Mining rights and titleState control over mining rights
To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?
The state is the owner of all mineral resources, according to the Angolan Constitution and the Mining Code, and the state sets forth the terms and conditions for their concession, exploration and mining, which gives it effective control over the grant of mining rights. Under the Mining Code, state-owned, mixed-ownership or private companies may be granted and enforce mineral rights for exploration and mining.
In contrast to the former Mining Law, the state is entitled to participate in mineral production in consideration for the grant of mineral rights for mining and marketing, through a state-owned company with at least a 10 per cent shareholding in the company to be set up for the mining stage, or a participation (or both) in kind (minerals produced) in a proportion to be defined (the proportion increases directly with the increase in the internal rate of return of the project).
Endiama EP is the national concessionaire for diamonds, rare metals and rare earth elements, and Ferrangol EP, is the national concessionaire for noble materials, ferrous and non-ferrous metals. Both concessionaires may establish unincorporated or incorporated joint ventures with other Angolan or foreign partners for the performance of their operations.Publicly available information and data
What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?
Concession decrees granting mineral rights are published in the Angolan Official Gazette and there is also a public registry for mining companies.
The executive branch produces and compiles all data on mineral resources and mineral reserves, but may authorise other public or private entities to perform those activities in duly justified cases. Private entities wishing to invest in the mining sector may consult available mining data at the MMRP; however, no official databases are available online.
Holders of exploration licences must submit periodic reports containing all data and information acquired during the programme on production and marketing of mineral substances and mineral activities carried out in order for the MMRP to be able to monitor and inspect mineral activities. Holders must also submit an updated work programme and a forecast of the minimum expenditures to be made in the following year.
Given the statutory requirement of a public tender to grant mineral rights over strategic minerals (ie, diamonds, gold, radioactive minerals, rare metals and rare earth elements), or in areas of high geological potential, MMRP is required to publish a list of the areas up for award and the relevant terms of reference in the Angolan Official Gazette or in a widely read newspaper, at least once a year and within question 1.Acquisition of rights by private parties
What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?
The Mining Code adopts a single-contract model for the entire mineral process. The former legal framework foresaw two separate contracts for mineral projects - one for exploration, evaluation and reconnaissance, and another for mining and marketing. The Mining Code divides mineral activities into three stages - reconnaissance and exploration, appraisal and mining - explicitly stating that the rules, rights and obligations for the three stages will be set forth in the relevant mineral investment contract.
Under the former legal regime, in addition to spontaneous applications, the state could organise public tenders or issue invitations to tender for the award of exploration licences for one or more previously designated areas. Conversely, the Mining Code clearly prefers public tenders, which can be either optional or compulsory, depending on the geological potential of the relevant area or the ‘strategic’ classification of the mineral in question.
Minerals are classified as ‘strategic’ if warranted by their economic importance, use for strategic purposes, or specific technical mining aspects. The mineral’s rarity, relevant impact on economic growth, high demand on the international market, significant job creation, importance for state-of-the-art technology, positive influence on the balance of payments or importance to the military industry are deemed as fundamental factors to be weighted by the executive branch when classifying a mineral as strategic. Diamonds, gold and radioactive minerals are expressly defined as strategic minerals in the Mining Code and rare metals and rare earth elements were also recently defined as strategic minerals in Presidential Decree 231/16, of 8 December 2016.
If no public tender is required, mineral reconnaissance, exploration, evaluation, appraisal and mining rights will be granted on a first-come, first-served basis. The applicant is merely required to demonstrate that it possesses the technical and financial capacities required to carry out the mineral activities for which it has applied.
The following titles are issued for mineral rights:
- exploration title - for the reconnaissance, exploration, evaluation and appraisal of mineral resources;
- mining title - for the mining of mineral resources;
- mineral permit - for the exploration or mining of mineral resources used in civil construction; and
- mineral ticket - for artisanal mining.
Among several other obligations, holders of mineral rights must:
- ensure the hiring of Angolan technicians and workers and provide training and technical and vocational instruction to the employees;
- apply the methods most suited to obtain maximum yield consistent with market economic conditions, environmental protection and sound exploitation of the mineral resources, without carrying out rapacious mining;
- relinquish the initial area covered by the mineral rights for exploration step-wise;
- ensure and enforce compliance with the rules on health and safety at work and the requirements of the environmental impact assessment study;
- report on the impact of the mineral activities on land occupancy and environmental characteristics; and
- repair the damage caused to third parties by the performance of geological and mineral activities.
Under the single-contract model, all mineral rights (from exploration to marketing, including evaluation, reconnaissance and mining) are formally granted from the outset pursuant to the mineral investment contract. However, the holder of the relevant mineral rights is required to obtain an exploration title - issued at the same time with as the approval and gazetting of the mineral investment contract - and a mining title, as a condition for the exercise of the rights granted to it. The transition of a given mineral project from the exploration stage to the mining stage is subject to the preparation and approval of a ‘technical, economic and financial viability study’. The mining title is then issued after the study is approved (which must include an environmental impact study), and the holder of the relevant rights can exercise its mining and marketing rights from then on.Renewal and transfer of mineral licences
What is the regime for the renewal and transfer of mineral licences?
Exploration, evaluation and reconnaissance rights may be granted for an initial period of up to five years and extended by successive one-year periods up to a maximum seven years. If the seven-year period proves insufficient to prepare or complete the feasibility study, the holder of the mineral rights may apply for and be granted an exceptional one-year extension.
Mining rights are granted for a period of up to 35 years (which includes the exploration and appraisal stage), extendable by one or more 10-year periods. Holders applying for extension must justify their application by submitting the relevant technical, operational and other grounds. Extensions are only granted if the applicant is not in breach of its legal and contractual obligations.
Mineral rights may be transferred upon specific authorisation from the MMRP or the Head of the Executive, as applicable, which is only granted to prospective assignees that meet the same (technical and financial) requirements as the original rights holders. Although mining laws do not specifically address the issue, changes of control of the holders of mineral rights or their parent companies are typically notified to the MMRP. No consent or authorisation is legally required per se, but it is an expression of courtesy that will help maintain a sound institutional relationship with the relevant authorities and avoid charges that the change of control at stake was actually a way of circumventing the authorisation required for the transfer of the relevant mineral rights.Duration of mining rights
What is the typical duration of mining rights?
See question 11 for the duration and extension of mineral rights. Concession contracts may be terminated early and concession titles withdrawn in some of the following instances:
- termination or withdrawal is triggered under specific contractual clauses;
- the project becomes technically or economically unviable;
- breach of legal obligations, contractual obligations or obligations arising from the concession title;
- abandonment, suspension or reduction of the mineral operations, except as provided for in the Mining Code, the title or the contracts;
- suspension of mineral operations owing to force majeure events, as defined in the contract or concession title;
- the concession holder is convicted of a crime of aggravated contempt, because it failed to perform acts provided for in the Mining Code or ordered by the relevant authority;
- reconnaissance, exploration, evaluation and appraisal or mining of mineral resources not included in the contract or concession title; and
- performance of the contractual obligations is impossible.
Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?
Angolan law does not require the participation of local partners in mineral concessions, therefore, both foreign and local mining companies (owned by Angolan nationals) may be awarded concessions and engage in the exploration and mining of minerals. The national concessionaires (Endiama EP and Ferrangol EP) may partner with local or foreign entities in connection with mineral projects, as members of unincorporated joint ventures set up for the exploration stage and as shareholders of the companies incorporated for the mining stage.
The award of mineral mining and marketing rights entitles the state to participate in mining concessions. Other than that, there are no industry-specific rules or restrictions on corporate structures, nor are there mandatory participations or ownership interests reserved for national associates. However, preference is to be given to national partners or companies when setting up a business partnership.
Semi-industrial and artisanal mining of diamonds and construction minerals are the exception to the rule; only Angolan citizens are allowed to carry out diamond artisanal mining operations and only Angolan citizens or legal persons whose share capital is majority-held (two-thirds) by Angolan citizens may be awarded mineral rights for semi-industrial mining of diamonds, exploration and mining of construction minerals and mining rights of mineral-rich watersProtection of mining rights
How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?
Investors are afforded broad legal guarantees:
- the unrestricted right to mine the mineral resources discovered during exploration, except as expressly provided for in the Mining Code or ancillary legislation;
- the right to freely dispose of and market the mining products;
- the right to recover investment expenses incurred during the reconnaissance, exploration, evaluation and appraisal stage from the mining proceeds; and
- the right to be compensated for any losses resulting from actions limiting the exercise of mineral rights, under the law or the mineral investment contract.
The PIL reinforces these guarantees by offering additional protection to foreign investment, namely in matters of expropriation.
In contrast to the former legal framework, which foresaw arbitration in Angola as the proper mechanism to resolve any disputes that could not be resolved amicably between the parties, the Mining Code is silent on the proper venue to resolve disputes, leaving it up to the dispute resolution clauses of mineral investment contracts. Contracting parties tend to include arbitration clauses in their agreements; however, disputes arising from termination of the concession contract or withdrawal of the concession title must be resolved by national courts, and disputes on the significance or insignificance of minerals extracted during the reconnaissance, exploration, evaluation and appraisal stage for purpose of assessment of the relevant tax should be settled by the Minister responsible for the mining sector.
Angola is a signatory of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 and so international arbitral awards are recognised and enforceable in Angola, provided they are handed down in another contracting state. The convention entered into force in Angola on 4 June 2017.
The Angolan Constitution states that courts are independent and cannot accept any form of interference from any other public body. Their decisions are final (subject only to appeal) and prevail over other entities’ decisions.Surface rights
What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?
Holders of exploration licences or mining titles do not acquire surface rights in relation to the concession areas. If the land belongs to private persons or is in the private domain of the state or of public law corporate bodies, holders of mineral rights will need the consent of the relevant owners or occupants to use or exploit the land, on the terms that may be agreed between the parties. This consent is also required for any geological-mineral investigation works involving use of the land. Consent is presumed given in case of deposit of the annual rent and the provisional bond set forth in the Mining Code.
If the concessionaire fails to reach an agreement with the owners or occupants of the land within the boundaries of any demarcated area during the mining phase it is barred from starting any operations until it either purchases the land or the state expropriates the land for reasons of public interest, pursuant to the law.
Conversely, private owners of a surface right over a certain area are not entitled to carry out exploration or mining activities without first securing the relevant exploration licence or mining title.Participation of government and state agencies
Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?
As mentioned in questions 8 and 13, the state is entitled to participate in the mineral production (either through a minimum 10 per cent shareholding in the company holding the mining rights, a production-sharing mechanism or a combination of the latter). Endiama EP is involved in projects in connection with diamonds, rare metals, rare earth elements and Ferrangol EP is involved in projects in connection with noble materials, ferrous and non-ferrous metals, as members of the relevant unincorporated joint ventures or as shareholders of the companies holding the relevant mineral rights.
The project company is required to establish a legal presence in the country (eg, a subsidiary organised and run under Angolan law or a local branch of a foreign company), just as any other company wishing to engage in activities that require a physical presence in Angola. The set-up of foreign special-purpose vehicles or registration of any special-purpose vehicle branches in Angola, although not legally prohibited per se, is a practical impossibility in light of state participation requirement.Government expropriation of licences
Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?
The Mining Code lists mineral investment contracts’ termination events and the grounds for withdrawing concession titles and also foresees the possibility of redeeming the concession area for reasons of public utility in the event of discovery of strategic mineral resources or minerals subject to a special framework (whose mining is in the higher interest of the national economy), subject to a fair compensation to the holder of the relevant mineral rights.
The compensation will be calculated on the basis of:
- the amount of the investment made in the exploration, evaluation, reconnaissance and appraisal stage;
- the unrecovered amount of the investment made in the exploration, evaluation, reconnaissance and appraisal stage, in case the project has already moved on to the mining stage; and
- the value of the assets redeemed (including real estate property acquired for the exercise of the mineral rights), the average estimated profit for the next 10 years of mining and the outstanding debts.
Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?
Under the Mining Code, mineral rights may be awarded for areas in the territorial or maritime domain under the jurisdiction of the Republic of Angola that have not been granted for the carrying out of other activities, or that are not allocated to the same. The executive branch may also declare portions of the national territory with considerable mineral potential as ‘mineral reserve areas’, which will then be restricted in terms of movement of people and goods.
To date, no areas of Angolan territory have been declared as mineral reserve areas.