Through Law 31/11, of September 21st, 2011, Angola approved a new Mining Code. The aim of the new Mining Code was to provide the Angola mining sector with a modern set of rules regarding the exploration of its vast mining resources whilst simultaneously unifying in a single document a framework that was previously fragmented in numerous cumbersome and outdated statutes.
This modernization, simplification and clarification of the mining framework reflects the increasing international competition among African countries and therefore the need to attract foreign investment in this sector. Conceptually, the Mining Code endeavours to establish a compromise between the acquisition of rights for the exploration of mining resources by both national and foreign investors vis-à-vis the public interest, and the State-domain principle of natural resources.
It is worth pointing out the right that local communities have under the code to be actively engaged in the discussions pertaining to the development of mining activities in their territory. It is mandatory to establish communication/consultancy channels with local communities every time the mining activities have a potential detrimental effect to the communities material, cultural or historical assets. The holders of mining rights have the obligation to resettle local communities in case mining activities cause any habitation damage. In such resettlement cases the communities habits, traditions and other cultural aspects need to be taken into account by the holder of the mining rights.
While performing mining activities, the holder of mining rights shall comply with all general and specific mining -oriented environmental legislation and act with the aim of preserve nature and the environment. In particular, compliance is required in respect of:
State Participation – The State participates in the mining activities by collecting part of the production whether by (i) a direct participation of a State Company in a given concession (with a minimum 10% participating interest) or (ii) by sharing the production of the produced minerals with the entities engaged in such production.
Local Content – The holder of mining rights shall give preference to the hiring of national employees living in the surroundings of the concession areas and secure they get are granted with proper training. Provided that the prices are not 10% higher and that same are provided in a timely manner (up to 8 working days), preference shall be given to the acquisition of goods and services from local suppliers to the extent the quality is compatible with the economics, safety and overall efficiency of the project.
Geological information – This information belongs to the State and any entity hired to collect such information shall not use it from any other ends than those contractually established with the State. Entities carrying out survey operations without holding a mining right are obliged to communicate such activities to the State and hand over all collected information to the later. All geological information collected is to remain strictly confidential.
Property of Mineral Resources – Mineral resources belong to the State. Mineral production belongs to the holders of mining rights.
Mining rights – Mining rights are provided through the issuance of one of the following titles:
Corporate Income Tax – 25%
Royalty on production – 5%
Surface Tax - USD 7,00/km2 on Year 1 up to USD 35,00/km2 on year 5.
Investment Income Tax – 10% on dividends distributed, 15% on interest payments.
Customs duties – Exemption on the definitive or temporary importation of listed equipments for the exclusive use of mining operations.
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