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Legal framework

Guinea declared independence from France on 2 October 1958 with Ahmed Sékou Touré as President. In the 26 years of his presidency (1958–1984), the country suffered from diplomatic isolation and was largely closed to international investment. The development of the mining sector was managed by the state, and the involvement of foreign companies was limited and negotiated on a case-by-case basis without the benefit of a general legal framework for the sector. The Ministry of Mines was not set up until 1981.

Between 1984 and 2008, Guinea was ruled by General Lansana Conté, a period during which the country sought to open itself up to foreign investment.

In this context, the first Mining Code was adopted by Order No. 076/PRG/86 of 21 March 1986 (the 1986 Mining Code). Inspired by the desire to accelerate economic development, the 1986 Mining Code attempted to create a more favourable environment for foreign investment and to reduce the state's involvement in the mining sector.

The adoption of the 1986 Mining Code was supported by the World Bank and the International Monetary Fund (IMF). This was part of a wider effort by these organisations to reduce investment risks and uncertainties and to improve the deteriorating financial situation of certain developing countries under structural adjustment programmes.

The 1986 Mining Code, inspired by the French Mining Code and comprising 148 Articles, set up three types of mining titles (exploration permit, exploitation permit and concession, a long-term mining title covering both exploration and exploitation work) and provided for specific rights and obligations in relation to each of them.

Following the adoption of the 1986 Mining Code, Guinea adopted an investment code by Order No. 001/PRG/87 of 3 January 1987. It aimed to reopen the Guinean economy to the private sector by guaranteeing that there would be no discrimination between foreign and national investors, providing for freedom to transfer capital (including profit repatriation) and offering protection against nationalisation.

The 1986 Mining Code has often been highlighted as an example of the first generation of mining policies characterising the economic liberalisation of the 1980s, described collectively by the World Bank as the 'Strategy for African Mining' in its 1992 report of that title.

The 1986 Mining Code was regarded positively by investors but did not lead to the expected surge in investments, as a result of continued uncertainty regarding state participation in the mining sector, among other reasons.

As a consequence, a new Mining Code (comprising 186 Articles) was enacted by Law No. L/95/036/CTRN of 30 June 1995 (the 1995 Mining Code) with a view to:

  1. promoting further transparency, limiting the discretionary powers of the state and providing greater clarity on state participation;
  2. simplifying and clarifying permission procedures, in particular establishing a new department – the Centre for Mining Promotion and Development (CPDM), financed by the World Bank and the IMF and intended to act as a 'one-stop shop' for investors;
  3. guaranteeing certain rights to investors (e.g., the right to dispose freely of mineral substances and the freedom to import goods and services);
  4. providing for more detailed tax provisions and making the fiscal regime more attractive to investors; and
  5. providing for more detailed environmental obligations, including a requirement that all operations comply with the Environment Code that was adopted in 1987.

The 1995 Mining Code fits into the pattern of the second generation of African mining codes introduced in the early to mid 1990s, which continued the trend of liberalisation and privatisation while recognising the need for enhanced social and environmental requirements.

The 1995 Mining Code was also positively received by investors and led, in conjunction with increasing commodity prices (in particular for iron ore and gold), to increased foreign investments in the sector. However, it was also criticised for a number of reasons, including a failure to pass the necessary secondary legislation referred to in the 1995 Mining Code (including with respect to a model form mining convention).

In order to represent and manage the state's activities in the mining industry, SOGUIPAMI (Société Guinéenne du Patrimoine Minier) was created by Decree No. 218/PRG/ SCG dated 11 August 2001. SOGUIPAMI is a state-owned company responsible for managing the shareholdings held by the state in mining companies and the development of mining permits. In addition, SOGUIPAMI is entitled to hold research permits either on its own or in partnership for promotion purposes. As a result of Decree No. 2019-123 dated 19 April 2019, the oversight of the company has been transferred from the Ministry of Mines to the Presidency.

In 2008, the army seized power in a military coup led by Moussa Dadis Camara, which led to two years of social unrest and economic instability. A number of commissions were also set up to revise the 1995 Mining Code in 2008 and 2009.

In January 2010, General Sékouba Konaté assumed power as interim President. Guinea set up a transitional Parliament by Order No. 001/PRG/CNDD/SGPRG/2010 of 9 February 2010, but on 21 December 2010, the long-time opposition leader, Alpha Condé, was inaugurated as the country's first democratically elected President since independence. It was the height of the commodities boom and a reform of the mining sector was a key element of Alpha Condé's electoral campaign.

The 1995 Mining Code underwent profound review and a new code was approved by the National Transitional Council by Law No. L/2011/006/CNT of 9 September 2011 (the 2011 Mining Code). With its 221 Articles, the 2011 Mining Code was intended to be the cornerstone of Guinea's reform of the mining sector, raising the contribution of the mining sector to the government's revenue, promoting Guinea's economic and social development and enhancing its attractiveness by improving transparency.

The 2011 Mining Code introduced a number of key changes, in particular:

  1. the state's entitlement to a 15 per cent free carried interest in exploitation projects relating to iron ore, bauxite and gold (which was the most publicised change);
  2. the requirement for minimum investment obligations for the issuance of concessions;
  3. a prohibition for mining conventions to derogate from the terms of this new code;
  4. the requirement for holders of exploitation permits and concessions to enter into 'development agreements' with local communities living around the areas of operations;
  5. detailed environmental and rehabilitation obligations;
  6. the introduction of a new tax regime, including amendment of the surface royalty and extraction tax;
  7. a number of transparency and anti-corruption initiatives, including:
    • the introduction of 'know your client'-type disclosure requirements;
    • an obligation to enter into a code of good conduct providing for, inter alia, compliance with the principles of the Extractive Industries Transparency Initiative, to which Guinea adhered to in 2005 and acceded to in 2007;
    • an obligation to file an annual anti-corruption plan detailing, inter alia, actions undertaken to prevent corruption; and
    • an undertaking to publish all mining titles and conventions on the internet; and
  8. the setting up of a National Mining Commission, comprising a Strategic Committee and a Technical Committee, in charge of supervising the activities of the CPDM.

Guinea also launched, by Presidential Decree D/2012/045/PRG/SGG, a review process managed by the Strategic and Technical Committees with a view to renegotiating and harmonising mining conventions with the 2011 Mining Code, which was completed in April 2016.

By the time the 2011 Mining Code was published and entered into force, commodity prices had declined and the 2011 Mining Code was criticised for being influenced by 'resource nationalism'. As a consequence, Guinea amended the 2011 Mining Code by Law No. L/2013/053/CNT of 8 April 2013 (the 2011 Mining Code as amended in 2013, 'the Mining Code'), with a view to introducing:

  1. decreased maximum area limitations for exploration permits;
  2. reduced investment thresholds for the issuance of a mining concession;
  3. reduced royalty and tax rates and increased stabilisation periods for certain tax rates from 10 to 15 years; and
  4. increased flexibility in relation to the transfer of the infrastructure's ownership to the state and applicability of this new code to existing mining conventions.

Law No. L/2013/053/CNT was promulgated by Presidential Decree D/2013/075/PRG/SGG dated 17 April 2013. It was published in the Official Gazette and entered into force in June 2013.

Further regulations were then adopted to implement the Mining Code, including four decrees in January 2014: (1) Decree D/2014/012 on the management of the authorisations and mining rights; (2) Decree D/2014/013 on the implementation of the financial provisions of the Mining Code; (3) Decree D/2014/014 on environmental and social impact assessment for mining operations; and (4) Decree D/2014/015 adopting a model form mining agreement. Order A/2016/5002/MMG/SGG adopted on 1 September 2016 specified a new cadastral procedure. To the best of our knowledge at the time of writing, these texts are still expected to be published in the Official Gazette. In practice, the relevant Guinean authorities operate on the basis that these implementing regulations are in effect (indeed, a number of these decrees explicitly provide that they came into effect immediately upon signature).

Decree D/2015/007/PRG/SGG dated 14 January 2015 also finally puts in place a system for an accelerated management and monitoring of the files for the development of integrating mining projects with investments of US$1 billion or more.

Finally, Guinea adopted Law No. 0032/2017/AN as promulgated by Decree No. 0/2017/278/PRG/SGG dated 24 October 2017 on public-private partnership. Although mining rights are excluded from its scope, this Law will apply to integrated mining projects comprising both mining and infrastructure aspects. To the best of our knowledge, at the date hereof, the implementing decrees of Law No. 00325/2017/AN have not been adopted yet.

Mining rights and required licences and permits

i Title

Article 3 of the Mining Code states that mineral substances within the territory of Guinea are the property of the state and cannot be subject to private appropriation except as provided for by the Mining Code.

The Mining Code provides for a separation between ownership of minerals while they are in the ground and ownership of minerals once extracted. A private party that holds a mining right granted under the Mining Code acquires ownership of any minerals it extracts pursuant to that mining right.

ii Surface and mining rights

Articles 17 et seq. set out three types of mining titles with the following key rights and obligations.

Key rights and obligations

Exploration permitExploitation permitConcession
PurposeExclusive right to exploreExclusive right to explore, exploit and dispose ofExclusive right to carry out all kinds of mining operations
Maximum initial term3 years15 years25 years
Maximum area500km2 (bauxite and iron ore)100km2 (other)Based on deposits identified in a feasibility study
Maximum numberThree (bauxite)Three (iron ore)Five (other)N/AN/A
Key requirements
  • The permit will specify a minimum work programme, including minimum expenditure per km² to be set out in implementing regulations.*
  • Exploration work must begin within six months of the grant of the permit.
  • An environmental impact notice must be filed before works commence; this must take place no later than six months after the grant of the permit.
  • Development work must begin within one year of the grant of the permit or concession.
  • A penalty of 10 million Guinean francs per month for an exploitation permit, and US$2 million per month for a concession, is due for the first three months of delay if work has not begun within this time.†
  • The state may revoke the title if development work has not begun within 18 months of the grant of an exploitation permit or two years of the grant of a concession.
  • Commercial production must start within four years of the issuance of the permit if the ore is to be exported or five years if the ore is to be processed locally (five or six years, respectively, for a concession), otherwise a penalty for delay based on the gap between planned and actual expenditure may be applied.
  • Obligation to fund an environmental rehabilitation trust account to guarantee the rehabilitation and closure of the mining site.‡
State participationN/ANon-contributing, carried interest of 15 per cent for iron ore, bauxite and gold upon the grant of the title and up to a further 20 per cent interest on terms to be agreed with the title-holder.
TransferabilityNoYes – subject to approval by the Minister of Mines, an environmental audit and a health and safety audit.
* Decree D/2014/012 on the management of the authorisations and mining rights (see above) sets the minimum expenditure at US$500 per square kilometre per year and provides that expenditure incurred abroad will be taken into account up to a certain amount, which will be set out in a joint order of the Ministries of Mines and Finance.† This amount will increase by 10 per cent per month from the fourth month of delay until the 12th month of delay.‡ The terms of this account will be detailed by a joint order of the Ministers of Mines, Environment and Finance.

Application process

Exploration permitExploitation permitConcession
Conditions for grantSufficient financial and technical capabilities*
N/AGuinean-registered entities
N/AN/ARequires an investment of at least US$1 billion in relation to iron ore and bauxite or US$500 million in relation to gold and certain other substances.
If exploration work has been undertaken by the state, the state may seek reimbursement on the basis of an assessment by an independent auditor.If the exploitation permit or concession is granted to someone other than the entity that made the discovery, a fair compensation must be paid to the latter to cover the exploration costs that have been incurred.
Process for grantIf no deposit has been identified, awarded on a first-come, first-served basis.If an exploration permit is in place, an application must be filed no later than three months before the end of its term.
If a deposit has been discovered, based on a competitive tendering process.If there is no exploration permit, or the holder of the relevant exploration permit does not apply, based on a competitive tendering process.
Granted by an order of the Minister of Mines upon recommendation of the CPDM following approval of the Technical Committee.Granted by ministerial decree upon recommendation of the Minister of Mines following approval by the National Mining Commission.
Key documents for grant
  • Work and expenditure commitments deemed acceptable.
  • Environmental impact notice to be filed before the start of the work and no later than six months after the date of award.
A feasibility study including:
  • a detailed schedule of the work;
  • an environmental and social impact study (including a hazard study, a risk management plan, a health and safety plan, a rehabilitation plan and a resettlement plan detailing, inter alia, compensation for persons displaced by the project);
  • a plan for supporting Guinean companies; and
  • a community development plan providing, inter alia, for the training of the local community, to be annexed to a local development agreement to be signed upon the grant of the permit or the concession.†
* The definition of 'financial and technical capabilities' will be set out in a presidential decree. The Management Decree defines 'financial and technical capabilities' as the 'minimum professional, technical and financial requirements that are deemed to be necessary by the awarding authority', based on the deposit in question and the mining title requested.† The process to be followed to enter into local development agreements with local communities will be set out in a joint ministerial order.

Renewal process

Exploration permitExploitation permitConcession
Number of renewalsTwoUnlimitedUnlimited
Term of renewals2 years5 years10 years
Time for applying for renewalsThree months before end of termSix months before end of termSix months before end of term
ExtensionsMay be granted for a term not exceeding one year if a feasibility study is not completed by the end of the second renewal for justified reasons.N/AN/A
Relinquishment50 per cent on each renewalN/AN/A

In addition to the foregoing, Article 18 of the Mining Code provides that mining agreements will be entered into with holders of concessions and exploitation permits on the basis of a model form mining agreement. The model is provided by Decree D/2014/015/PRG/SGG adopting a model mining agreement and dated 17 January 2014. Mining agreements are intended to supplement the provisions of the Mining Code. Although mining agreements are to be ratified by the legislature, as was the case under the 1995 Mining Code, the Mining Code provides that mining agreements may not deviate from the terms of the Mining Code.

iii Additional permits and licences

The Mining Code provides in a number of different Articles that mining companies operating in Guinea must comply with all applicable Guinean mining laws and regulations. Articles 120, 143 and 144 state that specific authorisations are required for certain operations, including land clearing, building of communication transmission lines or infrastructure and disposal of non-recycled waste. In practice, numerous additional permits and approvals are required for mining projects. It is therefore advisable for operators to implement a strict compliance methodology to secure and maintain the required permits and approvals from the relevant authorities.

iv Closure and remediation of mining projects

According to Article 131 of the Mining Code, mine closure must be notified 12 months in advance and a closure plan must be filed six months before the date of closure in order to:

  1. eliminate health and safety risks;
  2. rehabilitate the site to a condition acceptable to the local community; and
  3. restore vegetation with similar characteristics in the surrounding area.

Following a rehabilitation inspection by the Ministry of Mines and the Ministry of the Environment, a notice of discharge will be issued. This notice will discharge the title-holder from all obligations in relation to the mining title. Should the site fail this inspection, rehabilitation work will be carried out by the administration at the expense of the title-holder.