Senegal, officially the Republic of Senegal, is continental Africa’s westernmost country. It is bordered by Mauritania to the north, Mali to the east, and Guinea-Conakry and Guinea-Bissau to the south, and the Atlantic Ocean to the west. Dakar is the capital city.
High grades of gold and phosphates can be found in Senegal. Gold deposits are concentrated in the southeast of the country, in the region of Kédougou along the border with Guinea and Mali. While phosphates deposits are found along Senegal’s northeast border with Mauritania, in central Senegal (Thiès, Diourbel and Louga) and in the western part of the Casamance region, south of the Gambia. The Matam area, in the northeast, is home to the largest deposits: proven reserves of 40 million metric tonnes, and further estimated reserves of 100 million metric tonnes.
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Senegal’s economy is driven by mining, construction, tourism, fisheries and agriculture, which are the primary sources of employment in rural areas. The country's key export industries include phosphate mining, fertilizer production, agricultural products and commercial fishing and Senegal is also working on oil exploration projects. It relies heavily on donor assistance, remittances and foreign direct investment. Senegal reached a growth rate of 7% in 2017, due in part to strong performance in agriculture despite erratic rainfall. President SALL unveiled an ambitious economic plan, the Emerging Senegal Plan (ESP), which aims to implement priority economic reforms and investment projects to increase economic growth while preserving macroeconomic stability and debt sustainability. Bureaucratic bottlenecks and a challenging business climate are among the perennial challenges that may slow the implementation of this plan. Senegal receives technical support from the IMF under a Policy Support Instrument (PSI) to assist with implementation of the ESP. The PSI implementation continues to be satisfactory as concluded by the IMF’s fifth review in December 2017. Financial markets have signaled confidence in Senegal through successful Eurobond issuances in 2014, 2017, and 2018. The government is focusing on 19 projects under the ESP to continue The government’s goal under the ESP is structural transformation of the economy. Key projects include the Thiès-Touba Highway, the new international airport opened in December 2017, and upgrades to energy infrastructure. The cost of electricity is a chief constraint for Senegal’s development. Electricity prices in Senegal are among the highest in the world. Power Africa, a US presidential initiative led by USAID, supports Senegal’s plans to improve reliability and increase generating capacity.
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Laws and Regulations
MINING RIGHTS AND REQUIRED LICENCES AND PERMITS
All mineral substances contained in the ground and underground within the territory of the Republic of Senegal, its territorial waters and continental plateau are the property of the state; mining exploitation title-holders acquire possession of the mineral substances that they extract.
Titles are transferable and transmittable subject to the prior approval of the Minister of Mines.
ii Mining rights
Within Senegal, and in accordance with the 2003 Code, the state can grant to one or many legal entities the right to undertake or conduct one or many mining operations relating to mineral substances contained in the ground or underground.
These legal entities must prove their technical and financial capacities to carry out all mining operations. The conditions under which mining operations can be carried out by these entities are defined by agreements (mining conventions) between the state, represented by the Minister of Mines and Geology (the Minister), and applicants.
No one can undertake or conduct an activity within Senegal governed by the 2003 Code without holding a mining title according to the terms of the mining legislation.
Three original copies of the application for a prospecting authorisation must be forwarded to the Minister, who must acknowledge receipt. The application must provide:
- the information and documents showing the identity of the person responsible for the work as set out under Article 5 of the 2003 Code;
- the aims of the planned prospecting, its scientific or economic character, its geographical location and its likely duration; and
- a brief description of the programme of work, the methods to be used, the anticipated results and supplementary technical information (in particular, the parameters for basic analysis of the initial state of the prospecting site and its environment).
A prospecting authorisation is granted for six months and is renewable once, with no fee required. It does not confer any pre-emptive rights on its beneficiary. It is not transferable and does not give rise to any fiscal exemptions. The beneficiary is obliged to communicate the results of its research to the Director of Mines and Geology.
The beneficiary should first get approval for its research project and the budget. The applicant for a research permit should then submit three original copies to the Minister. The application must provide:
- the information and documents showing the identity of the person responsible for the work as set out under Article 5 of the 2003 Code;
- a description of the mineral substances for which the application for the permit is being made;
- the coordinates of the exploration area;
- an estimate of the surface area of the exploration permit area being sought;
- an extract of the map of Senegal on a scale of 1:50,000 or 1:200,000 on which the exploration permit area being sought is indicated;
- a presentation of the planned exploration work and the methods to be used;
- and any supplementary technical information, such as the parameters for basic analysis of the exploration site.
A research permit is issued for three years, renewable twice. In the event of renewal, the research permit holder must relinquish part of the perimeter granted (generally 25 per cent) and gain approval of the programme and the budget for the renewal requested. In the event of competitive requests, priority is given to the tender offering the best conditions and guarantees for the state.
An exploitation permit is delivered by a presidential decree for a period not exceeding five years. It is renewable and can be transferable. The applicant should include:
- three original copies of the application addressed to the Minster four months before expiry of the exploration permit;
- documents providing identification of persons and corporates, the reference of the exploration permit coordinates and surface area of the permit area being sought;
- a feasibility study indicating the characteristics and performance of mining production units, an economic and financial assessment of the project and its socio-economic impact;
- a report detailing the results of the exploration phase indicating, in particular, the reserves, grades, types of mineral deposits and metallurgic tests;
- a plan for the development and start of mining operations;
- an investment plan and a timing chart for the undertaking of the mining project;
- an environmental impact study concerning the mining operation (approved by the Ministry of Environment, which issues a confirmatory certificate); and
- a draft of the convention between the state and the exploration permit holder if the demand does not derive from a current, valid exploration permit.
An exploitation company must be set up, under the provisions of the OHADA Uniform Act relating to commercial companies and economic interest groups, between the company with the research permit, or its designated subsidiary, and the state of Senegal. The parties will sign a shareholders' agreement to set out the terms and conditions for the establishment and management of the company.
The government takes its free carried stake during the exploitation phase, which represents 10 per cent of the mining company shares, and may negotiate up to 25 per cent for itself or local applicants.
The company is managed by a board of directors, the composition of which depends on the proportion of the shares in the exploitation company.
This is issued by a presidential decree for a period of five years and is renewable for a period not exceeding 25 years. Concession of mining exploitation titles on a perimeter cancels any previous exploration permit within that perimeter. These rights are granted by decree to applicants who demonstrate adequate technical, financial and managerial capability to engage in mining activities.
The 2003 Code also provides other permits and licences to conduct mining activities, such as those for artisanal and small mine exploitation, and private and temporary quarries.
The protection of mining rights depends on the mining operations.
For prospecting, the authorisation confers on its holder a non-exclusive right of prospecting valid for substances targeted over the whole of the authorised zone. However, the prospecting authorisation does not confer any particular right for obtaining a mining title or disposing of the discovered substances for commercial purposes.
The prospecting authorisation is neither transferable nor transmittable. It constitutes a movable possession that cannot be lent or given as a guarantee.
For exploration, the permit confers on its holder, within the boundaries of its perimeter on the surface and indefinitely in depth, the exclusive right to explore for the mineral substances for which it is issued.
Any holder of an exploration permit that satisfies all its contractual obligations, in accordance with the clauses of the 2003 Code, is entitled to:
- take samples of mineral substances extracted during exploration work;
an exploitation permit or a mining concession; and
- be prioritised for the granting of an exploration permit for all substances other than those relative to its mining title and that could be discovered within the perimeter of the valid exploration permit.
A mining exploitation title confers on its holder:
- the exclusive right of exploitation and the free disposal of mineral substances for which the mining exploitation title has been issued, within the limits of the perimeter attributed and indefinitely in depth;
- the right to renew the title;
- the right to extend the rights and obligations attached to the mining exploitation title and other collecting and processing related to substances for which the mining exploitation title is issued (the holder is obliged to request an extension of its title to these substances within six months);
- the right to occupy an area of the national territory and free disposal of mineral substances attributed to it under the exploitation permit;
- the right to transform the exploitation permit into a mining concession in the case of discovery of significant additional proved reserves within the perimeter of the exploitation permit or within another adjoining perimeter belonging to the holder of the exploitation permit;
- a real state right distinct from the propriety of the land, registered as such and susceptible to mortgage. The decree granting the exploitation permit or mining concession is, in effect, a state-approved declaration for carrying out work in relation to the permits; and
- the right to give up, transmit or let its mining exploitation title, subject to prior authorisation of the Minister in charge of mines and payment of fixed taxes.
LENGTH OF MINING PERMITS
A small-mine permit will be issued for an initial term of five years. The term may be renewed for three years at a time without any limit on the number of renewals.
A mining permit will be issued for an initial term of between five and 20 years (depending on the mineral reserves identified and the investment required); the maximum term for an initial permit. Mining permits are renewable as many times as necessary until the resource is exhausted.
PRODUCTION SHARING AGREEMENTS
Senegal's Mining Code permits the state of Senegal and a mining company to enter into a production sharing agreement. This gives the mining company the exclusive right to research and mine a particular area and recover the cost of doing so from sale of the mined substance. The profits from the sale of the product are split between the state and the mining company in an amount specified in each individual agreement. Where a production sharing agreement exists, the mined substance will not be subject to the quarterly mining tax outlined above.
LOCAL DEVELOPMENT FUNDS
The 2016 Code introduces an obligation for mining title-holders to contribute annually to a local development fund.
Entry fees for the grant of small-mine permits and mining permits, and fees for research permits, semi-mechanised authorisations and quarry permits, will increase under the 2016 Code.
The 2016 Code introduces an annual surface royalty payable by all title-holders, including holders of research permits and quarry permits. This will be 50,000 West African CFA francs per hectare for a small-mine permit and 250,000 West African CFA francs per square kilometre for a mining permit.
The mining tax under the 2016 Code is structured so that all authorised mining activities will be subject to a quarterly mining tax levied on the market value of the commercialised product. The tax rate will vary depending on which substance is being mined. Rates for some common substances include iron ore (concentrate 5 per cent, locally processed 2 per cent), phosphate (calcium-aluminate and lime phosphate 5 per cent, phosphoric acid 1.5 per cent) and gold at 1.5 per cent.
SOCIAL AND ENVIRONMENTAL OBLIGATIONS
The 2016 Code introduces an obligation for mining title-holders to contribute annually to a local development fund in the amount of 0.5 per cent of sales, minus annual fees (unspecified).
Under the 2016 Code, small-mine permit holders will be required to provide a guarantee as security for the cost of rehabilitating their mine site. The gaurantee is in the form of depositing funds in a trust account with a Senegalese bank that will be used to rehabilitate the mine site.
Under the 2016 Code, all mining title-holders are required to:
- respect, protect and implement human rights in areas affected by mining operations;
- respect the provisions of the Forestry Code where the mining title has been granted over a classified forest zone; and
- respect the principles and obligations under the Extractive Industries Transparency Initiative (EITI), such as declaring all payments made to the state to the EITI authorities.
Senegal considers its human capital to be the driving force in its emergence trajectory (focus 2 of the Emerging Senegal Plan) for the diversification of its economy and development of social harmony and political stability in order to achieve “an emerging Senegal by 2035 with a civic-minded society governed by the rule of law”.
The education sector policy is set out in the Education and Training Quality, Equity and Transparency Improvement Program (PAQUET-EF) established for the period 2013-2025 and revised to be aligned with the international agenda (SDG 4, Strategy 2030).
The Senegalese education sector is divided into four levels, of which two are mandatory:
- pre-primary: at least 1 year between the ages of 5 and 6
- elementary: 6 years between the ages of 6 and 11
- lower secondary: 4 years between the ages of 12 and 15
- upper secondary: 3 years between the ages of 16 and 18.
From 2000 to 2018, access to technical and vocational and education and training (TVET) improved, as did the pursuit of higher education.
The gross enrollment ratio (GER) in higher education remains low—7% in 2017—which prevents Senegal from training sufficient professionals or senior technicians (“short degrees”) needed by the various sectors to increase productivity, attractiveness and innovation capacity.
The total population in Senegal was estimated at 16.2 million people in 2019. Senegal has a large and growing youth population this is due to Senegal’s high fertility. The rate of almost 4.5 children per woman continues to bolster the country’s large youth cohort and more than 60% of the population is under the age of 25.