Mines and Minerals Act (2009)

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The Mines and Minerals Act was ratified at the end of 2009 replacing the Mines and Minerals Decree of 1994.[1] The Act sets out the general parameters for the regulation and monitoring of mining operations.[2]. It also provides the fiscal and legislative framework for Sierra Leone's mining contracts (together with the Income Tax Act and Finance Act of 2010) and sets out details of Corporate Social Responsibility in the mining sector.[3]

Regulation and monitoring of mining operations

According to the 2009 Act, the duties of the Director of Mines include:[4]

  • exercising regulatory administration and supervision over all reconnaissance, exploration, and mining operations
  • carrying out investigations and inspections necessary to ensure compliance with the provisions of the Act
  • advising holders of mineral rights on proper and safe mining methods

Further, the Act empowers the Director of Mines and the Director of Geological Survey to inspect mine sites and take samples of soil, tailings and minerals.[5] It also gives the Director of Mines the authority to inspect company accounts, documents and records and to provide guidelines to companies with respect to the health and safety of employees.[6]

Fiscal terms

Compared to the previous law, the 2009 Act raised royalty rates for precious stones and minerals. For instance, diamonds now carry a 6.5 percent royalty which is up from five percent in the previous Act.[7] Precious metals such as gold have a five percent royalty up from four in the previous Act.[8]

Corporate Social Responsibilty

The Act also sets out details of Corporate Social Responsibility in the minerals sector, namely that:[9]

  • a company holding a mining license must obtain a land lease or other rights to use land for mining
  • mining companies are required to pay compensation on demand to owners or lawful occupiers of land for disturbances of their rights, for damage to crops, trees, buildings and works
  • large-scale license-holders (and selected small-scale operators) are required to enter into Community Development Agreements prior to the start of mine development[10]
  • mineral rights holders pay a minimum of 0.1 percent of annual gross revenue to community initiatives[11]

Critique

In a mid-2013 research paper Fanthorpe and Gabelle call for an urgent update of the Act, so that its provisions are clear, comprehensive and reflect the interests of all stakeholders in the mining sector.[12] The Act also has been criticized for not protecting the rights of affected communities. The Minister of Mines and Mineral Resources has the power to enforce consent by communities to give up land for mining companies if the land has been upheld "unreasonably".[13]

External links

Government of Sierra Leone: The Mines and Minerals Act, 2009

References

  1. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  2. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  3. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  4. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  5. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  6. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  7. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  8. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  9. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  10. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  11. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  12. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  13. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.