ALSF, UNECA, and African Union cooperate to develop a modeling mining laws

05/09/2017
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Group photo of representatives from ALSF, UNECA, and African Union

For more than a decade, Africa has enjoyed a mineral boom, producing more than 10% of the world’s minerals by value, from over 30% of its global mineral reserves. And yet, despite the critical role played by mineral exploration and production, mining and development have not necessary gone hand-in-hand. While development experts consider how to transform mining into an engine of development, the African Legal Support Facility (ALSF) is helping to make it a reality, alongside its partner institutions and regional stakeholders.

Following an African Union Decision, calling upon the African Union Commission (AUC) and the United Nations Economic Commission for Africa (UNESA) to develop model mining legislation, ALSF staff members Abdoul Karim Kabèlè Camara and Francky Lukanda (AMLA project coordinators and Legal Counsel) participated in a five-day technical meeting, held from 28 August to 1 September in Abidjan, Cote d’Ivoire.

With a broad view towards improving the management of African mineral resources, participants of the technical meeting set themselves to the task of harmonizing both the royalties and fiscal regimes associated with extractive efforts, by developing a Model Law which will provide guidance to Regional Member Countries (RMCs) attempting to maximize mining revenues.

“The importance of creating and adopting model mining legislation in Africa is to ensure that international investors and mining companies cannot establish terms which are disadvantageous to the country in question. If we can establish standards to which all parties must adhere, it will be to the benefit of everyone,” explained Limaryn Leané Louw, an AMLA Legal Research Team member from the University of Pretoria.

The main aim of the African Union Model Mining Law is to support efforts to optimize the dividends paid by mining activities through appropriate, progressive legal and fiscal regimes. The Model Law is expected to provide African governments with specific guidance on establishing and attaining regional standards to increase domestic revenue generation.

The technical meeting itself provided the 23 participants with the opportunity to brainstorm and discuss the technical details and guidelines for initiating the drafting of the Model Law. In order to facilitate this process, 8 members of the African Mining Legislation Atlas (AMLA) Legal Research Team (LRT) were present to provide their expertise and experience in the field of mining legislation.

The AMLA platform is a free, online one-stop resource for African mining legislation which provides access to all existing mining codes in the continent in an easily readable and searchable format. To develop specialized expertise on the continent, the project has established the Legal Research Team made up of advanced law students selected from various African universities, representing all five regions of the continent.

“The vast mineral wealth of Africa has not been transformed into capital wealth. This is due to region-wide gaps in knowledge, finance, and technology, all of which must be imported from abroad. As a result, African governments have to negotiate with foreign companies and investors, often to their disadvantage. The AMLA platform levels the playing field by providing contemporary examples of African mining regulation, contracts, and laws,” said Fallou Samb, Special Advisor to the President of Senegal.

“This initiative is about Africa waking up to the reality that, when dealing with mining investments, they will inevitably interact with foreign investors, as this is a very technology and capacity-intensive sector. Traditionally, this has meant that African governments compete with one another to provide greater incentives to foreign investors, racing to the bottom,” explained Melaku Geboye Desta of the African Peer Review Mechanism (APRM). “This project will ensure that a baseline exists, below which no countries will go in their negotiations of mining concessions.”

The African region is teeming with some of the most copious and abundant mineral reserves on the planet. And yet, for many African governments, translating that natural endowment into economic growth has been challenging. “Often times, mining activities do not generate direct employment or direct benefits for the local economy,” explained Deisy Ribeiro, an LRT member studying at the Universidade Eduardo Mondlane. But with the help of the forthcoming model Mining Law, mining activities will generate far more dividends.