Global law firm Baker & McKenzie’s newly released Global Mining Guide, which reviews the legal regulations and developments in 28 key mining jurisdictions, explores the mining issues of three African countries – South Africa, Egypt and Morocco.

The most significant insight gained into the African mining jurisdiction is that many countries on the continent are closely monitoring one another’s developments in terms of mining regulation and taxation, while also learning from one another’s experiences and policies, says Baker & McKenzie South Africa mining head Morne van der Merwe.

He points out that this similarity or consistency across the blocks of mining jurisdictions will greatly enhance investor confidence in the continent.

Baker & McKenzie has, for example, seen a more established regime for foreign investment, licensing and environment protection in countries that have a history of oil and gas exploration and development, while countries with immature mining industries are each developing at a different pace.

“Generally, countries will consider their investment policies and mining licensing regime, and review the investment policies again to ensure that government revenues keep up with the risk/reward profile being realised with foreign investors,” notes Van der Merwe.

With respect to foreign investment regimes and the percentage retained by African local governments, many countries, such as the Democratic Republic of Congo, have an established mechanism that enables State-owned entities to maintain a stake in a project, while other countries, such as Zambia and Mozambique, deal with foreign investment on a case by case basis.

Meanwhile, based on the insight gained from work done by Backer & McKenzie in sub-Saharan Africa, many countries in the region, such as Zambia, Kenya and Botswana, are working hard to reduce red tape, but, in practice, administrative blockages still occur.

Another noticeable trend on the African continent that is highlighted in the guide is that most jurisdictions in Africa do not have a public consultation process when considering amendments to the mining regime.

“Announcements concerning new laws and policies can be ad hoc and without warning. For example, in some jurisdictions, connected local lawyers may be involved in an informal consultation process,” says Van der Merwe.

A notable exception is South Africa, where, typically, extensive prior consultation is carried out before a Bill or Amendment Bill is signed into law.

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