Just thought this could be of interest to FAR holders as a Senegal government point of view...
copied from another thread, thank you to poster Gaia, cheers
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gaia
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Date:
01/11/16
Time:
08:44:08
Post #:
20272199
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Senegal passes a new mining code
Senegal October 31 2016
The Parliament of Senegal passed a new Mining Code, No. 27/2016 on the Mining Code yesterday (30 October 2016).
The new Mining Code (new Code) will apply to new applications with the provisions of the 2003 Mining Code (current Code) continuing to apply to existing permits.
Key changes from the current Code to the new Code include:
Length of mining permits
Under the new Code, a small mine permit will be issued for an initial term of 5 years (previously 3 years under the current Code). The term may be renewed for 3 years at a time without any limit on the number of renewals.
A mining permit will be issued for an initial term of between 5 and 20 years (depending on the mineral reserves identified and the investment required); this is less than the maximum 25 years for an initial permit under the current Code. Mining permits will be renewable as many times as necessary until the resource is exhausted.
Changes to fees, royalites, taxes and tax relief
Under the new Code:
Fees such as entry fees and qurry permits will increase.
An annual surface royalty has been introduces, payable by all mining title holders.
In 2012, most taxes relating to the mining sector were moved from the current Code to the General Tax Code. This continues under the new Code, except for the specific “mining tax”. Under the new Code, mining activities will be subject to a quarterly tax levied on the market value of the commercialized product. Rates for some common substances include iron ore (concentrate 5%, locally processed 2%); phosphate (calcium-aluminate and lime phosphate 5%, phosphoric acid 1.5%) and gold 1.5%.
Mining title holder will continue to be exempt from all taxes and fees, including value-added tax (VAT) and the COSEC port charge during the period commencing on the date of entry into force of the mining permit (or small mine permit) and ending on the first date of commercial production (Investment Period). However, the exemption will not apply to the statistical royalty, community solidarity royalty and other community taxes (rates for these taxes are not defined in the new Code).
The introduction of production sharing agreements
The new Code permits the state of Senegal and a mining company to enter into a production sharing agreement. This gives the mining company the exclusive right to research and mine a particular area and recover the cost of doing so from sale of the mined substance. The profits from the sale of the product are split between the State and the mining company in an amount specified in each individual agreement. Where a production sharing agreement exists, the mined substance will not be subject to the quarterly mining tax outlined above.
The creation of local development funds
The new Code introduces an obligation for mining title holders to contribute annually to a local development fund
Entry fees for the grant of small mine permits and mining permits, as well as fees for research permits, semi-mechanised authroisations and quarry permits will increase under the new Code.
The new Code introduces an annual surface royalty payable by all title holders, including holders of research permits and quarry permits. These will be 50,000 CFA per hectare for a small mine permit and 250,000 CFA per square kilometer for a mining permit.
Most taxes relating to the mining sector were previously moved from the 2003 Mining Code to the General Tax Code in 2012. However, the specific “mining tax” that is included in the current Code will continue in modified form under the new Code. The mining tax under the new Code is structured so that the all authroised mining activities will be subject to a “quarterly mining tax” levied on the market value of the commercialized product. The tax rate will vary depending on which substance is being mined. Rates for some common substances include iron ore (concentrate 5%, locally processed 2%); phosphate (calcium-aluminate and lime phosphate 5%, phosphoric acid 1.5%) and gold 1.5%.
Production sharing agreements
The new Code permits the state of Senegal and a mining company to enter into a production sharing agreement. Such an agreement gives the mining company the exclusive right to research and mine a particular area and recover the cost of doing so from sale of the mined substance. The profits from the sale of the product are split between the State and the mining company in an amount specified in each individual agreement. Where a production sharing agreement exists, the mined substance will not be subject to the quarterly mining tax outlined above.
Enhanced social and environmental obligations
The new Code introduces an obligation for mining title holders to contribute annually to a local development fund in the amount of 0.5% of sales, minus "annual fees" (unspecified). The local development funds are to promote the economic and social development of local communities residing around mining areas, and must include women's empowerment projects.
Under the new Code, small mine permit holders will be required to provide a guarantee as security for the cost of rehabilitating their mine site. Small mine permit holders under the current Code are not required to do this. Obligations for mininh permit holders remain the same (to deposit funds in a trust account with a Senegalese bank that will be used to rehabilitate the mine site).
Under the new Code, all mining title holders are required to:
respect, protect and implement human rights in areas affected by mining operations;
respect the provisions of the Forestry Code where the mining title has been granted over a "classified forest zone"; and
respect the principles and obligations under the Extractive Industries Transparency Initiative (EITI), such as declaring all payments made to the State to the EITI authorities.
The passing of the new law follows a three year consultation and legislative drafting process and introduces many initiatives that have been used within the region.
The bill will now be presented to the President for promulgation and after that time, it will be published in the national gazette.
http://www.lexology.com/library/detail.aspx?g=8fa264ec-3140-4f01-a874-d3f7d9f14c31
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