Mining in the Central African Republic (CAR) is limited to artisinal mining of diamonds and gold, mostly in the regions of Berbérati, Upper Kotto, and Sangha. Since 1962, 98% of diamonds and 100% of gold were produced in this fashion. The mining sector in the CAR only contributes 4% to national GDP, although this figure is suspect, due to the amount of smuggling taking place.
About 80 000 autonomous artisinal miners form the base for the mining activity in the country. Mining companies, in order to optimise their investment, often let such miners exploit large pieces of land within their properties. The artisinal miners sell their production to about 160 certified collecting agents who, in turn, sell this production to two purchasing offices located in Bangui.
The CAR’s iron ore potential could soon be realised following announcements by Asquith Resources over the discovery of a potentially massive high grade lumo iron deposit on its Bambari permit. Initial grab samples have yielded iron contents in excess of 66% iron, with low trace elements.
Lack of infrastructure coupled with the fact that the country is landlocked has hindered development in the mineral industry. The CAR has approximately 400 000 km2of highly prospective Precambrian terrane that has not yet been explored properly.
Overview of the Mining Code
The mining sector is under the responsibility of the Ministry of Mines and Energy, after having been attached directly to the Presidency. A General Directorate for Mineral Resources implements the laws and policies regarding permits, and processes requests prior to their submission to the government for approval.
The Mining Code regulates mining activities. After being criticised by many experts in the sector for its inflexibility, unattractive fiscal policy and excessive administration powers, the Mining Code of 1961 is currently under revision, as are the fiscal policies, with the aim of making it simpler and more attractive. This should help deregulate the mining sector and encourage the development of a competitive mining sector. As for Chad and Cameroon, the new Mining Code is meant to attract foreign investors in support of the development of the mining sector.
All mineral resources in the ground or at the surface – including groundwater and geothermal waters – are the property of the State. They are classified into ‘quarry’ (construction minerals including sand, gravel and stone) and ‘mine’ (all other mineral substances). Quarries are not separate from surface property and are subject to property laws. However, the right to exploit a quarry is given to surface property owners only if they have occupied the property for more than 10 years. The opening of a quarry is subjected to a royalty to be paid to the State. Prospecting and exploration for petroleum and natural gas fall under different legislation (Petroleum Code). Also, strategic minerals such as uranium and lithium, although included in the Mining Code, are subject to special conditions.
In the new Mining Code, permits for exploration and mining fall under the following six categories:
|Permit Type||Artisinal Mine||Prospecting||Exploration
(Type A, Type B)
|Surface reconnaissance||(A) precious metal and minerals, at depth
(B) other minerals
|Prospecting, exploration, mining of deposits||Prospecting, exploration, mining of deposits|
|Surface Area||Square 500 m², N-S and E-W||<10.000 km²||(A) < 100 km²
(B) Square 10 x 10 km max., N-S and E-W
|As previous permit||As previous permit, must be N-S and E-W|
|Validity||2 years, renewable with field check||1 year,
|(A) 2 years renewable 1 x 2 yr and 2 x 1 y||4 years renewable four times||20 years, renewable several times for 5 years|
|Delivery by||Ministry||Presidential Decree||(A) Presidential Decree
|Presidential Decree||Presidential Decree|
|Notes||Reserved to CAR citizens in cooperatives or mining associations||Base for
permits at right in this table
|(A&B) Follows Prospecting Permit||Follows Exploration Permit||Follows Exploration or Mining Permit|
All these permits provide for exclusive rights on the defined property. They can be sold or transferred with the authorisation of the Ministry of Mines. When a deposit is discovered, the right to mine is guaranteed to the owner of the exploration permit. A major factor in the mining sector in the Central African Republic is the importance of fraud and of the financial dependence of artisinal miners upon collector agents.
As a result, a clear mining policy is being established, aiming at:
- removing the influence of the State on mining operations,
- creating conditions favourable to investors, by implementing fiscal incentives (e.g. tax exemption on equipment during exploration), and
- Establishing an organisation responsible for geological exploration and mining that will be responsible for the discovery of new deposits and for prospecting campaigns.
Overview of Fiscal regime and commercial legislation
According to the new Mining Code, the State intends to adopt the following measures:
Fees and Royalties
Fees and royalties will be collected under rules yet to be detailed:
- issuance of a prospecting permit,
- issuance, renewal and transfer of an exploration or mining permit,
- investigation and issuance of a mining concession, and its transfer,
- Issuance and renewal of an artisinal mining permit.
For permits other than artisinal mining and prospecting permits, a fee will be collected based on the surface area of the property involved, as well as a value-added tax, when:
- minerals are sold within the country (collected by the Treasury),
- Foreign currency for the export of minerals is repatriated (collected by the BEAC).
Holders of a quarry permit are subjected to regular payments calculated on the volume of materials mined.
During the exploration phase, holders of an exploration permit are exempt from the:
- minimum tax,
- corporate tax,
- social development tax,
- Property tax; however, certain conditions apply for the property tax, not to exceed common tax exemptions.
During the equipment and production phases, the holder of a mining permit benefits for 3 years from the following exemptions:
- minimum tax,
- corporate tax,
- social development tax,
- 50% reduction on the general income tax related to capital assets.
Some of these taxes will then be collected based on a progressive rate schedule, such as: 25% (year 4), 50% (year 5), 75% (year 6), 100% (year 7 on).
These benefits can only be obtained for direct activities related to the various phases.
During the exploration phase and during the equipment and development phase of a mining project, the Customs Act regulates the collection of duties on materials, machinery, equipment, spare parts, primary and consumable materials.
Currency Exchange Rules
Companies established in the Central African Republic can export the extracted or transformed substances to any country other than countries hostile to the Central African Republic or their citizens. The company can use freely the revenue made.
All individuals and companies who have invested in the Central African Republic for activities in exploration, mining, processing or transport of minerals on the Central African Republic territory can transfer to their country of residence the dividends and other results of these transactions.
Independently of all above conditions and terms, any company operating in the Central African Republic must allow participation in its capital, public or private. In any case, such participation will be limited to actual contribution. Repatriation of capital is allowed annually based on depreciation calculations. For the repatriation of loans (taken or given) in foreign currency, the government must be consulted.
Société d’adduction deau et lélectrification rurale, Aurafrique SARL, Central African Mining Company SARL, Diamond Cutting and Evaluation Training School, Diamonds and Gold Small Business Promotion, Mineral Resources Development Bank, Ministere des Ressources Energetique et Minerales, Ministry of Energy, Mines, Geology and Water Resources, United Reef