Transcript www.mineafrica.com

Background
• The UEMOA “Union Economique et Monetaire Ouest Africaine”
(West African Monetary and Economic Union) is in the process of
elaborating a regional mining framework called the “Common Mining
Policy”.
• Key features of Common Mining Policy:
• Common mining law; and
• Regional database of geological information.
What is the UEMOA?
• An organization of 8 West Africa States established by treaty in 1994
to promote economic integration among countries that share a
common currency, the CFA franc.
• Comprises Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali,
Niger, Senegal, Togo.
• Population: 72 million over 3.5 million square kilometers.
Map of UEMOA Member States
UEMOA Objectives
• Creation of a common market with the free flow of persons, goods,
services and capital in order to facilitate sustainable growth;
• Implementation of macroeconomic convergence criteria and an
effective multilateral surveillance mechanism in order to impose a
fiscal discipline to Member States;
• Adoption of a customs union and common external tariff;
• Harmonization of fiscal policies  18% VAT currently in place within
the Union; and
• Adoption of regional sectoral policies.
What is the authority of UEMOA to regulate
mining at community level?
• UEMOA’s authority stems from its mandate:
• to regulate the fiscal and customs regime within the Union 
direct bearing on mining; and
• to create sectoral policy in various sectors including human
resources, agriculture, land use planning, energy, infrastructure,
transportation, telecommunications, industry, and mining.
Mining Legislation
• On December 14, 2000, UEMOA enacts the “Additional Act No.
01/2000 relating to the adoption of the Common Mineral Policy of the
UEMOA”, which provides, among other things, for:
• Promotion of the mining sector;
• Harmonization of the regulatory frameworks;
• Setting up of a sub-regional system for geological information;
• Development of competitive local mining companies;
• Local processing of mineral products; and
• Preservation of the environment.
Mining Code
• On December 22, 2003, the UEMOA adopts the Regulation No.
18.2003/CM/UEMOA relating to the Adoption of the UEMOA
Community Mining Code (the “Mining Code”).
• Mining Code to govern all of the operations relating to exploration,
exploitation and commercialization of mineral substances on all of the
territory of the Union.
• Objectives of Mining Code:
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Define the types of mineral mining titles in the Union;
Simplify the process through which mineral titles are granted;
Define a model mining convention;
Adopt a program for the protection of the environment; and
Define a tax system applicable to minerals.
Key provisions of Mining Code
• Stability of the fiscal and customs regime during the period of validity
of the mining titles;
• Free transfer of money necessary to the activities regulated by the
Mining Code;
• Free transfer of net benefits to be distributed and of the monies used
to finance project after the payment of taxes;
• Free circulation and commercialization of the products derived from
the exploitation activities;
• Mining royalties to be set at the Community level in implementing
regulation; and
• 10% carried interest in favor of host government.
Obligations of Title Holders
• Obligations of title holders include:
• Maintain proper accounting in accordance with the West African
Accounting System;
• Pay the annual payment of the surface tax; and
• Pay the fees associated with the application, renewal, transfer,
lease or transformation of mining titles.
Taxes and Royalties
• Surface taxes; and
• Fees relating to the application, the renewal, the transfer, the lease etc.
of mining rights
 both regulated by the mining legislation of each Member State,
unless governed by Union texts.
• Mining Code states expressly that the royalty will be set out in the
mining regulations.
Advantages for investors as set out in Code
• During Exploration:
• Customs: equipment imported for exploration benefit from the
temporary admission regime and exemptions;
• Taxes: fiscal advantages in respect of VAT, income taxes, the
minimum lump sum tax, employer taxes (taxe patronale),
contribution on patents, property taxes and fees payable for the
constitution or the capital increase of companies.
Advantages for investors as set out in Code
• During Exploitation:
Customs:
• Temporary admission regime applicable to certain equipment 
first 3 years beginning at the date of the first production.
Taxes:
• Exemption on VAT  the period ending on the date of the first
production;
• Exemption on the contribution on patents, income taxes, employer
taxes  3 years beginning as of the date of the first production;
• Exemption on property taxes and the minimum lump sum
payment or its equivalent  During the entire exploitation period;
• Holders of exploitation mineral rights may benefit from an
accelerated amortization system.
Mining Titles
• Article 9 of the Code states that the nature, administration of the
mining titles and obligations and rights attached thereto will be
governed by the national legislation of each Member State, unless
specifically governed by Union texts;
• Mining title issues that would be of import to investors not addressed
in Mining Code:
• Types of mining rights, application process to obtain mining rights,
duration of mining rights, renewal conditions; and
• Security of tenure issues including conditions required to graduate from
exploration to exploitation.
• These should be addressed in the Model Mining Convention and/or
regulations. To the extent that they are not, it would weaken
considerably the effort to have a harmonized mining legislation within
the Union;
Effective Entry into Force of Mining Code
• The provisions of the Code will be specified in implementing
regulations and in a model mining Convention.
• Upon the adoption of the implementing regulations, the Mining Code
will enter into force.
• The implementing regulations and the model mining Convention still
being negotiated – issue arises as to the extent to which certain
provisions will be governed by national legislation or at the Union’s
level.
• Question being raised by Member States include how to ensure that
countries benefit from the “super-profits” arising from the rise of
commodities prices, and how to foster the reinvesting of mining
companies in the local economies.
Second feature of Common Mining Policy Regional Mining Database
• Second major feature of the Common Mining Policy  the
regional system of geological and mining information.
• Regional system being set up in partnership with the African
geological network for a sustainable development (SIGAfrique).
• At this time, 11 participating countries (Angola, Burkina Faso,
Ethiopia, Guinea, Kenya, Madagascar, Mali, Mauritania, Niger,
Senegal, Tanzania) and 2 regional centers (UEMOA and the Southern
and Eastern African Mineral Center headquartered in Dar-Es-Salaam,
Tanzania).
• The SIGAfrique network is intended to be Pan-African.
• SIGAfrique’s website: http://www.sigafrique.net available in both
French and English.
Objective of SIGAfrique
• Facilitate access to data and other relevant information regarding
African geosciences to the earth science community;
• Contribute to the establishment of a common earth science language
in Africa;
• Create, first a network of African geological surveys and at a later
stage a network between African and European geological surveys
and other institutions; and
• Transfer databases at regional level in technical centres (including
UEMOA) equipped with servers and other data management and
exchange facilities.
Scope of SIGAfrique Project
The project covers:
• Regional geology;
• Regional hydrogeology;
• Mineral occurrences and related socio-economic data;
• Development indicators relevant to the mineral resources sector;
and
• Bibliographical data.
SIGAfrique Website  access to online maps
SIGAfrique UEMOA Website: http://sigafrique.uemoa.int
SIGAfrique UEMOA Website provides discussion forum
Other geological database initiative: AEGOS
• African European Georesources Information System (AEGOS)
• AEGOS aims at:
• gathering geological information from various sources (principally the
European Geological Surveys), in multiple formats and different
languages, and putting together a harmonized geoscientific data; and
• setting up the preparatory phase for the building of an information system
containing and making accessible data and knowledge on African
geological resources including mineral resources, raw material,
groundwater and energy (geo-resources).
• AEGOS is a collaborative effort with SIGAfrique
• Website: http://www.brgm.fr/brgm/aegos/partners.htm
AEGOS Challenges
• Move from paper to digital geo-referenced interoperable data;
• Acquire large data sets concerning geological infrastructure of Africa
(including airborne surveys, mapping programs);
• Overcome the current dissemination of data sets in making them
accessible through the internet in a secured environment;
• Develop a shared/distributed/interdisciplinary spatial data
infrastructure;
• Strengthen human and technical capacities necessary to turn data into
information and expertise required by a wide range of end-users; and
• Promote the re-use of public data through combinations and modeling
in environmental, social and economic contexts in support to
sustainable development policies.
The Future of Common Mining Policy
• Mining Legislation  enactment of implementing regulations and
model Mining convention. Unclear at this stage what the law will
look in its final form. Looking ahead, questions arises as to whether
the law should contemplate downstream activities.
• Geological database  development of the SIGAfrique and AEGOS
initiatives would conceivably be of considerable help to companies.
• UEMOA track record  a September 2002 IMF survey cited the
UEMOA as "the furthest along the path toward integration" of all the
regional groupings in Africa. However, the Common Mining Policy
faces several challenges, including the lack of infrastructure and
funding.
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