Senegal: Mining Comparative Guide

1 Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?

The new Mining Code established by Law 2016-32 dated 8 November 2016 and its Implementing Decree 2017-459 dated 20 March 2017 are the main statutes that govern mining in Senegal.

The former Mining Code established by Law 2003-36 dated 24 November 2003 and its Implementing Decree 2004-647 dated 17 May 2004 govern mining permits granted prior to the effective date of the new Mining Code.

In addition, and without being exhaustive, the following statutes apply to mining:

• Decree 2009-1334 dated 30 November 2009 setting out the rates and the distribution methods of funds to support local communities and its amending Decree 2015-1879 dated 16 December 2015; and
• Decree 2009-1335 dated 30 November 2009 setting out the methods for the rehabilitation funds of mining sites.

1.2 When was the mining legislation last reviewed?

The mining legislation was last reviewed in 2016 with the adoption of the new Mining Code.

1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?

Without being exhaustive, the following legislative and regulatory provisions also have relevance for mining operations in Senegal:

• the Constitution dated 22 January 2001, as amended by referendum in 2016;
• the General Tax Code;
• the Customs Code;
• the Investment Code;
• Law 2001-01 dated 15 January 2001 relating to the Environment Code and its Implementing Decree 2001-282;
• Law 81-13 dated 4 March 1981 relating to the Water Code;
• Law 2018-15 dated 12 November 2018 relating to the Forestry Code;
• Law 97-17 dated 1 December 1997 relating to the Labour Code;
• Law 97-05 dated 10 March 1997 relating to the social security fund;
• Law 64-46 dated 17 June 1964 on public land;
• Law 76-67 dated 2 July 1976 relating to expropriation for public utility and other land operations of public utility;
• Law 2013-10 dated 28 December 2013 on the General Code of Local Communities; and
• the 2016 Mining Sector Policy Letter.

1.4 Are there any regional treaties or laws that need to be taken into account?

As Senegal is a member of the African Union, the Economic Community of West African States (ECOWAS), the West African Economic and Monetary Union (WAEMU) and the Organization for the Harmonization of Business Law in Africa, the following must also be taken into account in respect of mining:

• the Vision of the Mining Regime of Africa in 2050 of the African Union, adopted in 2009;
• Additional Act 01/2000 dated 14 December 2000 relating to the Common Mining Policy of the WAEMU;
• Regulation 18/2003/CM/UEMOA dated 23 December 2003 relating to the Community Mining Code of the WAEMU;
• Additional Protocol 2 relating to WAEMU sectoral policies as well as ECOWAS Directive C/DIR3/05/09 dated 27 May 2009 on the harmonisation of guiding principles and policies in the mining sector; and
• the Bamako Convention on the prohibition of the import of hazardous waste and the control of transboundary movements of hazardous waste within Africa, dated 30 January 1991.

In addition, Senegal has ratified several international conventions, including the following:

• the United Nations Framework Convention on Climate Change;
• the Convention on Migratory Species of Wild Animals;
• the Convention on Biological Diversity;
• the Ramsar Convention on Wetlands;
• the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal;
• the Stockholm Convention on Persistent Organic Pollutants; and
• the Minamata Convention on the Progressive Ban of Mercury.

1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?

The following bodies are responsible for enforcing the applicable mining laws and regulations:

• The Ministry of Mines is in charge of drafting and enforcing laws for developing the mining sector, signing mining conventions and promoting and controlling mining activities.
• The Directorate for the Control and Supervision of Mining Operations is responsible for controlling and monitoring the execution of research and exploitation operations, and for collecting related data throughout the territory.
• The Ministry of Environment enforces the mining laws and regulations through:
• • the Department of Environment and Classified Establishments, whose mission is to prevent and control pollution and nuisances; and
  • the Environmental Impact Assessment Division, whose role is to validate the terms of reference for environmental impact assessments of mining projects and to monitor the implementation of environmental management plans drawn up by mining companies.
• The police are in charge of investigating potential violations of the Mining Code and establishing the existence of such violations.
• The regional mining services are the state administrative structures responsible for enforcing laws and regulations relating to the mining sector in their respective localities.

The following authorities also have the power to control the enforcement of mining law and regulations where relevant:

• The Ministry of Finance controls and enforces the taxes applicable to mining; and
• The Ministry of Labour, through the regional labour and social security inspectorates, is responsible for ensuring the application of social legislation.

1.6 What is the regulators' general approach in regulating the mining sector?

The general aim of the Senegalese state is to make Senegal one of the most attractive West African countries for mining operators. The adoption of the new Mining Code is part of this initiative. In this regard, the new Mining Code has introduced innovations such as the production sharing agreement and is considered more stringent than the former Mining Code in terms of transparency and control of mining activities.

2 Mining industry

2.1 How mature is the mining industry in your jurisdiction?

The mining industry in Senegal is of average maturity. The discovery of gold in the east of the country (Kédougou), the exploitation of zircon in Diogo (in the centre of the country, in the Thiès region), and the exploitation of phosphate and quarry mines have promoted the development of the mining sector of Senegal.

2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?

Senegal has significant potential for mineral substances including precious metals (gold and platinoids), base metals (iron, copper, chromium, nickel), industrial minerals (eg, phosphates, industrial limestone and barite), heavy minerals (zircon and titanium), ornamental stones and building materials.

The mining sites are mainly located in the central west regions (Dakar, Thiès and Diourbel), in the south (Casamance), in the east (Tambacounda and Kédougou) and in the north (Matam).

2.3 Are any minerals deemed strategic and, if so, what impact does this have?

Gold, zircon and phosphate are deemed strategic.

According to the 2018 Extractive Industries Transparency Initiative report, the mining sector remains the primary contributor to the extractive income of the state budget. Revenues from the mining sector increased in 2018 as a result of the export value and world prices of gold and zircon.

The production of zircon by Grande Côte Opération has significantly increased in Senegal and has resulted in new infrastructure (eg, power plants and railways). Grande Côte Opération has made significant investments for the benefit of Senegal, including:

• the development of a 30,000 square metre storage terminal with a mobile conveyor at the Autonomous Port of Dakar;
• the construction of a 36 megawatt power plant; and
• the rehabilitation of a 110 kilometre railway track from Mekhé to Tivaouane, Thiès and Dakar at a cost of XAF 25 billion.

The exploitation of phosphate is part of a key project set out by the state in its 2016 Mining Sector Policy Letter. The aim is to make Senegal one of the world's top three producers of phosphate by 2023.

2.4 Who are the key players in the mining industry in your jurisdiction?

Phosphate mining:

• Industries Chimiques du Sénégal (ICS), which is managed by Indian company INDORAMA; and
• Société Minière de la Vallée du fleuve, Baobab Mining and Chemical Corp SA, which started production in 2016; and SEPHOS, which operates a small mine.

Gold mining:

• Teranga Gold Corporation, through its Senegalese subsidiary Sabodala Gold Operations;
• Petowal Mining Company SA, which bought the Mako mine from Toro Gold, leading to an estimated gold resource of 1.4 million ounces with a reserve of 1 million ounces at an average grade of 2.25 grams per tonne; and
• AGEM IAMGOLD, which has signed a 20-year concession with the government of Senegal to operate the Boto gold mine (located further east along the border with Mali), with a capacity to produce an average of 130,000 ounces of gold annually over an 11-year mine life.

Zircon mining:

• Grande Côte Opérations (GCO), a subsidiary of TiZir (equally owned by ERAMET and Mineral Deposits Limited-MDL), which enabled Senegal to become a zircon-producing country.

2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?

The other existing mining titles are as follows:

• a small-scale operating authorisation, which is limited to a 500-hectare mining area;
• a semi-mechanised operating authorisation, which is issued to carry out mining operations on an area of less than 50 hectares; and
• an artisanal mining authorisation, which is issued to individuals for an initial period of five years and can be renewed several times for further five-year periods.

3 Exploration rights

3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

The following licences are required to undertake prospecting and exploration activities:

• A prospecting authorisation confers on the holder a non-exclusive right to prospect for the mineral substances covered by the authorisation throughout the authorised area. A prospecting authorisation can cover any type of mineral (with the exception of minerals found in quarries) and is not generally subject to location restrictions. However, the Ministry of Mines can prohibit, in the public interest, prospecting for one or several minerals in all or part of the territory of Senegal for a specified period.
• An exploration permit confers on the holder the exclusive right to explore for the mineral substances for which it is issued. An exploration permit can cover any type of mineral, with the exception of minerals found in quarries, which are subject to separate authorisation, and is not subject to location restrictions, unless it is granted within a promotional zone following a tender launched by the state. A company cannot hold more than two exploration permits for the same mineral.
• A production sharing agreement (PSA) entered into between the Ministry of Mines and a contractor grants the contractor an exclusive exploration authorisation to carry out its obligations thereunder. A PSA can be granted only for promotional zones, unless the holder of a permit for a mining area located outside a promotional zone opts to conduct the mining activities under a PSA. The PSA is approved by way of a decree and contains its validity period which is set by the parties.

3.2 What requirements must be satisfied to obtain a licence?

Applicants for a prospecting authorisation or exploration permit must have sufficient technical and financial capacities to conduct the relevant activities.

Applicants must also follow the application procedure set out in question 3.3.

With regard to a PSA, a contractor:

• can be an individual, a Senegalese-based entity or a foreign entity; and
• must have sufficient technical and financial capacity to conduct the relevant activities.

3.3 What is the procedure for obtaining a licence? How long does this typically take?

Prospecting authorisation: The application dossier must be filed in triplicate and contain the following documents:

• an application letter;
• the constitutional documents of the applicant (ie, tax identification number, memorandum and articles of association, corporate registration number from the companies register, shareholders' and managers' information, financial statements from the last three years, and information on technical and financial capacity);
• the purpose, location and duration of the planned prospecting activities; and
• a brief description of the planned works programme, the technical methods to be used and the expected results.

The procedure is as follows:

• The application dossier is filed with the mining administration, which issues the prospecting authorisation.
• The Mining Code specifies a deadline for the issuance of the prospecting authorisation. Generally, the procedure takes 15 to 30 working days, which may be subject to administrative delay. The prospecting authorisation specifies the receipt date of the application, the identity of the applicant and the purpose, duration and location of the prospecting activities.
• No fees are charged to file the application.

Exploration permit:The application dossier must be filed in triplicate and contain the following documents:

• an application letter;
• the constitutional documents of the applicant (ie, tax identification number, memorandum and articles of association, corporate registration number from the companies register, shareholders' and managers' information, financial statements from the last three years, and information on technical and financial capacity);
• a designation of the minerals;
• a map of Senegal from 1/200,000 to 1/50,000 indicating the location of the area of the requested permit;
• a plan of the requested area at the appropriate scale of 1/5,000 or 1/000, drawn up by an approved surveyor and approved by the land registry of the area;
• a description of the planned works and the technical methods to be used; and
• a report containing technical information on the initial status of the exploration site and its environment.

Additional documents may be requested from the applicant as and when the assessment progresses.

The procedure is as follows:

• The application dossier is filed with the mining administration, which acknowledges receipt.
• The dossier is assessed by the mining administration and the applicant is notified of its admissibility.
• The applicant is invited to attend a joint study of the application within 15 days of notification of its admissibility.
• The mining convention is negotiated within three months of notification of its admissibility. The application is considered rejected if the negotiation fails within this period.
• The negotiated mining convention is sent to the minister of finance for his or her opinion. The minister has 21 days from the date of the opinion request to issue his or her favourable opinion.
• The mining convention is signed by the applicant and the minister of mines within 21 days of receipt of the minister of finance's opinion or the expiry of the 21-day period granted to the Ministry of Finance.
• The exploration permit is issued within 21 days of signing of the mining convention.
• Entry fees are paid amounting to XAF 2.5 million and a surface royalty amounting to XAF 5,000 per square kilometre, per year for the first validity period.

PSA: The application dossier for an exclusive exploration authorisation must be filed in triplicate and contain the following documents:

• an application letter;
• the constitutional documents of the contractor (ie, its tax identification number, memorandum and articles of association, corporate registration number with the companies register, shareholders' and managers' information, financial statements of the three last years and information on technical and financial capacity);
• a designation of the minerals;
• a map of Senegal from 1/200,000 to 1/50,000 indicating the location of the area of the requested permit;
• a plan of the requested area at the appropriate scale of 1/5,000 or 1/000 drawn up by an approved surveyor and approved by the land registry of the area;
• a description of the planned works and the technical methods to be used; and
• a report containing technical information on the initial status of the exploration site and its environment.

The procedure is as follows:

• The application dossier for an exclusive exploration authorisation is assessed by the mining administration and the contractor is notified of its admissibility.
• The PSA is negotiated with the minister of mines within three months of notification of the admissibility of the application.
• The negotiated PSA is sent to the minister of finance for his or her favourable opinion. The minister has 21 days from the date of the opinion request to issue his or her favourable opinion.
• The PSA is signed by the applicant and the minister of mines within 21 days of receipt of the minister of finance's opinion or the expiry of the 21-day period granted to the minister.
• The PSA is approved by way of a decree.

3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

Please see question 3.2.

3.5 What fees and other charges are incurred in obtaining a licence?

The issuance of a prospecting authorisation and an exclusive exploration authorisation is not subject to the payment of any fees.

The issuance of an exploration permit is subject to the payment of:

• entry fees amounting to XAF 2.5 million;
• a surface royalty amounting to XAF 5,000 per square kilometre, per year for the first validity period; and
• the possible reimbursement of historical costs to the state or the relevant publicly owned entity.

A PSA may be subject to the reimbursement of historical costs to the state or the relevant publicly owned entity.

3.6 What is the duration of a licence? What is the process for renewal?

Prospecting authorisation: A prospecting authorisation is issued by the mining administration and is valid for a period that cannot exceed six months. It may be renewed once, subject to the compliance of its holder with its obligations.

The renewal application must be filed with the mining administration at least seven days prior to expiry of the authorisation, along with the following documents:

• a report on the works performed and the results obtained; and
• a programme on the additional works to be undertaken.

The new Mining Code does not provide any specific deadline for renewing the prospecting authorisation. Generally, the procedure takes 15 working days, although this may be subject to administrative delay.

Exploration permit: An exploration permit is issued by order of the minister of mines for an initial period of four years. It is renewable twice for further four-year periods by order of the minister.

The renewal application must be filed at least two months prior to expiry of the permit, along with the following documents:

• information on the exploration permit for which renewal is requested;
• all supporting documents relating to the payment of royalties and fees;
• the amount of annual expenditure which the permit holder undertakes to spend during the entire period of renewal of the permit;
• the coordinates and area of any proportion of the initial residual perimeter returned by the holder in accordance with Article 18 of the Mining Code;
• an extract from a map of Senegal at 1/50,000 or 1/200,000 indicating the configurations of the perimeter of the exploration permit to be renewed and the area returned;
• a general report on the exploration activities carried out during the period of validity of the exploration permit, including the results, drillings and analyses, as well as the plans, logs and sections drawn up;
• a technical report on the continuation of the planned work and the research methods to be used;
• a certified financial report; and
• a report on the summary assessment of the environmental state of the research site.

The renewal procedure is as follows:

• The dossier is assessed by the mining administration and the applicant is notified of its admissibility.
• The renewed exploration permit is issued by order of the Ministry of Mines within 21 days of the notification of admissibility.
• Entry fees are paid amounting to XAF 2.5 million and a surface royalty amounting to XAF 6,500 per square kilometre, per year for the first renewal period; and XAF 2.5 million and a surface royalty amounting to XAF 8,000 per square kilometre, per year for the second renewal period.

PSA: The duration of the PSA is set out in the contract itself and covers the exploration and exploitation period. PSAs are not subject to renewal. Instead, the Mining Code provides that the procedure for renewing an exclusive exploration authorisation (the permit that comes with a PSA) is the same as that for the exploration permit. While the Mining Code and its implementing decree are silent on the duration of an exclusive exploration authorisation, the latter should be renewed several times and transformed into an exclusive exploitation authorisation (in case of discovery of commercially viable deposit) during the validity period of the PSA.

3.7 What are the operator's rights and obligations under the licence?

Prospecting authorisation: A prospecting authorisation confers on its holder a non-exclusive right to prospect for the minerals covered by the authorisation throughout the authorised area.

Exploration permit: An exploration permit confers on its holder an exclusive right to explore for the minerals for which the permit is issued. The holder is further subject to the following obligations:

• to commence the exploration works within six months of notification of grant of the exploration permit to the applicant;
• to collect samples, subject to a prior declaration to the mining administration and to the extent that the works do not lead to exploitation works;
• to spend the approved minimum amount;
• to submit notification of the works performed and the results obtained to the mining administration;
• to apply for an exploitation permit, subject to confirmation of the existence of a commercially viable deposit and compliance with the work obligations;
• to apply, with priority, for the issuance of an exploration permit in relation to other minerals discovered within the mining area covered by the existing exploration permit, subject to the declaration of such discovery to the Ministry of Mines within 10 days;
• to undertake assessment works within one year of the discovery of commercially viable deposits and evidence of whether the deposit is commercially viable;
• to take all necessary measures to protect the environment;
• to open an account to be held in escrow with a public entity duly designed by the state for the rehabilitation of the mining site;
• to carry out an environmental study; and
• to comply with the Forestry Code, if the exploration permit is issued within a protected area.

The mining convention entered into with the Ministry of Mines will set out more detailed obligations.

PSA: The PSA sets out the rights and obligations of the parties. Among other things, it provides for the following:

• the conditions under which the works programme and the control of works are to be carried out;
• the procedure under which commercially viable deposits are to be exploited;
• the modalities for cost recovery and production sharing;
• obligations to employ and train local employees;
• the participation of the state;
• dispute resolution; and
• environment protection measures.

3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?

Prospecting authorisation: Renewal of a prospecting authorisation is not subject to any relinquishment requirements.

Exploration permit: Each renewal of an exploration permit results in the reduction by one-quarter of the area covered by the permit.

3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Prospecting authorisation: A prospecting authorisation cannot be transferred.

Exploration permit: An exploration permit may be transferred, except during its first validity period. Transfer is subject to the approval of the minister of mines. The mining convention attached to the transferred exploration permit is subject to the registration formalities and the payment of capital gains tax with the tax authority.

PSA and exclusive exploration authorisation: The new Mining Code provides that the transfer of an exclusive exploration authorisation is the same as that for the transfer of an exploration permit.

3.10 Does an exploration licence give any priority when applying for a mining right?

Yes, subject to confirmation of the existence of a commercially viable deposit and compliance with the work obligations and the mining legislation.

4 Mining rights

4.1 How is ownership of mining rights determined in your jurisdiction?

Ownership of mining rights is determined by the type of permit held. These are as follows:

• small-scale operating authorisation;
• semi-mechanised operating authorisation;
• artisanal operating authorisation;
• operating permit (called titre minier d'exploitation under the new Mining Code); and
• exclusive exploitation authorisation.

4.2 What are the key requirements in order to apply for a mining right?

With regard to small-scale operating authorisations, semi-mechanised operating authorisations and operating permits, applicants must have sufficient technical and financial capacity to carry out the works. They must also pay the fees set out in question 4.3.

With regard to artisanal operating authorisations, applicants must:

• be individuals;
• have sufficient technical and financial capacity to carry out the works; and
• pay the fees set out in question 4.3.

4.3 What fees and other charges are incurred in obtaining a mining right?

The issuance of an operating permit is subject to the payment of:

• entry fees amounting to XAF 10 million;
• a surface royalty amounting to XAF 250,000 per square kilometre per year; and
• reimbursement of the historical costs to the state or the concerned public owned entity.

The issuance of a small-scale operating authorisation is subject to the payment of:

• entry fees of XAF 2.5 million; and
• a surface royalty amounting to XAF 50,000 per hectare per year.

The issuance of a semi-mechanised operating authorisation is subject to the payment of:

• entry fees amounting to XAF 1.5 million; and
• a surface royalty amounting to XAF 50,000 per hectare per year.

The issuance of an artisanal operating authorisation is subject to the payment of entry fees amounting to XAF 50,000. No surface royalty is payable.

4.4 What is the duration of a mining right? What is the process for renewal?

Small-scale operating authorisation: A small-scale operating authorisation is issued by order of the minister of mines for a period of up to five years. It is renewable for further periods of the same duration until the reserves are exhausted.

The renewal application must be filed at least two months prior to the small-scale operating authorisation expiry date, along with the following documents:

• information on the small-scale operating authorisation for which renewal is requested;
• all supporting documents relating to the payment of royalties and fees;
• a report on the measures to protect the environment and remedy the site;
• a summary of production and sales during the validity period of the semi-mechanised operating authorisation; and
• a technical note on the nature of works to be performed and the techniques to be used.

The renewal procedure is as follows:

• The dossier is assessed by the mining administration and the applicant is notified of its admissibility.
• The renewed small-scale operating authorisation is issued by order of the Ministry of Mines within 21 days of the notification of admissibility.
• Entry fees are paid amounting to XAF 2.5 million and a surface royalty amounting to XAF 50,000 per hectare per year.

Semi-mechanised operating authorisation: The semi-mechanised operating authorisation is issued for an initial period of up to three years. It may be renewed for further periods of the same duration.

The renewal application must be filed with the Ministry of Mines at least two months prior to the semi-mechanised operating authorisation expiry date, along with the following documents:

• information on the semi-mechanised operating authorisation for which renewal is requested;
• all supporting documents relating to the payment of royalties and fees;
• a report on the measures for protecting the environment and remedying sites;
• a summary of production and sales during the validity period of the semi-mechanised operating authorisation; and
• a technical note stating the nature of the works to be performed and the techniques to be used.

The renewal procedure is as follows:

• The dossier is assessed by the mining administration and the applicant is notified of the dossier's admissibility.
• The semi-mechanised operating authorisation is issued by order of the Ministry of Mines within 21 days of notification of admissibility.
• Entry fees are paid amounting to XAF 1.5 million and a surface royalty amounting to XAF 50,000 per hectare, per year.

Artisanal operating authorisation: An artisanal operating authorisation is issued by the mining administration for an initial period of five years and may be renewed several times thereafter for the same period.

The new Mining Code does not set out specific provisions on the renewal procedure.

Operating permit: An operating permit is issued by decree for a period of between five and 20 years. Its duration depends on the mineral reserves identified in the feasibility study and the investment required for their exploitation.

An operating permit may be renewed several times for the same period until the resource is exhausted.

The renewal application must be filed in triplicate with the Ministry of Mines at least four months prior to the operating permit expiry date, along with the following documents:

• information on the operating permit for which renewal is requested;
• supporting documents relating to the payment of royalties and fees;
• the duration of the requested renewal;
• the minerals for which the renewal is requested;
• the location of the resources;
• a report on the mining operation since the issuance of the operating permit, including the financial results and the remaining reserves; and
• a technical note on exploration works to be performed, if any.

The renewal procedure is as follows:

• The dossier is assessed by the mining administration and the applicant is notified of the dossier's admissibility by the Ministry of Mines.
• The renewed operating permit is issued by way of decree.
• Entry fees are paid amounting to XAF 1 million and a surface royalty amounting to XAF 250,000 per square kilometre per year.

Exclusive exploitation authorisation: Please see question 3.6.

4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

Please see question 4.2.

4.6 Do any indigenous ownership requirements apply in your jurisdiction?

Yes – in practice, there may be instances where indigenous people claim ownership of land on certain sites where there are natural resources. In practice, however, the land seldom belongs to them, as they often do not have legal title to the land and are considered only as occupants of the land by the 1964 National Domain Act.

However, in the event of expropriation because of a mining project, the occupants of the land are entitled to compensation from the permit holders.

4.7 What role does the state play in the mining industry in your jurisdiction?

The state plays an active role in the mining industry in Senegal. The state is in charge of:

• defining the mining policy;
• promoting the mining industry; and
• ensuring a balance through a mutually beneficial partnership between the state, investors and local communities.

For this purpose, the state is entitled to carry out any mining activities on its behalf, either directly or through entities or individuals. For instance, such partnerships may be established through a production sharing agreement. In addition, the issuance of an operating permit entitles the state to a 10% free carried participation in the share capital of the permit holder and an additional participation of up to 25%.

4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?

The issuance of exploration permits and operating permits gives rise to the establishment of a mining convention with the Ministry of Mines. The mining convention:

• defines the rights and obligations of the state and the permit holder; and
• guarantees the stability of the conditions stated therein.

Pursuant to the Mining Decree, the mining convention must be negotiated within three months of notification of the admissibility of the application for an exploration permit or an exploitation permit. It is then submitted to the minister of finance for his or her opinion and then signed by the minister of mines and the permit holder. Once signed, the mining convention is published in the Official Gazette.

4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Operating permits may be transferred, subject to the prior approval of the minister of mines and the payment of the entry fees and taxes.

Small-scale operating authorisations, semi-mechanised operating authorisations and artisanal operating authorisations cannot be transferred.

4.10 Can security be taken over mining rights?

A mortgage may be taken over an operating permit.

4.11 What provisions apply with regard to closure or abandonment of a mining right?

The holders of small-scale operating authorisations and semi-mechanised operating authorisations may waive their authorisations by providing the minister of mines with at least one month's prior notice, without payment of compensation or fines. The waiver does not discharge the holder from its obligations under the Mining Code. Exploitation and real estate assets are transferred to the state free of charge. An order of the minister of mines shall be issued to confirm the waiver.

The Mining Code is silent on the waiver of artisanal operating authorisations.

The holders of operating permits may waive their permits by providing the minister of mines with at least one month's prior notice, subject to the provisions of the mining convention. The waiver does not discharge the holder from its environmental and rehabilitation obligations, and any obligations under the Mining Code and the mining convention. The mine and the real estate assets are transferred to the state free of charge, unless otherwise provided in the mining convention. A decree shall be issued within one year to confirm the waiver.

5 Surface rights

5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?

An operating permits confers on the holder the right to occupy land located inside or outside the area covered by the permit which is necessary for the mining works.

For land located outside the mining area, occupation is subject to prior authorisation of the Ministry of Mines or/and the Ministry of Land, depending on the duration of the occupation.

This authorisation is issued by decree if the occupation will last more than one year or by order if the occupation will last less than one year.

For land located inside the mining area, occupation is subject to a prior declaration to the Ministry of Mines.

5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

The permit holder must pay compensation for any damages caused to the landowner and/or the occupants of the land.

For titled land, the compensation is agreed between the landowner and the permit holder. If the parties fail to reach agreement, the compensation is set by the competent court in accordance with the law on expropriation.

For public land, the compensation is agreed between the permit holder and the local community. If the parties fail to reach agreement, the compensation is set by a committee comprised of the local authorities and representatives of the ministries at the regional level (eg, the Ministries of Mines, Forests, Land and Environment).

If the compensation is not agreed within six months of the issue of the decree or order authorising the occupation, the minister of mines is entitled to allow the permit holder to occupy the land subject to payment of provisional compensation, which will be determined by the committee and held in escrow with a public accounting department until an agreement is reached or the court has issued its judgment. If the provisional compensation exceeds the definitive compensation amount, the excess will be returned to the permit holder.

5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).

The expropriation process is as follows:

• A prior investigation is announced to the public.
• The project is declared a project of public utility by decree. The decree must specify:
• • the duration of the expropriation, which cannot exceed years; and
  • the parcels affected by the expropriation.
• A decree is issued designating the land affected by the expropriation, if the decree declaring the project a project of public utility did not specify the relevant parcels of land.
• This decree is registered with the land authority and the landowner and/or occupants are notified and given 15 days in which to submit their opinion.
• Interested parties are convened in order to reach agreement on the compensation amount with the permit holder.
• If the parties fail to reach agreement, the expropriation and the compensation are pronounced by the court

5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?

No specific land issues apply, as long as the permit holder complies with the authorisation requirements set out in question 5.1.

5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

The construction of infrastructure is subject to the issue of building permits. The state provides assistance to the permit holder when applying for such permits.

6 Environmental issues

6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Prospecting authorisation: The Mining Code does not set out specific requirements on environmental authorisations to carry out prospecting activities.

However, pursuant to the Environmental Code, any activities that may harm the environment may be subject to an environmental impact study and an environmental authorisation from the minister of environment.

Exploration permit: The Mining Code obliges an exploration permit holder to carry out an environmental assessment. Pursuant to the environmental code, an environment assessment consists of an environmental impact study, a strategic environmental assessment and an environmental investigation. This may lead to the issuance of an authorisation from the Minister of Environment.

In addition, to the extent that the exploration permit covers radioactive minerals, a favourable opinion from the Senegalese authority of radioprotection and nuclear safety (Autorité sénégalaise de Radioprotection et de Sureté Nucléaire (ARSN)) is required.

Operating permit: Operating permit holders must carry out an environmental impact study, implement an environment management plan and obtain authorisation from the minister of environment before commencing activities.

In addition, to the extent that the operating permit covers radioactive minerals, the favourable opinion of the ARSN is required.

6.2 What environmental obligations must the operator observe while the mine is operational?

Operators must comply with the environmental management plan (where applicable) and pay into the rehabilitation fund, to be held in escrow with a public entity appointed by the state.

The mining convention entered into with the minister of mines will specify further obligations of the permit holder in this regard.

6.3 What environmental obligations must the operator observe in relation to closure of the mine?

Operators must carry out the necessary rehabilitation works on the mining site and repair any environmental damage caused by the mining activities. The rehabilitation funds will be used to cover the rehabilitation costs.

6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

The potential consequences of breach of the requirements are as follows:

• suspension of mining activities for a period determined by the authority;
• withdrawal of the mining permit; and
• a prohibition on obtaining an exploitation permit for at least five years.

Imprisonment and/or payment of fines may apply to managers and employees of the operators in case of complicity.

6.5 Which bodies are responsible for enforcement of environmental obligations?

The following bodies are responsible for the enforcement environmental obligations:

• the Department for the Environment and Classified Establishments;
• the mining administration; and
• the police.

6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?

The regulators generally focus on:

• preserving the environment;
• controlling the implementation by operators of the necessary environmental measures and rehabilitation plans in connection with mining activities; and
• imposing sanctions in case of breach of their environmental obligations.

7 Health and safety

7.1 What key health and safety requirements apply to operators in your jurisdiction?

Mining activities must be carried out in a way that guarantees the safety of individuals and property. The following health and safety requirements generally apply to operators in Senegal:

• to ensure the regular maintenance of workplaces and installations, to safeguard the health and safety of employees; and
• to ensure the proper maintenance of safety devices.

In addition, operators must comply with the preventive measures on safety and health issued by the competent authority.

7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?

Any mining accident and any danger identified must be immediately brought to the attention of the minister of mines, the competent administrative authority in the area (eg, prefect, deputy prefect, governor), the regional inspector of labour and social security and the public prosecutor.

In case of a serious incident or accident, the operator must inform the Department for the Environment and Classified Establishments within 72 hours and submit a report within 15 days specifying:

• the circumstances and causes of the accident or incident;
• the effects on people and the environment;
• the measures taken or envisaged to avoid a similar accident or incident; and
• the measures taken or envisaged to mitigate its effects in the medium or long term.

In addition, operators must inform the emergency services as soon as possible (eg, the emergency medical services and the emergency fire services).

7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

The potential consequences of breach of these requirements are as follows:

• imprisonment for between one month and one year; and/or;
• a fine of between XAF 2.5 million and XAF 5 million.

7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

International best practices applicable to the mining industry should be considered with regard to health and safety.

7.5 Which bodies are responsible for enforcement of health and safety obligations?

The following bodies are responsible for enforcement of health and safety obligations:

• the Directorate for the Control and Supervision of Mining Operations Division of the Directorate of the Environment and Classified Installations; and
• the regional labour and social security inspectorate.

7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?

The regulators' general approach in regulating the mining sector from a health and safety perspective is to:

• protect employees and other individuals working on mining sites;
• protect communities from incidents; and
• ensure that operators provide employees with a healthy and safe working environment.

In this regard, the bodies referred to in question 7.5 are entitled to carry out control of equipment and installations and impose sanctions in case of non-compliance.

8 Processing, refining and export

8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?

The Mining Code does not set out specific requirements with regard to the processing or refining of minerals. Instead, it requires permit holders to provide the mining administration, before the end of the first quarter each year, with an annual report relating to the mining operations (including processing) undertaken in the previous year.

8.2 What requirements and restrictions apply to the export of minerals?

The mineral substances extracted may be freely exported by permit holders, subject to payment of the customs duties provided for by the regulations in force.

9 Taxes and royalties

9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?

Mining operators are subject to the following royalties and charges:

• entry fees, whose amount depends on the type of permit held;
• a surface royalty, whose amount depends on the type of permit held; and
• a mining royalty, based on the market value for locally traded products or the free on board value for exported products, whose rates are set out in the Mining Code in accordance with the type of minerals. The mining royalty is not payable by state contractors under a production sharing agreement.

9.2 Are any tax incentives available for mining operators?

During the exploration phase, permit holders are exempt from customs duties, value added tax and the contribution to the Conseil Sénégalais des Chargeurs (COSEC). In this regard, a list of equipment that will benefit from such exemption must be approved by the minister of finance and the minister of mines, and annexed to the mining convention.

The customs exemption does not apply to:

• furniture;
• vehicles used for the transport of the permit holder's employees; and
• goods other than the extracted minerals and equipment for which the equivalent can be manufactured in Senegal or sold at the same conditions as those sold abroad.

The mining convention will guarantee the stability of the tax and customs regime applicable to the permit holder.

During the period of realisation of investments and the beginning of production, the holders of operating permits are exempt from customs duties and the COSEC contribution.

The period of the realisation of investments starts on the date of issue of the operating permit and ends either:

• on the date of notification to the minister of finance of the date of first production; or
• three years after the issuance of the operating permit.

In this regard, a list of equipment that will benefit from such exemption must be approved by the minister of finance and the minister of mines and annexed to the mining convention.

The mining convention will guarantee the stability of the tax and customs regime applicable to the permit holder.

9.3 What other strategies might mining operators consider to mitigate their tax liabilities?

Permit holders can always negotiate and obtain from the state authorities tax exemptions in support of the investments to be made in the locality of the mining site, by requesting a suspension of tax payments.

9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?

No.

10 Disputes

10.1 In which forums are mining disputes typically heard in your jurisdiction?

Disputes resulting from the termination of a mining convention are generally settled through international arbitration, notably before the International Chamber of Commerce (ICC) in Paris.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Disputes may concern issues such as withdrawal of a mining permit, non-compliance with the obligations set out in mining conventions and non-payment of royalties.

Where a dispute arises from a mining licence, the parties must attempt to resolve it amicably within three months of the date of written notice of the dispute. If an amicable solution is not found, the parties may agree that the dispute be resolved definitively in accordance with the Rules of Conciliation and Arbitration of the ICC. The place of arbitration shall be Paris and the language of the arbitration shall be French.

For the purposes of the arbitration of disputes, the arbitral tribunal shall refer to the provisions of the mining convention, the laws of Senegal and the general principles of law and, in particular, those applicable by the international courts.

10.3 Have there been any recent cases of note?

Not since the 2009 litigation between the state of Senegal and Arcelor Mittal on the exploitation of the iron mines of Falémé.

Arcelor Mittal obtained the concession in 2007, but withdrew from it in 2009, citing financial difficulties and reserves that proved to be lower than expected (630 million tonnes of ore with an iron content ranging from 40% to 57%, instead of 750 million).

In December 2013 the ICC found these reasons insufficient to justify Arcelor Mittal's failure to meet its contractual obligations in terms of mine development – namely, more than $2.2 billion (€1.55 billion) of investment, including a mineral port south of Dakar, a 750 kilometre railway line and a steel mill. This would create more than 10,000 jobs and generate €114 million in revenue for the government each year (www.jeuneafrique.com/650988/economie/senegal-lattribution-du-gisement-de-fer-de-faleme-au-turc-tosyali-inquiete-des-candidats-a-la-presidentielle/)

11 Trends and predictions

11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?

The mining landscape has been marked by the following innovations:

• The Mining Sector Policy Letter was developed and validated in 2016.
• In 2013 Senegal joined the Extractive Industries Transparency Initiative.
• At the institutional level, the mining sector in Senegal has been significantly reformed, with the separation in 2017 of the Ministry of Energy and Mines into two ministries: the Ministry of Petroleum and Energy and the Ministry of Mines and Geology.
• The Directorate for the Control and Supervision of Mining Operations and the Direction de la Prospection et de la Promotion Minière were created to support the Department of Mines and Geology.
• The Parliamentary Network for Good Governance of Mineral Resources was established on 17 March 2015 to promote the transparent management of the mining sector, in order to protect the interests of the population, particularly those affected by mining operations.

11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Senegalese mining sector has flourished since the issue of the 2016 Mining Sector Policy Letter, and various mining investments have contributed to the economy of Senegal and created new jobs and infrastructure.

The state is in the process of revising the following:

• Decree 2015-1879 of 16 December 2015 amending Decree 2009-1334 of 30 November 2009 creating and setting the rate and distribution methods of the Equalization and Support Fund for Local Authorities and Decree 2006-1257 of 15 November 2006 setting the minimum requirements for protection against chemical risks; and
• the terms and conditions for the funding and operation of the 20% support fund for the mining sector in application of Article 114 of the Mining Code.

12 Tips and traps

12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?

Senegal is an attractive destination for mining investors, as it is one of the West African countries with significant political stability and favourable legislation.

The 2016 Mining Sector Policy Letter has also given investors a clear overview of the state's mining policy for the period 2017 to 2023.

The new Mining Code is more stringent than its predecessor and investors must ensure compliance with the mining legislation at all times.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.