Senegal is on the verge of adopting a new mining code to replace the 2003 mining code currently still in force. The draft mining code has been a work in progress since November 2012 following the election of Macky Sall as President of Senegal. The President, who is a geologist engineer by training and has served as Minister of Mining & Geology, had prioritised mining reform in his 2012 election campaign in recognising the importance the mining sector holds for Senegal.

The aim of the reform is to attract more foreign investment in order to drive economic growth in Senegal and increase the contribution of the mining sector to the country’s gross domestic product. Mining has been selected as one of the main priority sectors of the Plan for an Emerging Senegal (PSE) designed and is strongly supported by the President.


Parallel to this decision to revise the 2003 mining code, a presidential decree established the Commission for the Revision of Mining Contracts and the Mining Code (Commission de revision des contrats miniers et du code miner) which is exclusively composed of representatives of public institutions (Government, Parliament, Economic and Social Council).

The mandate of the Commission is twofold: to revisit existing mining contracts; and to revise the 2003 mining code in order to bring about important changes including (1) the strengthening of local development-related provisions, (2) the shortening of deadlines on starting work plan implementation, and (3) the increase of transparency obligations on title holders as well as the Senegalese government whereby all payments have to be made public. Senegal is an Extractive Industries Transparency Initiative (EITI) Candidate country.

These changes to the draft mining code were based on recommendations formulated from different sources, including a World Bank funded study on the Assessment of the Legal and Fiscal Framework of the Senegal Mining Sector, as well as input from the Commission for the Revision of Mining Contracts and the Mining Code and public consultations held across the country.

The overall objective of the draft mining code is to increase revenues to the government and the local communities from the mining sector, while still keeping the investor friendly incentives offered in the current 2003 legislation.

In terms of scope of application of the draft mining code, once enacted, it will only apply to mining titles issued on or after its date of enactment. Mining firms that acquired their mining titles in Senegal under the current 2003 mining code or earlier regimes will not be bound by its provisions retroactively.

Main innovations contained in the draft mining code

While the draft mining code does not represent a complete overhaul of the 2003 mining code, it does include a number of important changes, as set out below:

Future typology of mining titles

The distinction introduced by the 2003 mining code between a mine permit and a mine concession is considered to be confusing. The draft mining code will introduce distinctions between small mine permits and mining permits. In particular, a small mine permit will be limited to mining projects with a daily treatment capacity of 500 tonnes of minerals and a mining area of 500 hectares, whereas for mining permits, there will be no limitation on the scale of operations the title holder is able to conduct.

The new mining code will also allow investors to apply for a semi-mechanised mining authorisation for mining operations of a maximum size of 50 hectares that use artisanal methods.

Further, the notion of a mining concession (concession minière), has been replaced by that of an exploitation permit (permit d’exploitation), which the drafters considered to be legally more explicit. It is important to emphasise that current mining concessions will continue to be governed by the 2003 mining code until their expiration dates.

The term exploitation permit will include the detailed rights and obligations, as negotiated by the parties; they will be so used for mining agreements issued after entry into force of the draft mining code. The name change will not therefore result in legal consequences.

Timeframe for the validity of mining titles

The draft mining code provides for the granting of small mine permits for an initial

term of five years instead of three years under the current legislation. These five years may be renewed for three years at a time without limit to the number of renewals. As to mining permits, the initial term will range between five and 15 years depending on the targeted mineral reserves and the investment required. Mining permits will be renewable as many times as necessary until the end of production. It is noteworthy that under the current legislation a mining concession can be granted for up to 25 years.

Once a mining permit is granted, the investor can negotiate a mining agreement under the condition that the agreement:

  • is published on the Ministry of Mining and Trade website after execution;
  • does not contradict the provisions of the draft mining law, although it may supplement them; and
  • sets out the rights and obligations of the parties including the stability of the legal conditions under which the mining title was granted.

Foreign ownership of mining titles

The draft mining code removes the restriction on foreign ownership of mining interests. Foreign investors can now own 100 per cent of the shares of a company holding a mining title, although such a company must be registered in Senegal.

New changes in fees, royalties and overall fiscal revenue

These changes relate to fees, royalties and taxes. Under the draft mining code, the entry fees for research permits, semi-mechanised mining authorisations and quarry permits will be increased, but not substantially. The same applies to small mine permit and mine permits.

The draft mining code will introduce an annual surface royalty payable by all title holders, including holders of research permits and quarry permits. The annual surface royalty will be calculated per hectare or square kilometer at a rate of 2500 FCFA per hectare for small mine permits and 250,000 FCFA per hectare for mining permit.

Regarding the fiscal regime, under the draft mining code, mining firms will no longer have to resort to the mining code for information regarding fiscal and custom regimes applicable to their project. Indeed, all tax provisions included in the current legislation, except the mining tax, will be transferred to the General Tax Code (Code Général des Impots).

While the mining tax has not been transferred to the General Tax Code, its application has, however, been revised to now subject all mining activities to a trimestrial mining tax levied on the market value of the commercialised product. The rate of the trimestrial mining tax will be increased based on the type of mineral being mined.

Tax relief

Changes have also been made to the various tax benefits contained in the 2003 mining code. For example, mining title holders will now be exempt from all taxes and fees, including value added tax (VAT) and COSEC port charges during the period commencing on the date of entry into force of the mining permit (or small mine permit), and ending on the first date of commercial production (called the Investment Period). However, taxes such as (1) the statistical royalty, (2) the community solidarity levy, (3) and the community levy, among others have been retained. In addition, mining title holders will no longer be exempted from the payment of export taxes in relation to products mined within the area of their mining permit. It is worth noting that the above-mentioned provisions will be applicable jointly with any other applicable taxes and tax exemptions contained in the General Tax Code.

Introduction of Production Sharing Agreements (PSA)

Under the draft mining code, the state will be entitled to enter into a PSA with a mining company. Under such agreement, the mining company will granted the exclusive right to research, develop and exploit a mine in a particular area and recover the costs incurred from the proceeds of the sale of the product. The remaining part of the sale of the production will be split between the state and the mining company. Each PSA will be required to provide the details of the contractual arrangement between the parties. The mining production under the PSA will not be subject to the abovementioned trimestrial mining tax.

Contribution to local development

In order to promote the social and economic development of local communities living in the mining areas, the draft mining code will make it mandatory for mining title holders to contribute to a local fund annually. The amount of the contribution will be specified in each title holder’s mining agreement.

New compulsory obligations for mining title holders to meet

Contrary to the 2003 mining code, the draft mining code will require research permit- and small mine permit holders to provide guarantees as security for the cost of rehabilitating the areas under investigation or the mining sites. A joint ministerial Order of the Ministry of Mines & Industry and the Ministry for Environment will provide the details of the guarantee to be posted.

The same obligation would apply to mining permit holders under the draft mining code with the particularity that a trust account with a local bank must be established into which the funds that would be used for the rehabilitation of the mine site are deposited.

In addition to rehabilitation obligations, all mining title holders will specifically be 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 EITI, such as declaring all payments to the state to the national EITI authorities, including social development payments.

New penalties for mining title holders

The draft mining code provides for a great range of penalties and sanctions including, but not limited to: non-payment of taxes; not commencing work programs withinthe agreed timeframes;  irregularities in documentation or failure to provide requested documentation; illegal mining activity and theft of mine substances; illegal storage, transport or sale of mineral substances; fraud; and health and safety violations.

New audit and transparency requirements

In addition to being bound by theirEITI commitments, the state and mining companies will be subject to more stringent audit and transparency obligations. For example, the state will have the right to appoint an independent firm to audit the accounts, facilities, infrastructure, systems and procedures of any mining company.

Further, there will no longer be confidentiality over the publication of all mining revenues owed to the state. The state will be compelled to make public all contracts and related financial statements.


In revising its mining legislation, Senegal is following the trend currently observed in West Africa aimed at increasing state revenues to boost their GDP, introducing more stringent social and environmental safeguards and improving the social and economic conditions of local communities residing in the areas of the mining site.

At the same time, the draft mining code seeks to bring about more transparency in mining operations and better governance of the mining sector aimed at attracting more foreign investments in a sector considered as a priority for Senegal’s socio-economic development.