licence as an exclusive right, and also provides that only the holder of that right is entitled to subsequently request and obtain a licence for the next phase of mineral resource development activity (e.g., exploration), then the denial of the prospecting/reconnaissance constitutes a barrier to entry into mineral resource development activity.

In such cases, for considerations of accountability, transparency, protection against corruption, and due process, best practice would require (1) reasoned written decisions for denials of applications for prospecting/reconnaissance licences, (2) an opportunity for reconsideration by the regulatory authority, (3) an appeal to a superior administrative authority, and (4) a judicial appeal of the administrative decision on appeal.

The example of such a best practice provision presented here is inspired by provisions of the mining laws of Uganda (2003) and South Africa (2002).

24.4 Example 1:

Article [_]

A prospecting/reconnaissance licence area shall not exceed ten thousand (10,000) square kilometres.

Annotation

Drawn from Sierra Leone’s mining law (2009), this example sets a very large limit on the size of a reconnaissance licence area. The reconnaissance licence is non-exclusive under the mining law of Sierra Leone.

24.4 Example 2:

Article [_]

(1) The area of land in respect of which a reconnaissance licence may be granted shall be a block or any number not more than five thousand contiguous blocks each having a side in common with at least one other block the subject of the application.

(2) For purpose of this [Act][Code][Law], the surface of the Earth shall be deemed to be divided in accordance with the co-ordinates represented in the official maps of [Country] held at the [Regulating Authority] at a scale of 1:50,000,

(a) by the meridian of Greenwich and by meridians that are at a distance from that meridian of 15 or a multiple of 15 seconds of longitude,

(b) by the equator and by parallels of latitude that are at a distance from the equator of 15 or a multiple of 15 seconds of latitude, into sections (“geometric sections”) each of which is bounded,

(c) by portions of those 2 meridians that are at a distance from each other of 15 seconds of longitude, and

(d) by portions of 2 of those parallels of latitude that are at a distance from each other of 15 seconds of latitude.

(3) For purposes of this [Act][Code][Law]

(a) a geometric section that is wholly within [Country] constitutes a block and

(b) where only part of a geometric section is within [Country], that part constitutes a block.

Annotation

Drawn from Ghana’s mining law (2006), the maximum area of a reconnaissance licence – which is exclusive under the Act (i.e. for the minerals to which the licence relates) – is defined in terms of blocks. The size of the blocks is in turn defined in the article of the law describing the Cadastral System for mining, by reference to the geographical projection to be used for identifying the borders of areas subject to mining rights. Thus, the area is a function of the defined cadastral grid system, which assures consistency among all licence areas.

24.5 Example 1:

Article [_]

(1) A Prospecting/Reconnaissance Permit shall be granted subject to the covenants and conditions that the holder thereof shall-

(a) carry out prospecting/reconnaissance on a non-exclusive basis;

(b) not engage in drilling, excavation or other sub-surface techniques;

(c) submit information and such periodical reports as may be prescribed by the [Regulating Authority];

(d) conduct reconnaissance activities in an environmentally and socially responsible manner as may be prescribed by the [Regulating Authority]; and

(e) compensate users of land for damage to land and property; and pay the fees prescribed by regulation.

(2) The activities allowed under a Prospecting/Reconnaissance Permit together with corresponding environmental and social obligations shall be further specified in regulations.

(3) Prospecting/Reconnaissance activity authorised by a Prospecting/Reconnaissance Permit shall not constitute a land use right for the purposes, objectives, rents, fees and requirements of the [Land Use Act].

Annotation

Drawn from Nigeria’s mining law (2007), this provision describes the obligations of the prospecting/reconnaissance permit holder. The article contemplates additional specifications in the regulation, contains a reporting requirement for licensees and prohibits any subsurface exploration, including drilling or excavation.

Paragraph 3 of the provision in the example essentially exempts the rights granted under the prospecting/reconnaissance licence from the requirements of the Land Use Act, because of the limited term and nature of the licence and the detailed provisions elsewhere in the mining law regarding notification, consent and compensation of land owners or lawful users in connection with licenced mineral activities. Those other detailed provisions on reconciling temporary access rights to land under a prospecting/reconnaissance licence with other existing and prospective lawful uses of the land are crucial to a successful outcome and the avoidance of conflict among competing land uses.

24.5 Example 2:

Article [_]

(1) No prospecting/reconnaissance licence shall authorise the holder of the licence to prospect over an area of land that is, or forms part of -

(a) An exploration area, a mining area, a retention area or a location licence area; or

(b) a forest reserve, game reserve, national park, or an urban centre, unless the holder of the prospecting/reconnaissance licence has first given notice to and obtained permission from the relevant authorities and complies with any conditions imposed by such authorities.

(2) Where it is necessary to fly over any land for the purpose of exercising any right under a prospecting/reconnaissance licence, nothing in this section shall prevent any such flight from being undertaken, provided it is in accordance with the provisions of [relevant section] (requiring compliance with other applicable laws) of this [Act][Code][Law].

(3) The holder of a prospecting/reconnaissance licence shall-

(a) subject to section (1) of this article, carry on prospecting/reconnaissance operations in accordance with the licence;

(b) submit to the [Regulating Authority] quarterly, or at such other intervals as may be prescribed, geological and financial reports and such other information as may be prescribed by regulation;

(c) report any mineral discovery to the [Regulating Authority]; and

(d) remove on or before the expiration of the prospecting/reconnaissance operations, any camps, temporary buildings or installations which may have been erected; and shall repair or make good any damage caused to the surface of the land to the satisfaction of the [Regulating Authority].

Annotation

Drawn from Uganda’s mining law (2003), this example covers most of the requirements that would be considered best practice, particularly with respect to (a) areas that are off-limits and (b) site restoration.

Licensees are obligated to remove all equipment and structures used during the prospecting/reconnaissance operation and repair any damage to the surface.

24.6 Example 1:

Article [_]

(1) Subject to this [Act][Code][Law] and the conditions of a reconnaissance licence granted under this [Act][Code][Law], the holder of a reconnaissance licence, his employees, servants or agents shall have the non-exclusive right to carry on reconnaissance operations in the reconnaissance area.

(2) For the purpose of exercising the right conferred under subsection (1), the holder of a reconnaissance licence may-

(a) enter on or fly over the reconnaissance area to carry on approved reconnaissance operations on a non-exclusive basis;

(b) take and remove specimens and samples from the reconnaissance area not exceeding such limit as is reasonably required for reconnaissance purposes;

(c) sell, with the prior written permission of the[Regulating Authority], mineral specimens and samples obtained from reconnaissance operations;

(d) subject to any law then in force, take timber and water from any lake or watercourse for the purposes of reconnaissance operations;

(e) erect camps and temporary buildings, including installations in any water forming part of the reconnaissance area provided that the erection of any camp or building under this paragraph shall not be construed as conferring any right, title or interest in the land;

(f) remove on or before the termination of the reconnaissance operations, any camps, temporary buildings or installations which the holder may have erected.

Annotation

Drawn from Sierra Leone’s mining law (2009), this example is a fairly standard statement of the rights of prospecting/reconnaissance licence holders. The rights in this case are limited to superficial investigation and reasonable sampling without the use of drilling or other invasive techniques (based on the definition of reconnaissance in the mining law).

The rights are non-exclusive and do not convey any priority to obtain an exploration licence for the subsequent phase of mineral resource development activity.

24.6 Example 2:

Article [_]

(1) Subject to this [Act][Code][Law] and the Regulations made under this [Act][Code][Law], a prospecting/reconnaissance licence confers on the holder and a person authorized, in accordance with this [Act][Code][Law] by the holder of the prospecting/reconnaissance licence, the exclusive right to carry on reconnaissance in the reconnaissance area for the minerals to which the reconnaissance licence relates and to conduct other ancillary or incidental activity.

(2) For the purposes of exercising the right conferred under subsection (1), a holder of a prospecting/reconnaissance licence and a person authorized in accordance with this [Act][Code][Law] by the holder of the prospecting/reconnaissance licence, may enter the reconnaissance area and erect camps or temporary buildings, subject to compliance with the provisions of this [Act][Code][Law].

(3) A holder of a prospecting/reconnaissance licence shall not engage in drilling or excavation.

(4) If a holder of a prospecting/reconnaissance licence applies for an exploration licence over all or part of the land and for a mineral which is the subject of the prospecting/reconnaissance licence and the holder has materially complied with the obligations imposed by this [Act][Code][Law] with respect to

(a) the holding of the licence, and

(b) the activities to be conducted under the licence,

The [Regulating Authority] shall within sixty days of the application, subject to the permits and other obligations required by law having been complied with, grant the applicant the exploration licence on the conditions that shall be specified in the licence.

Annotation

Drawn from Ghana’s mining law (2006), this example provides for the exclusive right to conduct reconnaissance with respect to specified minerals in the area that is covered by the licence. Drafters should consider clarifying whether the exclusivity conferred by the licence means (a) that no other mineral activity whatsoever by another person will be authorized within the licence area during the term of the licence or (b) no other mineral activity by another person with respect to the specified minerals will be authorized during the term of the licence, but mineral activity as to other minerals may be authorized.

This provision specifically empowers the licence holder to authorize another person to conduct the reconnaissance operations on behalf of the holder, provided the authorization is done in accordance with the mining law. Care should be taken in other articles to prescribe the qualifications of such third parties and the nature of their relationship with the licence holder.

The scope of the activity authorized by the prospecting/reconnaissance licence in the example – “reconnaissance ... and other ancillary or incidental activity” – is defined in the definition of “reconnaissance” in the “Interpretation” section of the mining law, which is the standard approach to drafting such provisions. The example adds the authorization to conduct ancillary and incidental activities to ensure inclusion of necessary related activities.

This provision includes one specific authorization as to land use and one specific prohibition as to drilling and excavation (for emphasis, even though those activities are excluded by the definition of reconnaissance). The land use authorization is typically qualified (in other articles) to require non-interference with existing land uses to the extent possible, consultation with other land users, and compensation for any damage or interference with other lawful uses of the land.

The provision in this example requires the Regulating Authority to grant the holder of a prospecting/reconnaissance licence an exploration licence if the holder has materially complied with the obligations under the Act. By granting the holder who is in compliance the right to obtain a licence for the subsequent phase of mineral resource development activity, this article provides security of tenure to the licence holder and thereby encourages investment in “greenfield” reconnaissance (for which the success rate is very low). The exclusive nature of the prospecting/reconnaissance licence and the security of tenure that it provides to the holder are considered by the mining industry to be valuable rights.

24.7 Example 1:

Article [_]

A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.

Annotation

Drawn from Sierra Leone’s mining law (2009), this is a typical term for a non-exclusive prospecting/reconnaissance licence that confers no right or priority to obtain an exploration licence.

24.7 Example 2:

Article [_]

A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.

Article [_]

A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.

Annotation

Drawn from Liberia’s mining law (2000), this provision provides a shorter term for an exclusive prospecting/reconnaissance right that includes the right to obtain an exploration licence for the subsequent phase of mineral resource development activity if the holder is in compliance with his/her/its obligations under the initial licence.

24.7 Example 3:

Article [_]

An Exclusive Permit to Reserve an Area confers on the holder an exclusive right to prospect and then, should the need arise, apply for a mining licence with a view to prospecting and/or carrying out mining operations, for one or more zones within the area covered by the permit.

Annotation

Drawn from Madagascar’s mining law (2005), this example provides for an AERP – which is an exclusive prospecting/reconnaissance licence with an exclusive right to apply for an exploration or exploitation licence during the term of the AERP – with a very short term of 3 months. Reconnaissance-type prospecting activities are authorized under the AERP. The purpose of this licence is primarily to enable prospective applicants to reserve an area while conducting due diligence on it, contacting the local authorities, initiating an environmental impact assessment and assembling an application for an exploration licence or a small scale mining licence (as spelled out in other omitted paragraphs of the article in the mining law of Madagascar).

To avoid abuses, this provision forbids renewals of AERPs and further restricts any applicant from obtaining a new AERP on any part of the surface area covered by the initial AERP for three years after it expires.

The short term of the AERP is thus inversely proportional to the robustness of the exclusive rights conferred. Because the AERP provides a very strong exclusive right, its term is kept very short in order to avoid tying up excessive areas of land that are not being explored.

24.8 Example 1:

Article [_]

(1) Subject to subsection (2), a reconnaissance licence may be extended once only and for a period not exceeding twelve months.

(2) Where, at least one month before the end of the extended period, or within the shorter period that the [Regulating Authority] may allow, the holder of a reconnaissance licence satisfies the [Regulating Authority] that delay by a government institution in the issuance of a permit or in carrying out a lawful activity has resulted in delay by the holder in the discharge of an obligation under the reconnaissance licence, the holder may apply in writing to the [Regulating Authority] for extension and the [Regulating Authority] may extend the term of the reconnaissance licence for a period not more than twelve months.

Annotation

Drawn from Ghana’s Mining law (2006), this article provides for one extension of the term of an exclusive reconnaissance licence for up to a year, and a conditional further extension up to a year if the condition is met. As noted above, Ghana seeks to encourage investment in greenfield investigation by granting the reconnaissance licence holder an exclusive right to obtain an exploration licence over all or part of the reconnaissance area if the holder is in compliance with the requirements of the licence.

24.8 Example 2:

Article [_]

The reconnaissance permission is valid for two years and is not renewable.

Annotation

Drawn from South Africa’s mining law (2002), this provision grants a relatively long initial term for the prospecting/reconnaissance licence that is non-exclusive and includes no priority or right to an exploration licence. The initial term in this example is equivalent to the usual one-year initial term and one-year renewal term found in other mining laws. Since the licence is not exclusive, its existence does not prevent the grant of another licence over the same area, nor should it inhibit other land uses in the area. Therefore, the longer initial term is benign.

24.9 Example 1:

Article [_]

(1) The [Regulating Authority], or any person authorised by the [Regulating Authority], may, in writing, order reconnaissance, exploration or mining operations to be temporarily suspended on an emergency basis, regardless of whether such operations are authorized by a mineral right, until such arrangements are made that are in the Regulating Authority’s opinion necessary to prevent danger to life, property or the environment or to comply with this [Act][Code][Law].

(2) The [Regulating Authority] may cancel or vary the terms of any temporary suspension order.

(3) The [Administrative Reviewer] shall have the power to confirm a temporary suspension order made by the [Regulating Authority] and may not delegate this power.

(4) A temporary suspension order shall lapse after twenty one days of its issuance, unless it is confirmed, in writing, by the [Administrative Reviewer].

(5) The [Administrative Reviewer] after consultation with the [Regulating Authority] may suspend a mineral right if the holder-

(a)fails to make any of the payments required by or under this [Act][Code][Law] on the date due;

(b)fails to meet any prescribed minimum annual programme of work or work expenditure requirement;

(c)grossly violates health and safety regulations or causes environmental harm;

(d)employs or makes use of child labourers;

(e)fails to submit reports required by this [Act][Code][Law];

(f)contravenes any of the provisions of this [Act][Code][Law] or the conditions of his mineral right or the provisions of any other enactment relating to mines and minerals;

(g)dies and his heir or successor in title is not qualified under this A[Act][Code][Law] to hold the mineral right, unless an application is received from the heir or successor within ninety days of the death to transfer the right to a third party who is so qualified and accepts all duties under the right;

(h)becomes an un-discharged bankrupt or becomes of unsound mind;

(i)makes any statement to the [Regulating Authority] in connection with his mineral right which he knows or ought to have known to be false;

(j)fails to substantially comply with the terms of a community development agreement when required by this [Act][Code][Law] to do so;

(k)for any reason becomes ineligible to apply for a mineral right under section [_] (listing the grounds for ineligibility).

(6) The [Administrative Reviewer] shall, before suspending any mineral right, give notice to the holder in such a manner as shall be prescribed and shall, in such a notice require the holder to remedy in not less than thirty calendar days any breach of the conditions of his mineral right.

Annotation

Drawn from Sierra Leone’s mining law (2009), this example provides for both (a) temporary suspensions of operations on an emergency basis for 21 days by the Regulating Authority and (b) a longer term suspension of mining rights on the non-compliance grounds stated in subsection 5 by the Administrative Reviewer, after consultation with the Advisory Board. The “Administrative Reviewer” as used in this example is the administrative authority that is the immediate superior of the Regulatory Authority in the administrative hierarchy. The provision in the example also gives the Administrative Reviewer the power to extend a temporary suspension by confirming it in writing.

In the case of a long-term suspension, the mining rights holder is provided with notice and an opportunity to cure the breach of obligation within thirty days before the suspension takes effect. The suspension may be the precursor to cancellation of the mineral right if the reason for the suspension is not corrected on a timely basis.

24.9 Example 2:

Article [_]

(1) Without prejudice to any other provisions of this [Act][Code][Law], upon the written approval of the [Regulating Authority], the Mining Cadastre Office may suspend a mining right for a period not exceeding sixty days if the holder-

(a)fails to make any payments required by or under this [Act][Code][Law] on the due date; or

(b)has breached any condition of the mining right;

(c)has contravened any provisions of this [Act][Code][Law];

(d)has failed to comply with any lawful order given In connection with his operations;

(e)makes any statement to the Mining Cadastre Office which he knows or ought to have known to be false; or

(f) for any reason becomes ineligible to apply for a mining right under the provisions of this [Act][Code][Law].

(2) A mining right shall only be suspended after thirty days’ notice of the intention to suspend the mining right containing in detail the grounds thereof is given to the holder and during the period fixed the holder has failed to remedy the breach or remove the grounds for suspension within the required period.

Annotation

Drawn from Nigeria’s mining law (2007), this example provides the grounds for suspension of mining rights which apply to reconnaissance permits because they are mining rights under the law. The mining law contains additional provisions on the suspension of certain mineral rights that do not apply to prospecting/reconnaissance licences.

Like the provision in the Sierra Leone law, this provision requires notice to the licence holder and an opportunity to cure the breach before the decision on suspension is taken. Only if the holder fails to take the necessary remedial action within the thirty day notice period is the licence suspended. In this example, the notice must be given by the Mining Cadastre; and the length of the suspension period is set in the law as 60 days in all of the cases listed.

Failure to remedy the ground for the suspension during the suspension period may lead to revocation of the licence.

24.10 Example 1:

Article [_]

(1) [A mineral right shall be deemed terminated upon (a) the expiry of the licence (b) surrender of the licence by the licence holder pursuant to Section/Article [Surrender section/article of the Law] or (c) revocation of the licence by the [Regulating Authority] pursuant to Section/Article [Revocation section/article of the Law]].

(2) On the termination of a mineral right, the former holder shall deliver to the [Regulating Authority] or as the [Regulating Authority] directs,

(a) the records which the holder is obliged under this [Act][Code][Law] or regulations made under this [Act][Code][Law] to maintain,,

(b) the plans and maps covered by the mineral right prepared by the holder or at the holder’s instructions, and

(c) other documents, including in electronic format, if available, that relate to the mineral right.

(3) A person who fails to deliver, within thirty days from the date of being called upon to do so by the [Regulating Authority], a document which is required to be delivered under subsection (1) commits an offence and is liable on summary conviction to a fine not more than the cedi equivalent of US$ ten thousand or imprisonment for a term not more than three years or to both.

Annotation

Drawn from Uganda’s mining law (2003) and Ghana’s mining law (2006), this example specifies the three ways in which a mineral right, including a prospecting/reconnaissance licence, can terminate. It further provides that the holder is required to deliver all records, maps and other documents relating to the mineral right upon termination. Failure to comply is an offense punishable by the fine or prison term indicated.

24.10 Example 2:

Article [_]

A prospecting permit shall expire when the specified period ends, if the holder surrenders the permit, or if it is cancelled by [the regulatory authority] for non-compliance with the obligations by which the permit-holder is bound for the reasons listed in Article [_] (on the grounds for the cancellation of mining titles) of the present mining [Code][Act][Law].

Annotation

Drawn from Mali’s mining law (2012), this provision simply identifies the events that result in the termination of the prospecting/reconnaissance licence (term expiration, surrender or cancelation) and refers back to the article of the law that lists the grounds for cancelation of all mineral rights, including prospecting/reconnaissance licences.

24.11 Example 1:

Article [_]

(1) The [Regulating Authority] may revoke any mining right if-

(a) the holder is convicted by any court of competent jurisdiction for an offence under this [Act][Code][Law] or its Regulations and the time for appealing against the conviction, if any, has lapsed or the appeal has been dismissed or withdrawn or struck out for want of prosecution;

(b) the holder breaches any provision of this [Act][Code][Law] or regulations made or of any terms or conditions of his mining right whether express or implied;

(c) the holder breaches any order or notice issued or given under this [Act][Code][Law] or Regulations made under it, or on being required by the [Regulating Authority] by notice to show cause within a time specified in the notice why the mining right should not be revoked, the holder fails to comply or show adequate cause;

(d) the holder is declared by a court of competent jurisdiction to be insolvent or bankrupt or goes into insolvent liquidation, except as part of a scheme for reorganisation, amalgamation or an arrangement with its creditors; or

(e) the mining right is held jointly by more than one person and the provisions of subsection (1) (a) of this section apply to any one of the joint holders unless the other joint holders are able to assume the obligations of the former and adopt measures which will guarantee the performance of these obligations.

(2) A mining right shall be revoked upon written advice of the [Regulating Authority] only after thirty days’ notice of the intention to revoke the mining right containing in detail the grounds thereof is given to the holder and during the period fixed the holder has failed to remedy the breach or remove the grounds for revocation within the required period.

(3) Any notice issued by the [Regulating Authority] and sent by registered mail to the last known address in [Country] or given in person to an authorised representative of the mining right holder in [Country] or published in the [Gazette], shall for all purposes be sufficient notice of the revocation of the mining right to the mining right holder.

Annotation

Drawn from Nigeria’s mining law (2007), this article details – in a general article on revocation of all mineral licences - the grounds for revocation of a prospecting/reconnaissance licence. The licence is non-exclusive under the mining law of Nigeria. The provision includes the following safeguards:

1. The grounds for revocation are specified;
2. Notice of the ground for revocation of a holder’s licence must be provided to the holder in writing, in one of three specified ways; and
3. The holder is given thirty days to remedy the breach or remove the grounds for revocation.

24.11 Example 2:

Article [_]

(1) The [Regulating Authority] on the recommendation of the [Administrative Reviewer] may cancel a mineral right if the holder,

(a) fails to make payment on the due date, whether due to the [State] or another person, required by or under this [Act][Code][Law],

(b) becomes insolvent or bankrupt, enters into an agreement or scheme of composition with the holder’s creditors, or takes advantage of an enactment for the benefit of its debtors or goes into liquidation, except as part of a scheme for an arrangement or amalgamation,

(c) makes a statement to the [Regulating Authority] in connection with the mineral right which the holder knows or ought to have known to be materially false, or

(d) for any reason, becomes ineligible to apply for a mineral right under this [Act][Code][Law].

(2) The [Regulating Authority] shall, before cancelling a mineral right under subsection (1), give notice to the holder and shall in the notice, require the holder to remedy a breach of the condition of the mineral right within a reasonable period, being not less than sixty days in the case of a prospecting/reconnaissance right and if the breach cannot be remedied, to show cause to the reasonable satisfaction of the [Regulating Authority] why the prospecting/reconnaissance right should not be cancelled.

(3) On cancellation of a mineral right under this section, the right of the holder shall cease but without prejudice to the liabilities or obligations incurred by another person in relation to the mineral right prior to the date of the cancellation.

Annotation

Drawn from the mining law of Ghana (2006), this provision governs the revocation of an exclusive prospecting/reconnaissance licence. It includes the following safeguards:

1. The Regulating Authority is only authorized to revoke a licence on the recommendation of the Minerals Commission;
2. The grounds for revocation are specified in the mining law and are more limited than in the first example (i.e., a breach of any term of the mining law is not a ground for revocation of the licence under the Ghanaian mining law); and
3. The Regulating Authority must give prior notice to the holder,
4. The holder is given a sixty day period to cure the breach or explain why the licence should not be revoked.

These safeguards are stronger than those for non-exclusive rights under the first example in that a recommendation of the Commission is required in order for the Regulating Authority to revoke, the grounds for revocation are much more limited, and the holder is given a longer cure period.

As in the first example, the Regulating Authority is given the flexibility to revoke or not, based on the circumstances and the reasoning provided by the licence holder.

24.12 Example 1:

Article [_]

(1) The holder of a mining right may, upon application in the form and manner prescribed in the Regulation, and upon meeting the conditions prescribed therein, surrender the mining right.

(2) The Mining Cadastre Office shall approve an application made under subsection (1) of this section to surrender the mining right if it is satisfied that-

(a) the holder of the mining right has submitted the request for surrender in the prescribed form and manner;

(b) the surrender will not affect any liability incurred by the mining right holder before the surrender of the mining right, including environmental obligation;

(c) all rents due and fees prescribed, if any, have been paid by the holder of the mining right; and

(d) the holder of the mining right has surrendered the original title document.

Annotation

Drawn from Nigeria’s mining law (2007), this example of a surrender provision establishes the right of the licence holder to surrender the mineral licence provided that certain conditions are met. Most importantly, the conditions require a finding that the surrender will not affect any liability of the licence holder, including environmental obligations, and that the holder of the licence has paid all fees and rents due. The provision applies to all mining rights (the language is not specific to prospecting/reconnaissance licences.)

24.12 Example 2:

Article [_]

(1) The holder of a mineral licence may surrender the reconnaissance area, prospecting area, retention area or mining area to which such licence relates by notice in writing addressed and delivered to the [Regulating Authority] and shall together with such notice return such mineral licence, whereupon –

(a) the [Regulating Authority] shall -

(i) cancel such mineral licence;

(ii) make an entry to that effect in the register of mineral licences referred to in

article [_] (on the register of mineral licences);

(iii) notify the person who was the holder of such mineral licence that such mineral

licence has been cancelled; and

(iv) notify the owner of the land on which such area was situated of such

surrender; and

(b) such area shall be deemed to have been surrendered on the date on which such mineral licence has been cancelled as provided in subparagraph (i) of paragraph (a).

(2) If a reconnaissance area, prospecting area, retention area or mining area is surrendered as provided in subsection (1), the holder of the mineral licence to which such area relates shall –

(a) demolish any accessory works erected or constructed by such person in such area, except in so far as the owner of the land retains such accessory, works on such conditions as may mutually be agreed upon between such owner and person, and remove from such land all debris and any other object brought onto such land;

(b) take all such steps as may be necessary to remedy to the reasonable satisfaction of the [Administrative Reviewer] any damage caused by any reconnaissance or prospecting operations and mining operations carried on by such holder to the surface of, and the environment on, the land in the area in question.

(3) The surrender of a reconnaissance area, prospecting area, retention area or mining area shall not affect any legal proceedings instituted against such holder or any obligation or liability of such holder in terms of the provisions of this [Act][Code][Law].

(4) Any person who contravenes or fails to comply with the provisions of subsection (2) shall be guilty of' an offence and on conviction be liable to a fine not exceeding [Maximum Penalty Amount] or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.

Annotation

Drawn from Namibia’s mining law (1992), this example takes a different approach to surrender of the prospecting/reconnaissance licence. In contrast to the Nigerian example, which makes the administrative acceptance of a surrender subject to the fulfilment of certain conditions, this example makes surrender automatic upon the submission of a written request by the holder, together with the mineral licence. The Regulating Authority is required to enter the surrender in the register of mineral licences, to notify the surrendering licence holder of the cancellation of the licence and to notify the owner of the land covered by the surrendered licence.

Instead of imposing conditions precedent for recognition of a surrender of the licence (which is called “abandonment” in the Namibian mining law), this example imposes obligations on the surrendering licence holder after the cancellation of the licence. These obligations include:

• Demolition and removal of any works erected on the prospecting/reconnaissance area, unless otherwise agreed with the landowner.
• Remediation of any damage caused to the surface land and the environment, to the reasonable satisfaction of the Administrative Reviewer. The “Administrative Reviewer” as used in this example is the administrative authority that is the immediate superior of the Regulatory Authority in the administrative hierarchy.

Failure to comply with these post-surrender obligations is punished by a fine and/or prison term.

Whereas the surrender of the mineral licence is effective as of the date of cancellation by the Regulating Authority, the surrendering holder must retain whatever access rights have been secured with the owners of the land covered by the surrendered licence in order to accomplish the holder’s post-surrender obligations.

Like the previous example, this example stipulates that the surrender shall not affect any liability or obligation under the mining law, or any legal proceeding against the surrendering holder.

The advantage of this approach is that it speeds the process of making surrendered licence areas available to another applicant. The disadvantage is that enforcement of the post-surrender obligations may be problematic.

24.13 Example 1:

Article [_]

A prospecting/reconnaissance licence is not transferable.

Annotation

Drawn from Sierra Leon’s mining law (2009), a non-exclusive prospecting/reconnaissance licence is not transferable. This is a typical provision. Because a non-exclusive prospecting/reconnaissance licence over the same area is available from the Regulating Authority, there is no need for transferability.

24.13 Example 2:

Article [_]

(1) A prospecting right or reconnaissance permit confers on the holder an exclusive right to carry out prospecting and reconnaissance investigations for minerals belonging to the group for which said permit was issued, within the boundaries of the holder's area and with no limit as to depth.

(2) A prospecting right or reconnaissance permit is a movable indivisible right that may not be subleased. It may be assigned or transferred. To this end, a rights holder must send [the regulatory authority] any contract or agreement through which it purports confer, assign or transfer the rights and obligations arising from the prospecting permit to a third party.

The assignment or transfer of a prospecting right may only occur under the same conditions which applied for the allocation of the right and shall be subject to the assignor providing [the regulatory authority] with a report on the work carried out in accordance with the Establishment Convention. The assignment or transfer shall take effect only when the order from [the regulatory authority] comes into operation.

The assignee or heir must apply for the permit within thirty (30) days from the signing of the deed of assignment or the legal instrument in which the heirs were designated, which must have been finalised subject to the condition precedent of regulatory authority approval. The terms for assignment and transfer shall be specified in the implementing decree from the regulatory authority.

Annotation

Drawn from Mali’s mining law (2012), this provision states that the exclusive prospecting/reconnaissance licence is transferable. As noted above, an exclusive prospecting/reconnaissance licence is more valuable to an investor and is more likely to have given rise to significant investment than a non-exclusive licence. In order to attract junior companies that focus on early stage reconnaissance and prospecting before selling their assets to a larger mining company, this provision grants a robust prospecting/reconnaissance right that promotes investment in previously unexplored or underexplored areas.

24.14 Example 1:

Article [_]

(1) The following offences shall be subject to a fine of [amount] to [amount] and a prison sentence of between eleven days and two years, or only one of these two penalties:

(a) those who analyse samples outside of the [Country] without prior authorisation from the Mining Division.

Article [_]

(1) The following offences shall be subject to a fine of [amount] to [amount] and a prison sentence of between one month and three years, or only one of these two penalties:

(a) conducting mining or prospecting activities in the absence of an appropriate mining right;

(b) those who, within the meaning of the provisions of the Criminal Code, provide aid or assistance to illegal prospectors or operators.

(2) In addition, mineral substances which are extracted illegally, as well as the means, items and instruments which contributed to offences 1) and 2) above shall be seized by and forfeited to the State.

(3) Those who have not carried out the work in accordance with Article [_] (on measures relating to preserving public health and safety, and those relating to respecting the features of the surrounding environment) above before the relevant mining right comes to an end; and

(4) Holders of mining rights who do not, within the prescribed time periods, comply with the instructions of the [the regulatory authority] relating to the measures provided for in Article [_] (on obligations relating to public health and safety, nature conservation, and the preservation of transportation routes, the sturdiness of buildings, and the use, output or quality of water of any kind) above.

Annotation

Drawn from Mali’s mining law (2012), these provisions include violations and penalties that would be specific to reconnaissance-type prospecting, although not necessarily exclusive to that type of activity:

1. sending samples for analysis outside of Mali without authorization from the Department of Mines ;
2. engaging in exploration or exploitation of mineral substances without the proper title;
3. assisting clandestine prospectors or miners;
4. failure to implement the approved protective measures prior to site closure; and
5. failure to implement required measures for safety, pollution control, environmental protection, protection of communication lines, structural stability, and water usage, flow and quality.

The penalties include fines and imprisonment, as well as confiscation of illegally extracted minerals and the means, instruments and things used to extract them.

24.14 Example 2:

Article [_]

Any person who intentionally or negligently transgresses the boundaries of his or her reconnaissance area, prospecting area, claim area, retention area or mining area while carrying on reconnaissance operations, prospecting operations or mining operations or such boundaries to be so transgressed shall be guilty of an offence and on conviction be liable to a fine not exceeding [Maximum Penalty Amount] or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.

Annotation

Drawn from Namibia’s mining law (1992), this example presents an additional specific violation applicable to reconnaissance-type prospecting licences – namely, conducting operations outside of the licenced area - that may be found within a general article on miscellaneous violations.

25.1 Example 1:

Article [_]. Eligibility for mining and quarrying rights

(1) Subject to the provisions of Article [_] below (on persons who are not eligible), the following shall be eligible for mining and quarrying rights:

(a) any natural person who is of age and is a Congolese national as well as any legal entity under Congolese law which has its registered office and its administrative office within the National Territory and whose objects are mining activities;

(b) any natural person who is of age and is a foreign national as well as any legal entity under the law of a foreign country;

(c) any scientific body.

(2) Eligible persons referred to in (1) (b) above shall be required to elect a domicile with a representative in the mining and quarrying industry which is set up within the National Territory and to act through their intermediary.

(3) Legal entities incorporated in foreign countries and the scientific bodies cited in 1 (b) and (c) above shall only be eligible for mining and quarry prospecting rights.

Article [_]. Electing a domicile

(1) Electing the domicile referred to in the preceeding Article is to be done intentionally and may only be done in writing.

(2) All service of documents, claims and actions for the performance of an act for which the domicile was elected, may be validly done at this domicile.

Article [_] Agents in the mining and quarrying industries

(1) Agents in the mining and quarrying industries require prior approval from [the regulatory authority] as regards their respectability, ethics, skills and in-depth knowledge of mining legislation, or of the management of the mining and quarrying field.

(2) In addition to representation, part of the role of agents in the mining and quarrying industries is to advise and/or assist any interested person in the granting and exercising of mining and quarrying rights as well as in disputes relating thereto.

(3) [The regulatory authority] shall maintain and publish the list of approved agents and shall update said list on an annual basis.

(4) The Mining Regulations shall lay down the conditions for approving agents in the mining and quarrying industries.

Article [_] Persons who are not eligible

(1) The following are not eligible to apply for and obtain mining and/or quarrying rights, an artisanal miner's card or a merchant's card, as well as authorisation to purchase and sell mineral substances from artisanal operations:

(a) State officials and civil servants, judges, members of the Armed Forces, the Police and Security Services, the employees of public bodies which are authorised to carry out mining operations;

(b) any person who lacks legal capacity, as provided for in Article [_] of the [Family Code];

(c) any person who has been prohibited therefrom including:

(i) a person who has been convicted, by a final judgement, for violating mining and quarrying legislation or legislation relating to economic activities as regards their mining and quarrying rights and affiliates, and they shall have been prohibited from so acting for a period of 10 years;

(ii) a person whose artisanal miner's or merchant's card has been withdrawn, and prohibited from obtaining such a license for a period of three years;

(iii) a person whose authorisation to purchase and sell mineral substances from artisanal operators has been withdrawn, and purchases/sales prohibited for a period of five years;

Annotation

Drawn from DRC’s mining law (2002), these provisions contain specific eligibility requirements for individuals and corporate entities, national and foreign, as well as circumstances that render certain types of individuals and entities ineligible to hold mining and quarrying rights. The eligibility provisions are broken up into four articles, for clarity. They cover, respectively: (1) the general rule of eligibility, (2) the local domicile requirement for foreign nationals and entities, (3) the accreditation and role of mining and quarrying representatives, and (4) the general rule of ineligibility.

The first article establishes who is eligible for what types of licences (unless declared ineligible by the subsequent article on ineligibility). It makes a distinction between (a) citizens of the DRC and companies organized as mining companies under the laws of the DRC that have their official headquarters and principal administrative office in the DRC, on the one hand, and (b) foreign citizens and companies organized under foreign laws, and (c) scientific organizations, on the other hand. Foreign citizens and companies, as well as scientific organizations, are eligible only for exploration licences for mines and quarries. They are not eligible for exploitation licences.

Foreign citizens and companies are required to make an election of domicile in care of a mining and quarrying representative based in the National Territory and to act through such representative. This requirement is intended to assure the administration that they will be able to serve all legal notices for the foreign citizen or company on a known local entity. It will also serve to establish a tax domicile of the foreign nationals and entities in the DRC.

The second article provides that the election of domicile required of foreign citizens and companies must be made in writing; and that any notification, request or legal process concerning anything for which such election of domicile has been made is valid if delivered to that address.

The third article describes the role and control of the mining and quarrying representatives. They must be accredited by the Regulating Authority based on the criteria of honor, ethics, competency and deep knowledge of the mining legislation or the administration of matters relating to mines and quarries. In addition to their role of representation, the mining and quarrying representatives are authorized to advise and/or assist any person or entity interested in the issuance and the exercise of mining and quarrying rights, as well as related dispute resolution. The conditions for accreditation of mining and quarrying representatives are to be set forth in the Mining Regulation; and the Regulating Authority is to maintain and publish the list of accredited mining and quarrying representatives and update it annually. This provision, in effect, creates a new profession – that of mining and quarrying representative – in the interest of establishing a high standard of competency and professionalism in the representation of mining companies before the administrative authorities and dispute resolution bodies.

The fourth article describes the categories of persons who are not eligible to receive mineral rights. They include: (a) the listed categories of public servants, (b) persons lacking legal capacity under the applicable legislation (in this case the Family Code), and (c) persons subject to a prohibition. The latter category includes persons convicted of a criminal violation of the mining law (prohibited for 10 years), persons from whom an artisanal mining or trading permit has been withdrawn (prohibited for three years) and persons whose authorization to operate a trading post for artisanal mining products has been withdrawn (prohibited for five years).

25.1 Example 2:

Article [_] Eligibility for exploration licence.

A person shall not be eligible to apply for the grant of an exploration licence under this [Act][Code][Law] unless that person is a company incorporated or registered under the [Companies Act] and whose name has not been struck off the register of companies at the time of the application.

Article [_] Restrictions on grant of mineral rights

(1)No mineral right shall be granted to-

(a)an individual who-

(i)is under the age of 18 years;

(ii)is not a citizen of [Country] or has not been ordinarily resident in [Country] for a period of ten years immediately preceding his application for a mineral right;

(iii)is an un-discharged bankrupt, having been adjudged or otherwise declared bankrupt under any written law, or enters into any arrangement or scheme of composition with his creditors; or

(iv)has been convicted of an offence involving fraud or dishonesty;

(b)a co-operative society which is not registered in accordance with the laws of [Country];

(c) a body corporate-

(i)which is not registered or incorporated under the [Companies Act]; or

(ii)which is in liquidation other than a liquidation which forms part of a scheme for the reconstruction or amalgamation of such body corporate;

(iii)in respect of which an order has been made by a court of competent jurisdiction for its winding up or dissolution;

(iv)which has made a composition or arrangement with its creditors;

(v)which has among its shareholders any shareholder who holds at least a ten percent share of the company or a director, who would be disqualified in terms of subparagraphs (i) or (iv) of paragraph (a).

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision refers back to and modifies the general provision on eligibility for mineral licences. Unlike the DRC Mining Code eligibility provision which makes exploration licences available to foreign and national individuals and companies, the Sierra Leone provision limits the issuance of exploration licences to corporate entities formed under the Companies act of Sierra Leone only. However, a company can be formed under the Companies act by foreign nationals. This provision, in comparison to the DRC provision, provides the Administration with the additional assurance of knowing that each entity eligible for an exploration licence is subject to the provisions of the local Companies act and registered thereunder, as opposed to being an entity formed under the law of a foreign jurisdiction with a different legal system and tradition and possibly a different language and alphabet.

Neither the Companies Act nor the mining law of Sierra Leone requires the participation of local citizens as shareholders or directors of a company formed under the Companies act that is eligible to hold an exploration licence. Civil society in many African countries has advocated such measures, however; and enlightened mining companies often seek local partners. The issue merits consideration in connection with formulating eligibility requirements.

In addition, countries that are members of a regional customs union, economic and/or financial community, or uniform law organization may wish to consider whether companies formed under the similar laws of other member states should be deemed eligible to hold exploration rights.

25.2 Example 1:

Article [_] Application for exploration licence

(1) An application may be made for an exploration licence for minerals falling under any of the following groups:

(a) metallic minerals;

(2) An application for an exploration licence including an application in respect of land in an area reserved for applications by tender for exploration licences shall be made to the [Regulating Authority] and shall be in the prescribed form and accompanied by the prescribed fee.

(3) An application for the grant of an exploration licence-

(a) shall contain-

(i) in the case of an individual, his full name and nationality, physical and postal addresses, and attach his recent passport size photograph; or

(ii) in the case of a body corporate, its Corporate name, place of incorporation, names and nationality of directors;

(iii) in the case of more than one person, particulars referred in items (i) and (ii) of each person.

(b) shall state the type of minerals and its relevant group, as indicated in subsection (1);

(c) shall state the size of the area of land over which it is sought, which shall not exceed the maximum area prescribed as provided under section [_] (stating that maximum areas are to be established by regulation), and be accompanied by a plan of the area;

(d) shall contain a statement giving particulars of the financial and technical resources available to the applicant; and

(e) shall contain a statement on the procurement plan of goods and services available in [Country];

(f) shall contain details of any mineral right previously granted to the applicant.

(4) Every application for an exploration licence made in the prescribed form by an applicant who has tendered to the licensing authority the prescribed fee, shall be registered immediately in the register maintained for such applications under this [Act][Code][Law].

(5) Each application registered under subsection (4) shall be assigned a number and the date on which it was received and shall be indicated on an official receipt handed to the applicant or his authorised agent or sent to the applicant by registered mail.

Article [_] Exploration licence by tender

(1) An application for an exploration licence in an area designated as an area for which applications for such a licence are invited by tender shall-

(a) be in the prescribed tender form and accompanied by the prescribed tender fee; and

(b) subject to the terms and conditions of the invitation to tender, include the matters required to be included in applications by section [_] (the general article on the application requirements for an exploration licence).

(2) Applications made under subsection (1) shall be submitted to the [Administrative Reviewer] for its advice.

(3) On receipt of a report from the [Administrative Reviewer], the [Regulating Authority] shall consider the competing bids and shall select the bid which is most likely to promote the expeditious and beneficial development of the mineral resources of the area having regard to

(a) the programme of exploration operations which the applicant proposes to carry out and the commitments as regards expenditure which the applicant is prepared to make;

(b) the financial and technical resources of the applicant; and

(c) the previous experience of the applicant in the conduct of exploration and mining operations, and the successful application shall be treated as an application under section [_] (on the rules governing priority in the case of competing applications) which has priority over any other application and the applicant shall be notified accordingly.

Annotation

Drawn from Tanzania’s mining law (2010), this provision sets forth the requirements for the grant of an exploration licence (called a prospecting licence in the law).The law provides for a two-tier process of issuing such licences (an application process and a tender process). It sets out the requirements for the licence in the article describing the required application contents and then refers back to them in the article on the conditions for the grant of the licence.

The requirements for obtaining an exploration licence by application include all of the elements described in the immediately preceding annotation and, in addition, the following:

1. Statement as to local procurement of goods; and
2. Minimum annual expenditure per square kilometer.

25.2 Example 2:

Article [_]

In general, mining licences shall be considered and granted according to a principle of "1st come, 1st served".

Article [_]

(1) All applications for mining rights are to be made using the prescribed form from the Ministry of Mines, a template of which shall be set out in the decree implementing the present [Code][Act][Law].

(2) After correctly completing the form, the applicant is to file their application with said office, with acknowledgement of receipt that indicates the date and time, to the hour and minute, that the application was filed, and constitutes evidence of filing.

Article [_]

(1) Prospecting licences, or "P" licences, relating to a defined area shall be granted by a decision of [the regulatory authority] or its representative, within no more than thirty (30) working days, to the first eligible person who filed an application which meets the conditions specified in Article [_] (which states that the template for application forms shall be set out in the implementing decree) above.

(2) In cases where the applicant is applying pursuant to an exclusive permit to reserve an area, they are to attach said permit, duly endorsed by the authorities for the relevant Decentralised Territorial Collectives, to their application.

Annotation

Drawn from Madagascar’s mining law (1999), this provision provides for the issuance of an exploration licence to the first eligible applicant who submits a complete application for an available area. No proof of technical or financial capacity is required; and no work program is reviewed as a requirement for the grant of the licence.

Madagascar is an example of a jurisdiction that relies on ex-post requirements for maintaining the validity of an exploration licence rather than limiting access to exploration licences by imposing requirements for their issuance.

25.3 Example 1:

Article [_] The end of the application assessment

(1) The assessment of an application for mining and/or quarrying rights shall come to an end on the day on which the applicant is notified of the decision to grant the application or the day of the judge's decision as provided for in Article [_] (on registration through legal channels) of the present [Code][Act][Law].

(2) In the event of a decision to refuse the application, and subject to the provisions of Article [_] (on the application of the common law appeals to a higher administrative authority) and Article [_] (on the shortening of time periods within which appeals may be brought) of the present [Code][Act][Law], the assessment of an application for mining and/or quarrying rights shall come to an end on the day on which the applicant is notified of the decision.

Article [ ] The application of the common law

Subject to the provisions of Article [_] (on registration through legal channels) and Article [_] (on matters which concern appeal proceedings) of the present [Code][Act][Law], an appeal against administrative acts decreed by administrative authorities in application of, or in violation of, the provisions of the present [Code][Act][Law], or those of the Mining Regulations shall be governed by the common law, in particular by the provisions of Articles [_] of the [Code of Judicial Organisation and Jurisdiction] and by the [relevant law] relating to procedure before the [Supreme Court], as amended and supplemented to date.

Article [_] The shortening of time periods

(1) Notwithstanding the provisions of the [_] Act mentioned above, the applicant's preliminary appeal, as a litigant before the Administrative Division of the [Supreme Court of Justice], to the authority which may set aside or amend the administrative act must be brought within thirty days of the date on which the decision was published or the applicant was personally notified of it. A request to set aside the decision is to be brought within twenty days from the day on which notification was given for the total or partial dismissal of the appeal.

(2) The time limit for filing the reply and the one for the administrative file shall be fifteen working days from the date of notification of the appeal. The same time limit shall apply for the opinion of the [Attorney General of the Republic]. An extension of the time limits imposed on the parties for sending in the appeal and the reply, which may possibly be decided on by a reasoned order of the President of the Administrative Division of the [Supreme Court of Justice], may not exceed 12 working days.

(3) The shortening of the time limits provided for in the preceeding paragraphs of the present Article only apply to refusals to grant mining and/or quarrying rights, and of the approval or perfection of mortgages.

(4) In all circumstances, the judgement of the [Supreme Court of Justice] shall be delivered within thirty working days of the deliberations relating to the case.

Annotation

Drawn from DRC’s mining law (2002), this provision provides for an expedited administrative and judicial appeal process in the case of refusal to grant a licence under the general procedures for judicial review of administrative decisions. It includes:

• Filing a request for reconsideration with the granting authority within 30 days of the notification of the decision to refuse the licence.
• Filing a request for judicial reversal within twenty days of the rejection of the request for reconsideration;
• Filing of the briefs in opposition and the administrative record within 15 days of notification of the appeal;
• Limitation of the power of the court to grant filing deadline extensions: 12 days maximum;
• Issuance of the decision of the Supreme Court of Justice within 30 days of closure of the pleadings.

25.3 Example 2:

Article [_]

(1) Any person whose rights or legitimate expectations have been materially and adversely affected or who is aggrieved by any administrative decision in terms of this [Act][Code][Law] may appeal in the prescribed manner to –

(a) the [Regulating Authority], if it is an administrative decision by an officer of the [Regulating Authority]; or

(b) the [Administrative Reviewer], if it is an administrative decision by the [Regulating Authority].

(2) An appeal in terms of subsection (1) does not suspend the administrative decision, unless it is suspended by the [Regulating Authority], as the case may be.

(3) No person may apply to the court for the review of an administrative decision contemplated in subsection (1) until that person has exhausted his or her remedies in terms of that subsection.

(4) Sections [_] of the [Administrative Procedures Act], apply to any court proceedings contemplated in this section.

Annotation

Drawn from South Africa’s mining law (2002), this provision acknowledges a right of appeal under the Promotion of Administrative Justice act and imposes an obligatory internal administrative appeal (a request for reconsideration) as a prerequisite. It does not establish expedited deadlines in the manner that the DRC provision does.

25.4 Example 1:

Article [_]

(1) Subject to the provisions of this [Act][Code][Law], an exploration licence shall cover such area, not exceeding 1000 km2, as is in accordance with the applicant’s application.

(2) Subject to the provisions of subsection (4), the exploration area shall be reduced in size to eliminate therefrom—

(a) at the end of the initial term of the exploration licence, not less than half of the initial area;

(b) at the end of each period of renewal, half of the remaining area, or such lower proportion as the [Regulating Authority] may in any case agree; and

(c) the area covered by any retention licence or mining licence granted thereon.

(3) The holder of an exploration licence shall designate, prior to the end of each of the periods referred to in subsection (2), the area or areas to be eliminated from the exploration area and, in default thereof, the designation shall be made by the [Regulating Authority].

(4) Where a person holds two or more contiguous exploration licences covering the same period and the same mineral or minerals the [Regulating Authority] shall, for the purposes of the elimination, under subsection (2), of part of any of the areas thereof, permit the areas covered thereby to be deemed to be one area, the subject of one such exploration licence.

(5) No compensation shall be payable to the holder of any exploration licence arising out of reductions in area effected in terms of subsection (2).

Annotation

Drawn from Botswana’s mining law (1999), this example represents perhaps the outer limit (1000 km2) of the maximum size of area available under an exploration licence (called prospecting licence under the Botswana law). It is fairly typical in requiring a reduction of at least half of the area upon each renewal, but allows some flexibility in the case of renewals after the first.

Areas covered by retention licences are eliminated because they come under a separate licence (i.e., a licence holder may obtain a retention licence for part of a licence area while continuing to hold the rest under the prospecting licence).

25.4 Example 2:

Article [_]

(1) The area covered by a prospecting licence shall be a polygon with straight sides which are oriented north-south and east-west, with geographic north as the reference, with the exception of land borders and international waters.

(2) The minimum length of each segment of the polygon shall be (1) kilometre.

(3) The area covered by a prospecting licence shall have a surface area of between one (1) square kilometre and four hundred (400) square kilometres.

(4) Each time a prospecting licence is renewed, it's surface area shall be reduced by a quarter.

(5) However, the prospecting licence holder may choose to retain the same surface area provided that they prove that work is being carried out over the entire area which is under the relevant licence. In this event, the prospecting licence holder shall be required to pay an option fee, the rates and terms of which shall be determined by decree.

Annotation

Drawn from Côte d’Ivoire’s mining law (2014), this provision imposes cadastral shape, orientation and border limitations on the area available under an exploration licence, as well as a minimum (1 km2) and a maximum (400 km2) size limit on the area.

This article is an innovative approach to the typical area reduction requirement for renewals. In light of the smaller maximum area allowed, the article only requires that the area held be reduced by one quarter, rather than one half, at each renewal. Furthermore, it allows the licence holder to opt to hold onto a larger area at renewal provided that the holder demonstrates that work is being done on the larger area and pays a special fee (set by regulation) in order to exercise that option.

25.5 Example 1:

Article [_]: Obligations for maintaining the validity of the right

(1)In order to maintain the validity of their mining or quarrying right, the holder must:

(a) commence work within the period specified in Article [_] of the present [Code][Act][Law];

(b) pay the annual surface area fees per square relating to their title, each year before the deadline set in Article [_] (on the amounts due as annual surface area fees per square) of the present [Code][Act][Law].

(2) Should one or more of these obligations not be fulfilled, the holder shall lose their right in application of the procedure provided for in Articles [_] (on failure to comply with administrative obligations, and the related penalties) of the present [Code][Act][Law].

(3) Should the holder fail to comply with the obligations listed in the following chapters, they shall be subject to fines and/or possibly with an order to suspend operations or, in the case of an offence, shall be prosecuted.

Article [_] The obligation to commence work

A Prospecting Licence holder shall be required to commence work within six months from when the title establishing their right was issued.

Article [_] The obligation to pay the annual surface area fees per square

(1) To cover costs for the services and management relating to the rights established by mining titles, annual surface area fees per square, for each mining or quarrying title which is issued, shall be collected for the Ministry of Mines which shall redistribute a portion to the departments of [the regulatory authority] responsible for the administration of the present [Code][Act][Law].

(2) Holders of Prospecting Licences, Operating Licences, Operating Licences relating to Tailings, Operating Licences for Small-Scale Mining, Permits to Prospect for Quarry Products and Permanent Quarry Operating Permits shall pay the surface area fees for the first year when the mining or quarrying title is issued.

(3) The holder is to settle the annual surface area fees per square for each following year before the end of the first quarter of the calendar year. However, annual surface area fees are to be paid pro rata to the relevant time period, when the initial title is issued, or in the last year during which the title is valid.

(4) Annual surface area fees per square are to be paid at the relevant counter at the Ministry of Mines which issued the mining or quarrying title, which shall issue the holder with a receipt when payment is made.

Article [_] Environmental protection during prospecting

(1) Before prospecting work relating to mining or quarry products may commence, the holder of a Prospecting Licence or a Permit to Prospect for Quarry Products must draw up and obtain approval for an Environmental Management Plan (Plan d’Atténuation et de Réhabilitation (PAR)) for the proposed activities.

(2) The terms of the PAR and its approval shall be laid down in the regulations.

(3) The approval of a PAR shall fall under the jurisdiction of the department responsible for environmental protection within the [the regulatory authority] in collaboration with [the regulatory authority for the environment].

Article [_] Declaration of indicators of an archaeological discovery

Article [_] The discovery of items relevant to the national cultural heritage

Article [_] The jurisdiction of [the regulatory authority]

Article [_] The declaration of an accident in a mine or quarry

Article [_] The use of explosive products

Article [_] The relationship with local authorities

Article [_] Registers and reports

Article [_] Inspections

Article [_] The commencement and closure of a prospecting or operation/s area.

Annotation

Drawn from DRC’s mining law (2002), this provision deals with obligations in two chapters. Chapter 1 establishes the principle that the holders of all licences must comply with two specific obligations that have specific time requirements in order maintain the validity of their rights:

• begin work within the time specified in article 197 of the Code; and
• pay the surface fee per square unit of area related to their title before the deadline set in article 199 of the Code.

Failure to comply with either of these obligations results in the licensee being stripped of the licence.

The licencee’s failure to comply with the obligations listed in the second chapter will be penalized by fines and/or possible orders to suspend operations, or in the case of violations, by judicial process.

This bifurcation of obligations into two categories and the clarity and objectivity of the two obligations that are enforced by revocation of the title provides great security of title to licencees and also ensures prompt and complete payment of the fees that fund the work of the Regulating Authority.

The obligations in the second category are numerous and are only referenced here by article title, except for the obligation to prepare and obtain the approval of an Environmental Mitigation Plan (PAR) before commencing work (which must begin within 6 months of delivery of the licence). The process of approval is expedited by a sectoral environmental review authority.

25.5 Example 2:

Article [_] Legal nature of exploration right, mining right, or production right, and rights of holders thereof

(1) No person may prospect for or remove, mine, conduct, technical co-operation operations, reconnaissance operations, explore for and produce any mineral or petroleum or commence with any work incidental thereto on any area without –

(a) an approved environmental management programme or approved environmental management plan, as the case may be;

(b) a prospecting/reconnaissance permission, exploration right, permission to remove, mining right, mining permit, retention permit, technical co-operation permit, reconnaissance permit, exploration right or production right, as the case may be; and

(c) notifying and consulting with the land owner or lawful occupier of the land in question.

Article [_]. Rights and obligations of holder of exploration right

(1) The holder of an exploration right must –

(a) lodge such right for registration at the Mining Licences Office within 30 days of the date on which the right –

(i) becomes effective in accordance with the provisions of this [Act][Code][Law]; or

(ii) is renewed in accordance with the provisions of this [Act][Code][Law];

(b) commence with exploration activities within 120 days from the date on which the exploration right becomes effective or such an extended period as the [Regulating Authority] may authorise;

(c) continuously and actively conduct exploration operations in accordance with the exploration work programme;

(d) comply with the terms and conditions of the exploration right, relevant provisions of this [Act][Code][Law] and any other relevant law;

(e) comply with the requirements of the approved environmental management programme;

(f) pay the prescribed exploration fees to the State; and

(g) subject to section [_] (on the rules regarding the removal and disposition of minerals), pay the State royalties in respect of any mineral removed and disposed of during the course of exploration operations.

Article [_]. Permission to remove and dispose of minerals

(1) Subject to subsection (2), the holder of an exploration right may only remove and dispose for his or her own account any mineral found by such holder in the course of exploration operations conducted pursuant to such exploration right in such quantities as may be required to conduct tests on it or to identify or analyse it.

(2) The holder of an exploration right must obtain the [Regulating Authority]'s written permission to remove and dispose for such holder's own account of bulk samples of any other minerals found by such holder in the course of exploration operations conducted pursuant to such exploration right.

Article [_] Information and data in respect of prospecting/reconnaissance and exploration

(1) The holder of an exploration right or prospecting/reconnaissance permission must –

(a) keep proper records, at the registered office or place of business, of exploration operations and the results and expenditure connected therewith, as well as borehole core data and core-log data, where appropriate; and

(b) submit progress reports and data, in the prescribed manner and at the prescribed intervals, to the [Regulating Authority] regarding the exploration operations.

(2) No person may dispose of or destroy any record, borehole core data or core-log data contemplated in subsection (1)(a) except in accordance with written directions of the relevant [Officer of the Regulating Authority].

Article [_] Environmental management principles

(1) The principles set out in section [_] of the [National environmental legislation ] –

(a) apply to all exploration and mining operations, as the case may be, and any matter or activity relating to such operation; and

(b) serve as guidelines for the interpretation, administration and implementation of the environmental requirements of this [Act][Code][Law].

(2) Any exploration or mining operation must be conducted in accordance with generally accepted principles of sustainable development by integrating social, economic and environmental factors into the planning and implementation of exploration and mining projects in order to ensure that exploitation of mineral resources serves present and future generations.

Article [_] Integrated environmental management and responsibility to remedy

(1) The holder of a reconnaissance permission, exploration right, mining right, mining permit or retention permit –

(a) must at all times give effect to the general objectives of integrated environmental management laid down in the [relevant environmental legislation];

(b) must consider, investigate, assess and communicate the impact of his or her exploration or mining on the environment as contemplated in the [relevant environmental legislation];

(c) must manage all environmental impacts –

(i) in accordance with his or her environmental management plan or approved environmental management programme, where appropriate; and

(ii) as an integral part of the prospecting/reconnaissance, exploration or mining operation, unless the [Regulating Authority] directs otherwise;

(d) must as far as it is reasonably practicable, rehabilitate the environment affected by the exploration or mining operations to its natural or predetermined state or to a land use which conforms to the generally accepted principle of sustainable development; and

(e) is responsible for any environmental damage, pollution or ecological degradation as a result of his or her prospecting/reconnaissance, exploration or mining operations and which may occur inside and outside the boundaries of the area to which such right, permit or permission relates.

(2) Notwithstanding the [Companies Act], or the [other relevant legislation], the directors of a company or members of a close corporation are jointly and severally liable for any unacceptable negative impact on the environment, including damage, degradation or pollution.

Article [_] Financial provision for remediation of environmental damage

(1) The holder of an exploration right, mining right or mining permit must annually assess his or her environmental liability and increase his or her financial provision to the satisfaction of the [Regulating Authority].

(2) If the [Regulating Authority] is not satisfied with the assessment and financial provision contemplated in this section, the [Regulating Authority] may appoint an independent assessor to rehabilitate the closed mining or exploration operation in respect of latent or residual environmental impacts.

Annotation

Drawn from South Africa’s mining law (2002), this provision requires (for exploration licences called prospecting permits) compliance with all of the obligations noted above and also:

• Approval of an environmental management plan (as part of the licence grant process);
• Notification and consultation with the landowner or lawful occupier;
• Presentation of the licence to the Mining Licences office for registration;
• Commencement of exploration (called prospecting) activities within 120 days of the effective date of the licence;
• Maintenance of records, drilling logs, etc.; and
• Obtaining the [Regulating Authority]’s approval for any removal of bulk samples for testing.

This is a clear and comprehensive set of specific obligations of exploration licence holders.

25.6 Example 1:

Article [_]

(1) A prospecting licence confers on the holder an exclusive right to prospect for mining materials, within the boundaries of the holder's area, including surface area and depth of the right, as well as an exclusive right to dispose of any products extracted as part of said prospecting.

(2) It confers on the holder an exclusive right to request and obtain an operating licence, at any time during term of validity for the prospecting licence, if they have performed their obligations under the present Act, in the the event they discover one or more mineral deposits within the area under the prospecting licence.

(3) A prospecting licence constitutes a movable, indivisible right and, may not be subleased, subject of a pledge or a mortgage.

Article [_]

(1) A prospecting licence holder shall have the right to freely dispose of products extracted during the prospecting and assaying, provided that the prospecting work does not in fact constitute operating work.

(2) Disposals shall only be possible under the following conditions:

(a) the prospecting licence holder has made a prior declaration relating to the products extracted, to the Mining Department (Administration des Mines);

(b) the prospecting licence holder has paid the mining taxes relating to said extracted products, unless an exemption has been granted for the samples by the Mining Department and the Department for the Economy and Finance (Administration de l'Economie et des Finances).

(3) The maximum quantities of samples which may be collected shall be specified by decree.

Article [_]

The rights of a mining right holder shall relate to the entire extent of the demarcated area under the mining title, with no limit as to depth, extending down within vertical lines based on the defined area on the surface.

Article [_]

(1) A mining right may be assigned or transferred subject to the prior written approval from [the regulatory authority] and under the conditions provided for by decree.

(2) Any agreement for the transfer or assignment of a mining right must be subject to the condition precedent of said authorisation.

(2)The approval of [the regulatory authority] shall be automatic where the mining right holder has fulfilled their obligations under the [Code][Act][Law].

Annotation

Drawn from Côte d’Ivoire’s mining law (2014), this provision states that the exploration licence confers on the licence holder an exclusive right to explore for minerals other than industrial minerals and to apply for an exploitation permit to develop commercial deposits identified within the licence area. It is a generous provision in that the exploration licence includes an exclusive right as to all such minerals, rather than specific types or classes of minerals as in some mining laws. Furthermore, that exclusive right includes the right to apply for an exploitation licence for multiple deposits within the licenced area - as opposed to a single deposit as in some more restrictive mining laws - provided that the licence holder is in compliance with its obligations under the Mining Code.

According to this provision, the exploration licence holder has the right to dispose of products extracted during the course of exploration. However, such right is subject to the condition that the exploration work not constitute exploitation work, and to the further conditions that the licence holder (a) submits a declaration to the Regulating Authority prior to any such disposition and (b) pays the mining taxes (e.g. royalties) applicable to the mineral products. Exemptions from the mining tax payment obligation are to be granted for samples, the maximum amounts of which are to be set by regulation.

The exploration licence is not eligible for pledge, mortgage or sublease; but it may be transferred with the approval of the Regulating Authority, to which the licensee is entitled if in compliance with its obligations under the Mining Code.

25.6 Example 2:

Article [_]

(1) Subject to the provisions of this [Act][Code][Law] and the Regulations, an exploration licence confers on the holder the exclusive right to carry on exploration operations in the exploration area for minerals to which the licence applies.

(2) In the exercise of the rights conferred by this section, the holder may, subject to section [_] (on restrictions on the right of a mineral licence holder to enter land), either himself or by his employees or agents, enter upon the exploration area and erect camps and temporary buildings and may erect installations in any water forming part of the exploration area.

(3) The holder of an exploration licence for gemstones who in the course of carrying out exploration operations under the exploration licence recovers gemstones, may dispose of the gemstones by sale to a licenced dealer and shall promptly following any such sale submit particulars thereof to the [Regulating Authority], showing the name and business address of the dealer, a description of the stones, their weight and a copy of a receipt given by the purchaser for the price received.

(4) The holder of a an exploration licence for gemstones who recovers gemstones in the course of exploration operations shall for the purpose of holding the gemstones and selling them pursuant to subsection (3) be deemed to be a mineral right holder.

(5) The exploration licence holder is authorized to apply for a retention licence.

(6) The exploration licence holder is entitled to apply for and obtain a special mining licence or a mining licence, subject to compliance with the application requirements specified in other articles.

Annotation

Drawn from Tanzania’s mining law (2010), which calls an exploration right a prospecting licence, this provision provides for an exclusive exploration right that entitles the holder to enter the exploration area and erect camps and temporary buildings thereon in connection with the holder’s exploration activities. It also entitles the holder of a “prospecting” licence for gemstones to sell gemstones recovered during exploration to a licenced dealer. In the event of such sales, the prospecting licence holder is required to submit the particulars of the transactions to the Commissioner of Mines in order to enable the Mining Administration, among other things, to confirm that the licenced dealer has paid the applicable royalty, or enforce such payment by the dealer if it has not been made. The mining law provides that licenced dealers and licenced brokers are responsible for the payment of royalties on gemstones that they purchase.

This provision also authorizes the licence holder to apply for a retention licence and to apply for and obtain a “special mining licence” (which is long term) or a mining licence (which has a shorter term), subject to compliance with the relevant application requirements.

25.7 Example 1:

Article [_]

(1) Where an applicant is entitled to the grant of an exploration licence under the terms and conditions of this [Act][Code][Law], the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-

(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;

(2) In determining the date for the commencement of the period for which the licence is granted, the licensing authority may take account of any period not exceeding six months from the date of the grant which is required by the applicant to make any necessary preparations for exploration operations.

Annotation

Drawn from Tanzania’s mining law (2010), this provision reflects a progressive awareness of the potential need for a somewhat longer than normal exploration term as well the need to accomplish certain formalities and obtain certain approvals before actual exploration work can begin.

25.7 Example 2:

Article [_]

(1) Where the [Regulating Authority] is satisfied that an initial period is required to make the necessary preparations to carry on exploration operations he may, in an exclusive exploration licence, specify a period (not exceeding three months) as the preparation period.

(2) The term of an exclusive exploration licence is the period for which the licence is granted, not exceeding three years, stated in the licence, and any preparation period specified in the licence.

(3) The term of an exclusive exploration licence commences on and includes the date of the grant of the licence, as stated in the licence.

Annotation

Drawn from Malawi’s mining law (1981), this provision provides for the standard exploration term of up to three years, but also takes into account the potential need for a preparation period and provides for the possible incorporation of a preparation period of up to three months into the term of the exploration licence (called prospecting licence).

25.8 Example 1:

Article [_]

(1) Where an applicant is entitled to the grant of an exploration licence, the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-

(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;

(b) where application for renewal has been made by the holder in the prescribed form, for the first period of renewal for which the applicant has applied, a period not exceeding three years;

(c) where application for renewal has been made by the holder in the prescribed form, for the second period of renewal for which the applicant has applied, a period not exceeding two years;

(d) where the holder is not in default and at the end of the second period of renewal a further period is required to complete a feasibility study, already commenced by the holder, for such further period as may be reasonably required for that purpose, but not exceeding two years.

(2) A holder of the licence who intends to renew the licence shall, not later than one month before expiry date of the licence, submit an application for renewal of the exploration licence.

(3) The [Regulating Authority] shall, on application of the holder of a licence granted under subsection (1) of this section and on payment of prescribed fees for renewal, renew the exploration licence-

(a) at the end of the initial exploration period or, as the case may be, at the end of the first renewal period, for the period referred to in paragraphs (b) and (c) of subsection (1);

(b) at the end of the second renewal period, in a case falling under paragraph (d) of subsection (1), for the period required to complete the feasibility study.

(4) The obligation of the [Regulating Authority] to renew an exploration licence is subject to the condition that-

(a) the holder is not in default except that the [Regulating Authority] shall not reject an application to renew an exploration licence on the grounds that the holder is in default, without first serving on the holder a notice giving particulars of the default and requiring the holder within a reasonable time specified in the notice to remedy the default; and

(b) the holder, on renewal under paragraph (a) of subsection (3), has relinquished in the case of a first renewal fifty per centum of the area held during the initial exploration period and in the case of a second renewal fifty per centum of the balance, and has by notice in writing to the [Regulating Authority] given a sufficient description of the areas he is relinquishing.

(5) The relinquished areas shall be displayed on the notice board at the [[Regulating Authority] headquarters and local offices on a monthly basis.

(6) An exploration licence for gemstones other than kimberlitic diamonds, and an exploration licence for building materials shall subsist for one year from the date of grant and shall not be subject to renewal.

(7) The obligations of the [Regulating Authority] under paragraph (b) of subsection (4) shall not apply in the case where the exploration area is not more than twenty square kilometres.

Annotation

Drawn from Tanzania’s mining law (2010), this provision clearly states the conditions under which the exploration (called prospecting) licencee is entitled to renewals, when the applications must be filed, and the length of the renewal terms.

The terms of exploration licences for metallic and processed minerals decline from 4 years to 3 years for the first renewal and 2 years for the second and third renewals. (For gemstones other than diamonds, there is only a one-year initial term, non-renewable.) An exploration licence for such minerals can therefore be held for up to 11 years in Tanzania, which also provides for the issuance of a retention licence for a term of 5 years, renewable once for a like term, if the required justification is demonstrated. Reduction of the surface area by half is required at each renewal, but not below 20 square kilometres.

By contrast, the one-year terms of exploration licences for gemstones other than kimberlitic diamonds and for building materials are not renewable.

25.8 Example 2:

Article [_]

(1) The holder of an exploration licence may, not later than ninety calendar days before the initial expiry of the licence, apply to the Mining Cadastre Office for a first renewal of the licence in respect of not more than one hundred and twenty-five square kilometres of the exploration licence area, except that where the results of exploration to date strongly indicate the presence of widespread mineralisation such that a surrender to one hundred and twenty-five square kilometres would result in some highly prospective areas being surrendered, the [Regulating Authority], on the advice of the Minerals Advisory Board, may exceptionally allow such areas constituting more than one hundred and twenty five square kilometres to be retained.

(2) An application for the first renewal of an exploration licence-

(a)shall be accompanied by-

(i)a detailed annual report as prescribed describing all operations carried out in the previous year together with an annual financial report for the same period, plus a surrender report as prescribed, covering in detail all work carried out over any portion of the ground to be surrendered and accompanied by all results, data, information and interpretation since the grant of the exploration licence;

(ii)a proposed programme of exploration operations to be carried out during the period of first renewal and the estimated cost thereof;

(iii)a plan identifying that part of the exploration licence area for which renewal is sought; (iv)a description of the contiguous blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner; and

(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs [_] of section [_] (on the required elements of an application for an exploration licence).

(3) The Mining Cadastre Office shall forward an application for the first renewal of an exploration licence to the Minerals Advisory Board.

(4) Upon receipt of a completed application for the renewal of an explorations licence from the Mining Cadastre Office, where the [statutory advisory board] has determined that an application for the renewal of an exploration licence has met all the criteria for such licence the [statutory advisory board] shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.

(5) The [Regulating Authority] shall, subject to all prescribed criteria of this [Act][Code][Law] and of the regulations, on the certified advice of the Minerals Advisory Board, renew the licence for the reduced area applied for with or without variation of the conditions of the initial licence, for a period not exceeding three years.

(6) The holder of an exploration licence may, not later than ninety calendar days before the expiry of a once-renewed licence apply to the Mining Cadastre Office for a second renewal of the licence.

(7) An application for the second renewal of an exploration licence-

(a)shall be accompanied by-

(i)a report on exploration operations carried out so far and the direct costs incurred thereby;

(ii)a proposed programme of exploration operations, feasibility studies, and environmental impact assessments to be carried out during the period of second renewal and the estimated cost thereof;

(iii)a plan identifying that part of the exploration licence area for which renewal is sought, which shall not be greater than one hundred and twenty-five square kilometres unless it can be conclusively demonstrated that to do so would unavoidably exclude part of an economically recoverable mineral deposit;

(iv)a description of the blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner;

(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs [_] of section [_] (on the required elements of an application for an exploration licence); and

(c)shall provide evidence that a mineral discovery has been made that may be of commercial value.

(8) The Mining Cadastre Office shall forward an application for the second renewal of an exploration licence to the Minerals Advisory Board.

(9) Upon receipt of a completed application for the second renewal of an explorations licence from the Mining Cadastre Office, where the Minerals Advisory Board has determined that an application for the second renewal of an exploration licence has met all the criteria and where the holder of an exploration licence who has made and reported a discovery of possible commercial value, the Board shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.

(10) The [Regulating Authority] shall on the certified advice of Minerals Advisory Board confirming all prescribed criteria of this [Act][Code][Law] and of the regulations have been met, renew the licence for a period not exceeding two years.

(11) The applicant shall be notified in writing of the decision on renewal applications, and if an application is refused, the [Regulating Authority] shall give reasons for such refusal.

(12) Where the [Regulating Authority] has refused an application to renew an exploration licence that is renewable and the cause given by the [Regulating Authority] for such refusal can be remedied by the holder of the licence, if the cause has been remedied with thirty calendar days of receiving the notice under subsection (11), the licence holder may reapply for a renewal of the licence within such thirty day period.

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision sets the initial exploration term of four years that can be renewed twice for 3 years and 2 years respectively. This gradual reduction in term length encourages the licence holder to focus on the most prospective sites within the licenced area and to conduct its exploration program expeditiously.

Unlike Tanzania, Sierra Leone’s mining law does not provide for a retention licence. Thus, an exploration licence may be held for a maximum period of 9 years in Sierra Leone. That period is likely to be sufficient for the identification of a small to medium sized commercial deposit and completion of the requisite environmental and feasibility studies in order to progress to the exploitation phase, but the 9 year limit may be problematic for the detailed study of a complex or very large scale deposit in a challenging environment.

The article requires a mandatory reduction in size of the area to a maximum of 120 square kilometers for the first renewal that may be waived upon the requisite showing to the Minerals Advisory Board and the Regulating Authority. No further reduction of area is required for the second renewal.

Renewals are not automatic under Sierra Leone’s law. The licence holder is required to submit a detailed annual report of operations carried out and results achieved, as well as a proposed exploration work program for the requested renewal period. The renewal must be approved by the Minerals Advisory Board.

25.9 Example 1:

Article [_]

(1) The [Regulating Authority}, or any person authorised by the [Regulating Authority], may, in writing, order reconnaissance, exploration or mining operations to be temporarily suspended on an emergency basis, regardless of whether such operations are authorized by a mineral right, until such arrangements are made that are in the Regulating Authority’s opinion necessary to prevent danger to life, property or the environment or to comply with this [Act][Code][Law].

(2) The Regulating Authority may cancel or vary the terms of any temporary suspension order.

(3) The [Administrative Reviewer] shall have the power to confirm a temporary suspension order made by the [Regulating Authority] and may not delegate this power.

(4) A temporary suspension order shall lapse after twenty one days of its issuance, unless it is confirmed, in writing, by the [Administrative Reviewer].

(5) The [Administrative Reviewer] after consultation with the [statutory advisory body] may suspend a mineral right if the holder-

(a) fails to make any of the payments required by or under this [Act][Code][Law] on the date due;

(b) fails to meet any prescribed minimum annual programme of work or work expenditure requirement;

(c) grossly violates health and safety regulations or causes environmental harm;

(d) employs or makes use of child labourers;

(e) fails to submit reports required by this act;

(f) contravenes any of the provisions of this [Act][Code][Law] or the conditions of his mineral right or the provisions of any other enactment relating to mines and minerals;

(g) dies and his heir or successor in title is not qualified under this [Act][Code][Law] to hold the mineral right, unless an application is received from the heir or successor within ninety days of the death to transfer the right to a third party who is so qualified and accepts all duties under the right;

(h) becomes an un-discharged bankrupt or becomes of unsound mind;

(i) makes any statement to the [Administrative Reviewer] in connection with his mineral right which he knows or ought to have known to be false;

(j) fails to substantially comply with the terms of a community development agreement when required by this [Act][Code][Law] to do so;

(k) for any reason becomes ineligible to apply for a mineral right under section [_] (on eligibility rules).

(2) The [Administrative Reviewer] shall, before suspending any mineral right give notice to the holder in such a manner as shall be prescribed and shall, in such a notice require the holder to remedy in not less than thirty calendar days any breach of the conditions of his mineral right.

(3) If the holder of a mineral right fails to remedy any failure or contravention specified in paragraphs (c), (d) and (k) of subsection (1), the [Regulating Authority] may, by notice to the holder thereof, suspend the mineral right forthwith.

(4) The powers of the [Regulating Authority] under this section shall, in relation to artisanal mining licences, be exercised by the Regulating Authority but the Regulating Authority need not consult the [statutory advisory board].

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision is designed to apply to reconnaissance, exploration or mining licences. That is appropriate insofar as there can be a risk of dangerous activity taking place under a prospecting/reconnaissance or exploration licence and there is no apparent reason to be more tolerant of any of the stated grounds for suspension based on the type of licence under which they have occurred.

This provision makes the distinction between suspension of operations pending remediation of a condition that constitutes a danger to life, property or the environment or is in non-compliance with the mining law, on the one hand, and suspension of a mineral licence as a precursor to potential cancelation of the licence in the event of non-remediation of any of the reasons listed, on the other hand. Whereas suspension of operations is not preceded by prior notice and an opportunity to remedy the cause of the suspension, prior notice and such opportunity are required in the case of suspension of the licence.

The Administrative Reviewer is the supervisory authority immediately superior to the Regulating Authority in the administrative hierarchy.

This provision represents, in general, a balanced approach to protecting the interests of the State and affected stakeholders from harm in a manner consistent with providing security of title to the licence holder. Failures to comply with specific obligations of the licence holder are sanctioned initially by suspensions of operations or rights, as the case may be, and the offending licence holder is encouraged and given the opportunity to establish compliance before action to cancel the licence is taken. Because of the breadth of some of the grounds stated for ultimate cancellation of the licence, the provision may heighten the risk of loss of title more than necessary. This could be attenuated by limiting the grounds for cancellation of the licence whilst maintaining broader grounds for temporary suspension of operations which is a costly sanction in itself.

25.9 Example 2:

Article [_]

(1) Any serious offence, as defined in the Mining Regulations, which is committed by the holder shall be penalised with the immediate suspension of work, decided on by [the regulatory authority], subject to prior written notice having been given.

(2) The duration of the suspension shall be set in the regulations, according to the seriousness of the offence and its impact on the environment, public health and/or safety.

(3) To remedy said serious offence, [the regulatory authority] may, ex officio or at the request of the local authorities concerned, require that the holder carry out such works which it deems necessary in order to protect public health, the environment, workers or neighbouring mines. Should the holder fail to perform within the required time period, [the regulatory authority] may have said work carried out by a third party, at the holder's expense.

Article [_]

(1) Should it be duly found that the required documents prescribed by the present [Code][Act][Law] have not been kept in proper order, [the regulatory authority] shall send a written warning to the mining operator concerned, if this failure to comply does not constitute an offence.

(2) Should the holder repeat the offence, their activities may be suspended by the Minister, after notice to comply has been given, for a period of three months, and the holder fails to comply.

(3) At the end of the suspension period, [the regulatory authority] shall carry out an audit. If it is found that the holder is now compliant, the suspension shall be lifted. If not, it shall be renewed for a further period of three months.

(4) If the holder remains in default on expiry of the second suspension period, the holder shall be subject to a penalty, the total amount of which, in [national currency], shall be equivalent to [_] [currency] per day or part thereof, until the procedural defect has been cured.

Annotation

Drawn from the DRC Mining Code (2002), these provisions represent a different approach to suspension. The first article provides for a suspension of work as a sanction for any “serious failure”. The provision delegates to the mining regulation the definition of “serious failure” and the length of the suspension, which is to be a function of the seriousness of the failure and its effect on the environment and public health and safety. The provision authorizes the Mining Administration to undertake the necessary remedial action if the licence holder fails to do so, at the licence holder’s expense.

The second article provides for suspension of operations for three months as the sanction for a repeated failure by the licence holder to maintain required documentation. In such case, a warning and opportunity to remedy is provided before the imposition of the suspension order. The suspension is extended for a second period of three months if the underlying cause is not remedied by the end of the initial suspension period; and if still not remedied at the end of the second suspension period, a fine of USD 500 per day is levied against the licence holder until the documents are properly maintained.

The suspensions do not ultimately lead to cancellation of the licence in either case. This approach represents a philosophy that a costly sanction that does not involve loss of rights is more conducive to remediation and compliance, as well as more attractive to long term investment, than a sanction that leads to cancellation of rights. However, it does involve a risk that the Mining Administration will not be able to cancel the mineral licence of a holder that repeatedly fails to remedy a serious violation but nevertheless complies with the obligations (stated elsewhere) necessary to maintain the licence in effect.

25.10 Example 1:

Article [_]

(1) Any right, permit, permission or licence granted or issued in terms of this [Act][Code][Law] shall lapse, whenever –

(a) it expires;

(b) the holder thereof is deceased and there are no successors in title;

(c) a company or close corporation is deregistered in terms of the relevant acts and no application has been made or was made to the [Regulating Authority] for the consent in terms of section [_] (requiring the consent of the Administrative Reviewer for transfers of mineral rights) or such permission has been refused;

(d) save for cases referred to in section [_] (establishing an exception to the consent requirement for certain mortgages and security interests), the holder is liquidated or sequestrated;