Mines Minister Alpha Kanu launches Mines and Minerals Bill 2009 : "A new era for minerals development in Sierra Leone "

Minister's Statement at Launch of Mines and Minerals Bill 2009 : “A New Era for Minerals Development

Ladies and gentleman,

Today marks a new era for the minerals sector in Sierra Leone. I am pleased to announce that a new Mines and Minerals law has been approved by Cabinet and is about to be submitted to Parliament.

The law will transform minerals development in the country and bring important benefits to the economy, local communities and the country.  And this law is just the beginning of an ambitious programme of reform that my Ministry is implementing.

This law is a major improvement over previous mining legislation for three reasons:

1. It is more comprehensive with respect to the issues it addresses.
2. It is more balanced between the interests of investors and communities.
3. It is more rigorous in terms of governance and oversight.

I would like to briefly introduce some of the main components in the law and discuss why this law is good for the people and the country. Following my presentation I will be happy to answer questions.

The law has four objectives:

1. First – it addresses several issues not previously covered by the law including health and safety, environmental protection and community development.

2. Second – it tightens rules for administrators and mineral rights holders including application and reporting requirements.

3. Third – it promotes investment and minerals sector development by ensuring security of tenure and preventing companies from holding land under license for too long without demonstrable activities.

4. Fourth – it rebalances fiscal benefits – including higher royalty rates for precious stones and precious minerals - between companies, communities and government.

Key provisions of the law are as follows:

• First, in the area of Administration.
o There is improved clarity on the role and functions of the Minerals Advisory Board, including its role in certifying that every applicant for a mineral right is legally compliant with all requirements.

• Second, in the area of mineral rights:
o The law introduces a Reconnaissance Licence that will enable more companies to identify areas of interest. The reconnaissance licence essentially replaces the prospecting licence, is non-exclusive, will only be granted for 1 year and is renewable only once. It is logical entry point for companies while not locking up large areas to individual companies.

o The law significantly reforms provisions for Exploration Licences – this includes tightening the rules associated with the issuance of these licences, introducing a minimum expenditure requirement (which will increase every year), a maximum allowable area of 250km and shorter overall duration. Overall the obligations of a licence holder will be substantially increased over time, thus encouraging exploration and progressive relinquishments.

o The law formally introduces a Small Scale Mining Licence category, which will enable Government to closely control and regulate the sector. Applicants for small-scale mining licences will now need to complete an environmental impact assessment, report against an environment management plan, and more fully engage communities.

• Third, with respect to land owners.
o The law more clearly defines the relationship between land owners/occupiers and holders of mineral rights.
o It restricts the ability of a mineral right holder to exercise rights on land dedicated for other public purposes.
o It defines when a mineral right holder is required to attain written consent from land owners/occupiers prior to exercising their rights.
o The law calls for fair and reasonable compensation for any disturbance of the rights of a land owner/occupier.

• Fourth, about the environment.
o Stronger provisions have been included for the protection of the environment including the requirement for small and large scale mining licence holders to have an environmental impact assessment licence, carry out an Environmental Impact Assessment and have in place an Environmental Management Plan.
o All small and large scale mining licence holders will now need to provide financial surety against potential negative impacts on the environment. This is a major change.

• Fifth, about the community.
o The law introduces the requirement for large and certain small scale mining licence holders to enter into a Community Development Agreement with affected communities prior to commencing mine development. This is a brand new section.
o The law also establishes a minimum expenditure requirement of 0.1% of annual gross revenue to be allocated by mineral rights holders for community initiatives.
o And the Community Development Agreement will form part of a licence holder’s obligations and does not in any way replace other plans or agreements associated with resettlement or community compensation obligations.
o Providing a plan to address community development, health and safety and other social requirements is a condition for receiving a small-scale or large scale mining license. The licence could be denied if the plan is deemed inadequate, and the licence could be suspended or revoked if implementation of the plan does not meet expectations. Since noncompliance with these various obligations will put the licence in jeopardy, it is clearly in the best interests of every mining operation to take these requirements seriously.

• Sixth, about health and safety.
o There is a new section of the Bill dedicated to health and safety which requires all minerals rights holders to provide and promote conditions for safe operations and a healthy working environment.

• Seventh, about finances.
o Royalty rates have increased for precious stones and precious minerals; diamonds will now be charged a 6.5% royalty, up from 5%, and precious metals (e.g. gold) will be charged a 5% royalty, up from 4%.
o All royalties will also be assessed against market value rather than ex-mine price.
o Mineral rights holders will no longer be given any waiver on customs import duties although customs already provide low rates for machinery used by mining companies.
o Mining operations will be required to separate their accounts from other exploration activities carried out under other licences. These provisions will better protect the Government from eroding taxable income of mining companies.

• Two other key provisions:
o Government will have the right to acquire interests in large-scale mining operations on such terms as will be mutually agreed between the Government and the mining company.

o The law has a section dedicated to reporting, disclosure, disseminations of information related to revenues and payments by both mineral right holders and Government, which provides the legal basis to make implementation of the Extractive Industries Transparency Initiative (EITI) compulsory. The Bill goes quite far to make this an obligation of the licence holder and contravening this provision will be considered a prosecutable offence.

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Let me now say a few things about the broader environment for minerals sector development in this country.

1. First, my Ministry is not working on this law in isolation. Work on the new law is being supported by development of a number of other legal and regulatory initiatives:

• A new Diamond Trading Act, together with supporting regulations, to strengthen the legal and regulatory framework governing the trade of rough diamonds and to ensure full compliance with the Kimberley Process.

• Artisanal mining regulations, introducing stronger provisions on mining methods and the protection of the environment, improved terms and conditions for workers, and clarifying the commercial terms between supporters and artisanal mining license holders.

• Regulations associated with the issuance and management of mineral rights. This will include all of the various applications procedures, assessment criteria, terms and conditions of all licences and administrative forms.

2. I also want to say that extensive use of best practice in mining legislation was used in developing this law.

 Royalty rates were compared with regional and international levels.
 Establishing a maximum allowable area for an exploration license is very common, and 250 km is in line with international norms.
 Introducing escalating minimum expenditure requirements for exploration licence holders are increasingly being adopted elsewhere.
 The law is consistent with the main principles and guidelines for the sector as established by ECOWAS.

Experience from elsewhere shows the dramatic impact of legal and regulatory reforms on the minerals sector as well as the gains from effective sector management. In Ghana, once similar reforms were enacted in the 1980s, there has been more than a 20% annual increase in gold and bauxite production, foreign investment has exceeded $5 billion, and mineral exports have increased from $108 million in 1985 to $2.4 billion today.  In Botswana, careful management of the minerals sector has made an enormous contribution to economic growth.

3. In terms of implementation…..
a. Implementation and enforcement is going to be made easier because law is now much clearer about various parties’ rights and obligations and so less subject to arbitrary interpretation.

b. But good enforcement also means applying penalties for offences should any provisions in the law be violated. Here the law is very clear and it will be up to the Ministry to be fair but firm in determining whether violations have been committed and taking appropriate action.

c. Also, a law cannot be implemented without supporting regulations. Up until now, the lack of clear administrative rules and procedures has resulted in a very inconsistent and poorly managed licensing regime. The good news is that this will change. A wide variety of administrative regulations associated with the issuance and management of mineral rights are currently being finalised. This will include for all of the various applications procedures, assessment criteria, terms and conditions of all licences and administrative forms.

d. Finally, it is worth reminding that implementation is shared effort. Mining and exploration companies will need to follow strict rules for registration and reporting, and how well they meet these requirements will go a long way to ensuring the Bill’s successful implementation. The third key group are the local communities which will need to be properly organized to enter into Community Development Agreements with holders of mineral rights so that local benefits are realized.

4. In terms of the economic benefits that the law will generate….
a. By preventing companies from holding land under license for too long without demonstrable mining activities, the law will lead directly to greater exploration and mining activity, which will in turn directly lead to more jobs and higher incomes.

b. The higher royalty rates on precious stones and precious metals will generate more revenue for Government to use for citizens.

c. For investment to help the economy at all, it first must be made. One of the most important criteria used by investors in deciding where to put their money is the level of predictability and transparency of Government rules. Surveys of mining and exploration companies worldwide regularly highlight uncertainty and inconsistency in the administration, interpretation and enforcement of regulations as a major reason not to invest in a given country. This law makes it very clear what are the rights, obligations and reporting requirements for all mining companies at each stage of the minerals development process. It is exactly the kind of clarity that investors seek.

d. But higher income from royalties is only a small portion of total revenues generated from the sector, which also includes income taxes, withholding taxes, customs duties, and indirect taxes. Because income tax from mining companies is typically a much greater source of revenue to Government than royalties, a key objective of the law is to facilitate greater investment in the sector so that over time, more tax revenues will be collected.  So the law emphasises growing the revenue base, not just reallocating it. This will help ensure that more revenue from mining goes to the people.

5. About existing mineral rights…
a. Those which currently have a mineral rights licence now will still have a licence once the law is approved.
b. Existing mineral rights licenses will be affected only at expiration; regulations are currently being developed to identify precisely where along the new licence registration process they will be classified once they expire.

I am now happy to answer your questions and remind all of you that additional information about the law and about the sector can be found in the material packages provided.

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Government of Sierra Leone
Ministry of Mineral Resources and Political Affairs

Understanding the Mines and Minerals Act 2009

Frequently Asked Questions

Introduction

Development of the Mines and Minerals Act 2009 signifies a new era for minerals sector development in Sierra Leone. The Act introduces several new provisions affecting exploration and mining companies, communities, citizens and the Government. Given the significance and scope of these changes, the importance of the sector to the national economy, and the high level of interest in the sector, this Frequently Asked Questions guide has been developed to assist in the understanding of the Act’s provisions as well as its impact and implications for stakeholders.

On the next page is the list of questions included in this publication, followed by a presentation of each question separately together with an answer. The intention is to address each question as thoroughly as possible to help affected stakeholders better grasp the Act’s contents and significance.

For more information about the law, please contact:

Ministry of Mineral Resources and Political Affairs
Permanent Secretary:   Umaru Wurie
Email:     This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Telephone:   +232 76 671 200

 
Frequently Asked Questions about the Mines and Minerals Act 2009

1. What are the major changes in the new Act?

2. How does the Act affect mineral rights?

3. Sierra Leone is richly endowed in mineral resources yet continues to be so poor. What benefits will the Act bring to the economy, the people and communities?

4. Will current mining licences and mineral rights agreements be affected? How does the Act impact the work of the Presidential Task Force for the Review of Mineral Rights?

5. What are the main fiscal changes being introduced in the Act?

6. To what extent does the Act protect land owners/occupiers?

7. How will the Community Development Agreements work?

8. What does the Act say about resettlement?

9. How will the Act help protect the environment against mining activities?

10. How can we be sure that the companies will honour Community Development Agreements under the Act, as well as health and safety, environmental protection, and local procurement and employment obligations?

11. How does the Act reform artisanal mining?

12. Does the Act address the issue of child labour?

13. Does the Ministry have enough capacity to implement and enforce this Act?

14. How do we ensure that the Ministry of Mineral Resources will not abuse its powers under the Act?

15. What other legal and regulatory reforms are underway which impact the minerals sector?

16. How does the Act compare to similar laws in other countries?

17. Will the Act ensure that more information about mining is made publicly available?

18. Will the Act help explain where the money from mining activities is coming from and how it is being spent?

What are the major changes in the Act?

The new Mines and Minerals Act signifies a new era for minerals sector development in Sierra Leone. It balances the interests of the sector, the people and the government and will bring important benefits to the economy, local communities and the country.

In comparison with the former Act and amendments, the new Act:

• Addresses several issues not previously covered by the law including health and safety, environmental protection and community development;

• Tightens rules for administrators and mineral rights holders including application and reporting requirements;

• Establishes a new licensing regime to better enable investment and minerals sector development, by preventing companies from holding land under licence for too long without demonstrable activities;

• Rebalances the fiscal benefits – including higher royalty rates for precious stones and precious minerals - between companies, communities and government.

How does the Act affect mineral rights?

The Act introduces a Reconnaissance Licence - a non-exclusive mineral right that will enable more companies to identify areas of interest and apply for exclusive rights subsequently. This non-exclusive licence will only be granted for one year, is renewable only once, is limited in size to 10,000 sq km, and essentially replaces the more commonly acquired exclusive prospecting licences.  It is the logical entry point for companies while at the same time does not lock up large areas to individual companies.

Significant reforms have been made for Exploration Licences, including tightening the rules associated with the issuance of licences, introducing a minimum expenditure requirement (which will escalate every year), a maximum allowable area of 250km and shorter overall duration. Overall the obligations of a licence holder will be substantially increased over time, thus encouraging exploration and progressive relinquishments.

The Act also formally introduces a Small Scale Mining Licence category to enable Government to closely control and regulate the sector. Applicants for small-scale mining licences will now need to be considered by the Minerals Advisory Board, complete an environmental impact assessment, report against a management plan, and more fully engage communities. This licence category will be valid for only 3 years (renewable) and over an area of up to 1 sq km.

The Act empowers the Minister to declare specific areas for exclusive use by artisanal miners; the Minister can also declare other areas for exclusive use by small-scale miners.

Sierra Leone is richly endowed in mineral resources yet continues to be so poor. What benefits will the Act bring to the economy, the people and communities?

The Act will facilitate greater competition and investment through new measures that will prevent companies from holding land under licence for too long without demonstrable mining activities. More exploration and mining will lead directly to more jobs and incomes for the people.

The higher royalty rates on precious stones and precious metals will generate more revenue for Government. The requirement for large-scale and some small-scale mining licence holders to enter into Community Development Agreements will provide employment and income opportunities at the local level.

Meeting reporting and social development obligations are common requirements for mineral rights holders in any country. The higher royalty rates for precious stones and precious metals under this Act are at the high end of rates internationally, but are still regionally and internationally competitive.

Higher income from royalties is only a small portion of total revenues generated from the sector, which also includes income taxes, withholding taxes, customs duties, and indirect taxes. Because income tax from mining companies is typically a much greater source of revenue to Government than royalties, a key objective of the Act is to facilitate greater investment in the sector so that over time, more tax revenues will be collected.  So the Act emphasises growing the revenue base, not just reallocating it. This will help ensure that more revenue from mining goes to the people.

For investment to help the economy at all, it first must be made. One of the most important criteria used by investors in deciding where to put their money is the level of predictability and transparency of Government rules. Surveys of mining and exploration companies worldwide regularly highlight uncertainty and inconsistency in the administration, interpretation and enforcement of regulations as a major reason not to invest in a given country. This Act makes it very clear what are the rights, obligations and reporting requirements for all mining companies at each stage of the minerals development process. It is exactly the kind of clarity that investors seek.

Will current mining licences and mineral rights agreements be affected? How does the Act impact the work of the Presidential Task Force for the Review of Mineral Rights?

A key principle of the Act is security of tenure. Those which have a mineral rights licence now will still have a licence once the Act comes into force. Existing mineral rights licences will be affected only at expiration; regulations are currently being developed to identify precisely where along the new licence registration process they will be classified once they expire.

The Presidential Task Force continues its work on reviewing special agreements. Since the agreements negotiated between individual mining companies and Government have been passed into law, the Government cannot by itself unwind them. A key principle of the Act in looking to the future is to move away from these special agreements and create a level playing field for all companies.

What are the main fiscal changes being introduced in the Act?
A key objective of the Act is to rebalance fiscal benefits.

There has been a concerted effort in the development of this law not to bypass other laws and/or create overlaps.  All individuals and companies in Sierra Leone are subject to Income Tax. Within the Income Tax Act there is a specific schedule dealing with the treatment of mining companies. Where possible, this Act defers most tax issues to this Act although the intention is to introduce amendments to the Income Tax Act which are in early stages of discussion.

The Act introduces higher royalty rates to be calculated based on market value (rather than ex-mine price):

• Special Stones 15% (new category for those precious stones that are valued at more than $500,000)
• Precious stones 6.5% (up from 5%)
• Precious metals 5% (up from 4%)
• All other minerals 3% (same)

Mining operations will be required to separate their accounts from other exploration activities carried out under other licences.

Different from the 1994 Act, the new Act does not provide a Customs Duty exemption on mineral rights holders. The importation of equipment will be in accordance with provisions of the Customs Duty Act – which already provides for a substantially reduced rate for equipment utilised for exploration and mining companies. It is common elsewhere to substantially reduce the customs duty rate on the importation of equipment utilized for exploration and mining. The cost of setting up a mine is hugely dependent on the cost of imports. This affects the viability of a mine from the very beginning as the high cost of start up production can render marginal deposits useless, hence not maximizing minerals development potential.

The Act includes a provision that will give the government an option to acquire an interest in large-scale mining operations on mutually agreeable terms between the Government and the licence holder.

To what extent does the Act protect land owners/occupiers?

Issuing a mineral right does not mean that individual surface rights have been negotiated away.  Exercising a mineral right will still require consent from surface right owners.

The Act more clearly defines the relationship between land owners/occupiers and holders of mineral rights. It restricts the ability of a mineral right holder to exercise their rights on land dedicated for other public purposes. It defines when a mineral right holder is required to attain written consent from land owners/occupiers prior to exercising their rights; and it makes provisions for rights to graze stock and cultivate land. The Act requires mining companies to enter into surface lease arrangements with the Government or landowners, and calls for fair and reasonable compensation for any disturbance of the rights of a land owner/occupier. The owner/occupier can appeal to the Minister or Minerals Advisory Board if he/she is dissatisfied with any compensation offerred.

How will the Community Development Agreements work?

The Community Development section of the Act is completely new and is intended to encourage the formation of genuine partnerships between companies and citizens. The Act establishes the conditions under which a Community Development Agreement will be required (to be based on mine throughput; employment; and distance from the community).  While a Community Development Agreement is formed between the mining company and community, the Minister is required to approve the plan and resolve disagreements.

The Act establishes a minimum expenditure requirement of 0.1% of gross revenue for the implementation of the Agreement. The Agreement must define the obligations of the host community, as well as the means by which the Agreement will be reviewed by both parties every five years and how disputes will be resolved. The Agreement must also define how the local community will participate in the planning, implementation, management and monitoring of activities undertaken through the agreement.

The Act introduces a wide variety of specific activities which can legitimately be implemented (including educational and training opportunities, financial contributions toward infrastructure and community services, small business development, or agricultural product marketing) but does not prescribe any single one. This will be determined through company-community negotiations.

The Community Development Agreement will form part of a licence holder’s obligations and does not in any way replace other plans or agreements associated with resettlement or community compensation obligations.

What does the Act say about resettlement?

The Act introduces an explicit sub-section on the right to resettlement for affected parties by clarifying the rights and responsibilities of communities and mining companies. The Minister shall ensure that all owners or lawful occupiers are resettled on suitable alternate land should they prefer to be compensated by way of resettlement as a result of being displaced by a mining operation, and the circumstances of those being resettled must be at least equal to their circumstances before resettlement. The resettlement must be carried out according to relevant planning laws, and the cost of resettlement must be paid by the holder of the mineral right.

How will the law help protect the environment against mining activities?

The Act includes stronger provisions for the protection of the environment which will require that all applicants for small and large scale mining licence holders have an environmental impact assessment licence, carry out an Environmental Impact Assessment and have in place an Environmental Management Plan.

Holders of small-scale and large-scale mining licences will also have to provide financial surety against the potential negative impacts of their activities on the environment. This is a major change.

A new and substantive part of the Act is dedicated to health and safety; requiring all minerals rights holders to provide and promote conditions for safe operations and a healthy working environment.

How can we be sure that the companies will honour Community Development Agreements as well as health and safety, environmental protection, and local procurement and employment obligations?

Providing a plan to address each of these requirements is a condition for receiving a small-scale or large scale mining licence. The licence could be denied if the plan is deemed inadequate, and the licence could be suspended or revoked if implementation of the plan does not meet expectations. Since noncompliance with these various obligations will put the licence in jeopardy, it is clearly in the best interests of every mining operation to take these requirements seriously.

How does the Act reform artisanal mining?

Reform of the minerals sector would not be complete without addressing artisanal mining. Regulations associated with artisanal mining are currently being upgraded in order to: (1) improve the sector’s management and (2) reduce the level of abuse faced by certain parties.

The regulations will introduce stronger provisions on mining methods and the protection of the environment, improved terms and conditions for workers, and clarifying the commercial terms between supporters and artisanal mining licence holders.

There is also now a much more rigorous approval process for obtaining an artisanal mining licence, with more clearly defined social and environmental obligations and more detailed information about sources of financing. In the past, where environmental damage was done, miners were not directly responsible for rehabilitation. They will be now, as they will need to assess the likely effects of proposed operations on the environment and on the local population, and propose mitigation and compensation measures.

Does the Act address the issue of child labour?
Child labour will not be permitted in any way by the holder of mineral right. Penalties for allowing child labour include prison sentences of up to two years.

Does the Ministry have enough capacity to implement and enforce this Act?

The new Act introduces a much stronger and transparent governance structure within the Ministry of Mineral Resources. This includes: (1) a more important role for the Minerals Advisory Board including to certify the validity of all mineral rights licence applications; and (2) legitimizing the role of the Mining Cadastre Office which will manage the registration process for mineral rights.

Implementation and enforcement is also going to be made easier because the Act is now much clearer about various parties’ rights and obligations and so less subject to arbitrary interpretation. This is being supported by an information and sensitization campaign aimed at these parties. But good enforcement also means applying penalties for offences should any provisions in the law be violated. Here the Act is very clear and it will be up to the Ministry to be fair but firm in determining whether violations have been committed and taking appropriate action.

The Ministry is taking steps to build its internal capacity. For example, the Mining Cadastre Office is to be rolled out to the districts, and will include mapping out not just where licences are but also to manage the basic terms and conditions associated with reporting. This will improve the Government’s ability to manage information and licence administration, ensuring that they can hold companies to their obligations.

A law cannot be implemented without supporting regulations. Currently there are no formally published regulations associated with the former Act, and the lack of clear administrative rules and procedures has resulted in a very inconsistent and poorly managed licensing regime. The good news is that this will change. A wide variety of administrative regulations associated with the issuance and management of mineral rights are currently being finalised. This will include for all of the various applications procedures, assessment criteria, terms and conditions of all licences and administrative forms.

Finally, it is worth reminding that implementation is shared effort. Mining and exploration companies will need to follow strict rules for registration and reporting, and how well they meet these requirements will go a long way to ensuring the Bill’s successful implementation. The other key group are the local communities which will need to be properly organized to enter into Community Development Agreements with holders of mineral rights.

How do we ensure that the Ministry of Mineral Resources will not abuse its powers under the Act?

The rights and obligations of affected parties are much more clearly presented in the Act, which is the first and most important step to reducing the potential for arbitrary or inconsistent Government treatment of mineral rights holders.

The Minerals Advisory Board (MAB) will have substantial new responsibilities, in particular in certifying that applications for mineral rights are fully compliant with the law. Previously these responsibilities were in the hands of Ministry officials. The MAB will also have the ability to engage representative from a locality as part of its assessment of a mineral right.  A separate Chairman of the MAB will be appointed; previously this was the Director of Mines.

The Minister and Director will be required to make a decision on mineral rights applications within a specific period of time, and provide reasons for refusing any applications. This improves transparency. Government financial reporting related to mining will be more transparent; the Act has a section dedicated to reporting, disclosure, and dissemination of information related to revenues and payments by mineral rights holders as well as Government.

Finally, those affected by any decision made by the Minister under this Act will be able to challenge that decision in Court.

What other legal and regulatory reforms are underway which impact the minerals sector?

The legislative and regulatory reforms being introduced by the Ministry of Mineral Resources are the most far reaching ever undertaken. Work on the new Act is being supported by development of:

• A new Diamond Trading Act, together with supporting regulations, to strengthen the legal and regulatory framework governing the trade of rough diamonds and to ensure full compliance with the Kimberley Process. The regulations currently being developed are based on a tight system of reporting for licencees that can subsequently be audited by Government officials.
• Artisanal mining regulations, introducing stronger provisions on mining methods and the protection of the environment, improved terms and conditions for workers, and clarifying the commercial terms between supporters and artisanal mining licence holders.
• Regulations associated with the issuance and management of mineral rights. This will include all of the various applications procedures, assessment criteria, terms and conditions of all licences and administrative forms.

How does the Act compare to similar laws in other countries?

Extensive use of best practice in mining legislation was used in developing this Act. Royalty rates were compared with regional and international levels; establishing a maximum allowable area for an exploration licence is very common, and 250 km is in line with international norms; introducing escalating minimum expenditure requirements for exploration licence holders are increasingly being adopted around the world; and providing holders of exploration licences the opportunity to explore for all minerals, not just specific ones, is typical of such licences elsewhere.

Experience from elsewhere shows the dramatic impact of legal and regulatory reforms on the minerals sector as well as the gains from effective sector management. In Ghana, once similar reforms were enacted in the 1980s, there has been more than a 20% annual increase in gold and bauxite production, foreign investment has exceeded $5 billion, and mineral exports have increased from $108 million in 1985 to over $2.4 billion today.  In Botswana, careful management of the minerals sector has made an enormous contribution to economic growth.

The Act is consistent with all the main ECOWAS principles and policies governing the mining sector, including the acquisition of mineral rights, respecting the rights of landowners, protection of the environment, financial terms and conditions and company reporting, access to information, state participation in mining operations, and respecting the rights of local communities.

Will the Act ensure that information about mining is publicly available?

Transparency is a key principle of this Act. The only way for citizens to be confident about the integrity of the resource extraction process is if they know about it. This why the Act places significant responsibility on the government and the sector to make information available to the public.

The register of mineral rights and mineral rights applications, the cadastral survey map of mineral rights and applications, non-confidential agreements, and non-confidential reports submitted by past and present holders of a mineral right shall all be open to public inspection. So too will Environment Impact Assessments and Environment Management Plans of companies. Semi-annual and annual reports from companies, however, including financial reports, will be confidential.

Beyond building public trust, transparency has other benefits such as improving a country’s credit rating. The commercial rating agency Standard & Poor’s cites governance of the extractive sector as a strong factor in the risk ratings given to Sub-Saharan African countries.

Will the Act help explain where the money from mining activities is coming from and how it is being spent?

Yes. The Act contains a new section requiring the Minister to develop a framework for transparency in reporting and disclosure of revenue due to or paid to Government from mining activity.

The country’s participation in the voluntary Extractive Industries Transparency Initiative (EITI) has established that the public is entitled to information on the payments and revenues derived from minerals extraction. The Act now provides the legal basis to make EITI implementation compulsory as there is a section dedicated to reporting, disclosure, disseminations of information related to revenues and payments by both mineral right holders and Government. The Act goes quite far to make this an obligation of the licence holder and contravening this provision will be considered a prosecutable offence.