In February 2019, the Government issued the new Law of Mineral Wealth. The New Mining Law recognizes the Public Authority for Mining (PAM) as the competent authority for mining activities. Article 2 of the New Mining Law states:
“Subject to the provisions of the Economic Zone of Duqm Law, the Authority shall without exception, conclude concession agreements, issue licences related to the exploration, excavation and utilization of raw materials, or carry out any related activity. The Authority also regulates the process of exploration, excavation and utilization of raw materials and exercises control and supervision over everything related thereto to ensure its preservation and good utilization”
- Under the New Mining Law, The licence periods for exploration and excavation shall be one year, renewable but not exceeding three years, whereas the licence period for utilisation/exploitation is five years (renewable). The period for concession agreements is between 20 and 30.
- The New Mining Law also sets out some parameters in terms of royalty and rent payments, such as:
- Financial guarantee of not less than 1% of the value of the cost of the project
- Annual rental value of not less than 5% of the total production of the raw material used by the licensee
- Payment of not less than 1% of the total annual production of raw materials for the development of the local communities
The Mineral Wealth Law, which came into effect in March 2019, reinforces PAM’s regulatory position in the sector. It is investment-driven legislation that has the potential to transform the sector by streamlining investment procedures and increasing licensing transparency. “The law is based on the results of a comprehensive assessment study on the mineral sector and is guided by a number of relevant national and regional legislations and regulations,” Hilal bin Mohammed Al Busaidi, CEO of PAM, told local media. “PAM has ensured that the law includes incentives for developing the mineral sector, boosting its investment appeal, and facilitating and expediting the procedures for obtaining mining approvals,” he said. Drafted in collaboration with a number of international advisors, such as legal firm Mayer Brown and consultancy firm Wood Mackenzie, the law encourages investment in a number of ways. Licences for exploration and prospecting now may be granted for terms of one year, renewable for periods of up to three years. The licence period for exploitation is up to five years, while also being renewable for longer periods.
Meanwhile, concession agreements for large deposits may be granted for intervals of between 20 and 30 years. Furthermore, the fiscal regime has been revised to make royalty payments more flexible. Where previously the royalty was set at 10%, it was dropped to a minimum of 5%, dependent on market conditions. For non-metallic materials, such as aggregate, gypsum and marble the royalty is fixed, while for metallic elements it is likely to remain at 6%. PAM hopes that tying payments to the economics of the relevant projects will spur investment in the sector
Public Authority for Mining (PAM)
PAM is granted a wide range of powers under the New Mining Law which includes:
- Expropriation of property
- Approving exports of raw materials.
- Inspection rights and right to access sites and obtain samples.
- Revocation of licences under certain circumstances such as:
- Delay in commencement of works by licensee
- Suspension of works by licensee
- Delay in payment of fees
- Failure by licensee to provide reports
- Obstruction by licensee of employees of PAM
- Violation of licence terms.
- Engaging in unauthorized activities.
- Not maintaining books and records by licensee.
- Change of status of licensee (legal form, change of shareholders, merger, etc.
Ministry of Commerce Industry and Investment Promotion (Issuing Authority For Commercial License)
Civil Defence and Ambulance Authority
Dhofar Municipality (For Dhofar Mining and Quarrying)
Muscat Municipality (For Muscat Mining and Quarrying)
Ministry of Interior
- Fulfill and fill in specific requirements and application forms.
- If the information you provide passes inspection, you will receive an approval from the dedicated government entity.
- An approved license shows that you are eligible to perform the chosen business activity.
- You will need to provide a tenancy agreement that is connected to your Place of Activity.
- You may need to provide additional permits from your local municipality, depending on your Place of Activity.
• Environmental Impact Assessment (EIA)
• Approval from General Authority for Mining
• Use the e-service portal (https://portal.minesandsteel.gov.ng) to apply for the license
• Fill in the application
• Pay the fees
• It will be reviewed, and you will be notified once your license is granted