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MINISTRY OF WATER & MINERALS
(Decree No.__________) April 2000
THE MINING CODE AND REGULATIONS OF THE REPUBLIC OF SOMALILAND
(All Previous Mining Laws Pertaining to Somali Democratic .... are repealed and replaced wholly by (this) Mining Law No. ______ of 2000)
PART I
Article 1- Summary of the Mining Code and Regulation
Article 2 – Definition
Adit: Means a tunnel of indication of less than Fifteen-(15) degrees in the horizontal which is or might be used for access, travelling, drainage or ventilation in connection with prospecting or mining operations. Agreement: Means a contract between the Government and a person relating to Hydrocarbon or Minerals. Commercial Discovery: Means a discovery of Minerals or Hydrocarbons, which can be produced commercially. Alluvial: Includes all those mineral deposits which occur as detrital grains within the near surface Court: Means a territorially competent court of Somaliland Director: Shall Mean the Director of Geology and Mining To Explore: To carry out surveys, studies and Appraisal of Minerals and Hydrocarbon Government: Means the Government of Republic of Somaliland Holder: Means a person to whom a permit, License or lease has been granted pursuant to this code, and includes his representatives, transferees or assignees. Hydrocarbons: Means all natural organic substances Composed of carbon and hydrogen, including crude oil and natural gas and all other Mineral substance, products and by products and derivatives found in conjunction with the same excluding coal which is considered on Mineral Licence/Lease Area: Means a portion of the geographic Area of the Republic which is subject to a lease/license granted pursuant to this code. Lessee: Means the holder of a lease issued under the provision of this code and includes all persons having a right or interest relevant to the lease Licensed Mineral Dealer: Means a person to whom a mineral Dealer’s license granted under the provision or article 80 of this code. Reef/Lode: Includes all minerals occurring in Solid form Mine/to Mine: Means any place, excavation or Working where any operation in connection with mining is carried on. Minerals: Means any natural occurring substances of economic value that are formed within the earth’s crust and includes slats, water, and geothermal deposits, metals, precious areas & industrial Minerals, excluding Hydrocarbon. Mining Rights: Means the rights to mine as defined in this code and regulations. Minister/Ministry: Means the Minister/Ministry of Mineral & Water resources. Passageway: Means any required facilities for Mining operations Person: Includes a corporation, company, Syndicate or other association or body of persons corporate or unincorporated. Permit Area: Means a portion of the geographic Area of the Republic, which is subject to a permit granted pursuant to this code. Pit/Shaft: Means any vertical or inclined tunnel or excavation other than Adit which is or may be used for access travelling, drainage, or ventilation in connection with prospecting or mining operations. Petroleum: Means all natural hydrocarbons gas, Liquid or solid form produced from the ground. Controller: Means an authorised of by licensed Authority. To Prospect: Means to search for minerals through testing the Mineral bearing qualities of land. Prospecting Rights: Means rights to prospect as defined in this code and the regulations. Regulations: Means the regulations made under this code. Rented Surface Area: Means the area of land within mining Lease area which is occupied by mining work, installation etc., for which a separate rent is prescribed in article 49. Republic: Means the Republic of Somaliland State: Means the Somaliland Government Tailings: Means all stones, gravel, sand, slime or other substance derived from mining operations. Water Course: Means any water channel which confines the flow of water, whether continuously or periodically.
Article 3 Property in and Control of Minerals The entire property in and control of all Minerals in any land/sea territory of the Republic and on or under the sea bed, to a distance of two hundred (200) nautical miles from the low water mark may be determined by agreement or otherwise between the Republic and other states is vested in the state.
Article 4 Delegation of Power The Minister may, by degree, delegate any of his powers conferred by this code or regulation except his powers to grant or revoke a permit license or lease.
Article 5 Powers to close areas to prospecting or mining The Minister may, with the approval of the council of Ministers, by decree, declare any area to be closed to prospecting or mining, for minerals or for environmental reasons for limited time, unless the Minister offers special permit.
Article 6 Land/minerals required for public purpose Whenever any land or mineral being the whole or part of the surfaces of any permit, license or lease area is required for any public purpose. The Minister with the approval of the Council of Ministries, give notice or shall pay reasonable compensation to the holder if agreed, if not agreed between the parties be determined by a court.
Article 7 Revocation of Permits, License or Leases in Cases of fraud and breaches Where any permit, license or lease has been granted in pursuance of this code and found that such grant has been obtained as a result of any false or fraudulent representation or in the case of a breach, the Minister may give notice to the holder later on if the holder fails to comply with the case in specified time the Minister revokes such permit, License or leases with the approval of the Council of the Ministers.
Article 8 Certain persons prohibited from acquiring Rights 1. No member of the Government or civil service, nor any other person associated with the administration of this code or regulations shall directly or indirectly, by himself or by any other person, acquire or hold any right or interest under any prospecting or mining right. Any permit, license, lease, document, or other transaction purporting to confer such right or interest on any such person shall be null and void.
2. No person shall acquire by transfer or through an agent any prospecting or mining right, which he is otherwise barred from obtaining in his own behalf under provisions of this code or regulations.
PART II RIGHTS AND OBLIGATIONS OF HOLDERS OF PROSPECTING AND MINING RIGHTS
Section I – General Rights
Article 9- Rights of Entry, Access, etc. Subject to the provisions of this code and regulations and except as may otherwise be expressly provided in the terms & conditions of any permit, license or lease and subject also to any other law which may prohibit, regulate or restrict the entry into any areas of the Republic, the holder of prospecting or mining rights within the permit, license or lease area may:
a) Enter upon and prospect in any land or under any Water (not excluded from prospecting or mining under Article 6) for such minerals as may be authorised in his permit, license or lease. b) Whilst engaged in bona fide prospecting or mining operations within such area. i) Erect on unoccupied land a temporary camp and such temporary structures & works as may be necessary for his operations, & enter into temporary occupation thereof. ii) Take foreword, other than standing timber, for his domestic use & for his employees, agents or servants. iii) Graze such animals as may be necessary for the carrying out of his operations. c) Dig pits and trenches and bore or drill holes provided that he shall not divert any water from any river stream or water course or abstract water from any lake, pool, or other source of water without the written consent of the competent authority controlling or the owner of such water. d) Employ for such operations any number of people as he may require and such methods of transport as may be necessary.
Article 10 Amalgamations of Permits, etc. 1. The holder of any permits, license or lease, which are contiguous and form a single block, may apply in the prescribed manner to the director to have such permits, licenses or leases amalgamated. Provided that Amalgamation shall not extend to difference classes of permits, licenses or leases or to different holders.
2. The total obligations imposed by this code & regulations in respect of all the permits, licenses or leases thus Amalgamated may then be performed in respect of any one of the holder.
3. Any prescribed returns, reports, & plans may be submitted in respect of the amalgamated block.
Article 11- Holder May Remove Plant, etc., on Termination of Permit, License or Lease 1. Any plant, machinery, engines or tools on the areas of any permit, license or lease which has terminated or which are on any passageways used in connection therewith may, within 90 days from the date of such termination, be removed by the holder or within such further time as the Minister may allow, but he shall not remove any timber from any mine, Adit or shaft except as may be approved by the Director in order to comply with the provisions Item (B) of Article 20.
2. If such plant, engines, engineers or tools aren’t so removed, they may be sold by negotiation or auction by order of the Minister, and the net proceeds of such sale, after deducting the costs thereof and any sum which the holder is required by law to pay to the Government, shall be retained by the Minister, and held until applied for by the holder within a period of twelve months, after which any such sum shall be fortified to the Government:
Provided that where plant, machinery, engines or tools can not be sold negotiation or auction they shall become the property of the state, and may be dealt with in such manner as the Minister may direct.
Article – 12 Right of Passageway 1. If on any permit, license or lease area or on lands outside the boundaries thereof, the holder of the prospecting or mining rights is desirous of obtaining a right of passageway, he/she may apply to the Minister in the prescribed manner for a grant of such right of passage way.
2. If on any application made under the preceding paragraph the Minister is satisfied:
a) That it is necessary for the prospecting or mining operation or for the transportation, treatment, processing or storage of any minerals that the applicant should have the passageway: and b) That it is reasonable for such right to be granted over the particular land, which is the subject of the application, or as may be amended by the Minister with the agreement of the applicant, he may make a grant of right of passageway in the prescribed manner. c)
Article – 13 Duration of Right of Passageway 1. Any passageway acquired under the preceding article shall expire when the permit, license or lease, which it serves, is terminated, and thereupon the holder shall comply with the provisions of articles 11 and 20.
section 2- General Obligations
Article – 14 Surveys 1. Before granting any permit, license or lease or any passageway, and subsequent to such grant should the necessity arise, the Minister may require the area of land to be included or occupied or the boundaries thereof to be surveyed by a Surveyor approved by the Minister; the cost of such Survey shall be borne by the applicant or holder, as the case may be.
2. The Minister may require the boundary of any permit, license or lease or any part thereof to be demarcated in a manner approved by him including the clearing or any vegetation along such boundary, so that it shall be clearly visible, and the holder keep such boundary or part thereof permanently demarcated in such manner.
Article – 15 – Holder to Produce Permit, License, etc. The Holder of any permit license or lease shall produce his permit license or lease whenever demanded by any person having lawful interest in the land on which he is carrying out prospecting or mining operations, or when demanded by a controller Regional Co-ordinators or the Director or any Officer Authorised by him.
Article – 16 – Notice and Security for Compensation Any holder of prospecting or Mining Rights intending to prospect or mine on any land shall, whenever practicable, give notice to the person having lawful interest in such land before commencing operations thereon, and shall, if so require by such person or the Minister, deposit with the Minister such sum, or give security therefore, as the Minister may direct, for the payment of compensation which may be payable under article (17). Such sum or balance thereof (if any) may be refunded or released in accordance with the provision 5 of article 17.
Article –17 - Payment of Compensation 1. The holder of prospecting or mining rights shall, on demand being made by any person having lawful, interest in land where such prospecting or Mining operations are carried on by him, pay such person fair any reasonable compensation for any disturbance of his surface rights, and for any damage done to the surface of the land, or to any livestock, crops, trees, buildings or works, as a result of such operations.
2. The amount of compensation payable under the preceding paragraph shall be determined by agreement between the parties or, if the parties are unable to reach agreement, or if the agreed compensation is not paid, the party having lawful interest in the land may take proceedings before a court.
3. The holder shall pay the sum awarded by such court to the person entitled thereto within fourteen days of the date of communication of the decision.
4. If the sum awarded is not paid within the time specified in the preceding paragraph such sum may, where the party concerned has made a deposit under article 18, on application to the Minister, be paid out of such deposit under the order of the Minister, where no such deposit has been made, the award may be executed pursuant to the law.
5. The Minister, by notice to the holder of prospecting or mining rights who has failed to pay the sum awarded, suspend his mining or prospecting rights, until the sum awarded has been paid, and until the holder has lodged with the Minister such further sum as he may demand as security for any future compensation payable.
6. If such payment or deposit is not made within such time as the Minister may consider reasonable he may revoke the prospecting or mining rights of the holder in default, without prejudice to any further legal proceedings which may be instituted by reason of such default.
Article – 18 – Deposits 1. As a guarantee for the due performance of the obligations imposed by this code or the regulations, any person who has applied for, or is holding prospecting or mining rights, may be required by the Minister to deposit. In addition to any sum lodged under Articles 16 & 17, such sum, or security for like amount in lieu thereof, as may prescribe or the Minister may deny otherwise as .
2. If such person fails to make deposit within the time specified, the Minister may refuse the application, or the prospecting or mining rights revoked.
3. The Minister may, in any case where the depositor has failed, after due notice to meet any obligations imposed upon him by this code or the regulations, take such steps, as may consider necessary to fulfil the obligation, and may expend from any deposit such sum as may consider reasonable to defray any expense incurred by him in so doing.
4. Where any depositor portion thereof is so expended, the Minister may require the deposit or to make good such deposit or portion. Failure to do so may render any prospecting or mining rights, in respect of which the any deposit was made, liable to revocation by the Minister.
5. Where upon the termination of all interest in any prospecting or mining rights, in respect of which a deposit has been made, the permit, license or lease is produced to the Minister and the termination of such interests is duly recorded, then the person by whom such deposit was made may make written application to the Minister for the refund or release of such deposit or balance thereof and, upon production of satisfactory evidence by the applicant, the Minister shall authorise such refund or release to be made:
Provided that such refund or release is made without prejudice to any claim or proceeding existing, or which may arise through the breach by the holder or his agents or servants of any of the provisions of this code or regulations, or existing or arising from any other cause.
6. Subject to the provision of Article 26, where the interest of a depositor in any permit, license or lease is terminated by transfer, no refund or release shall be made until the transferee has made a like deposit of such sum as the Minister may demand.
Article – 19 - Records of Prospecting and Mining Operations 1. The holder of prospecting or mining shall keep on the permit, license, or lease area or such other place in the Republic as the director approve, full and accurate records, plans and maps of his prospecting and mining operations, and shall render to the director such returns, reports and plans as may be prescribed, or as, may be required under the terms or conditions of his permit, license or lease.
2. One half of the cores of any drill-holes shall be preserved by the holder, together with proper geological logs and records, Thereof, during the currency of such permit, license or lease and on the termination thereof such core portions, logs and records shall be made available to the Ministry.
3. If the holder fails to comply with the requirements of this Article, the Minister may, without prejudice to any other penalty for which the holder may be liable, refuse to entertain any application by such holder for any permits, license or lease.
Article – 20 - Obligations on Termination of a Permit, License or Lease The holder, of a permit, license or lease, which has terminated shall, not later than 30 days from the termination date:
a) Submit the permit, license or lease to the Minister for cancellation; b) Fill in and remove all shafts, pits or other excavations and all beacons for marking respectively to the satisfaction of the Director. c) Forward to the Director all plans both of surface and underground working, topographical, geological or assay plans, borehole core logs and other records of the area over which rights are terminated. d) Restore all disturbed to original landscape
Article – 21 – Liability Incurred Before Termination of Permits, etc. Termination of any permit, license or lease for whatsoever reason, including transfer and surrender shall not affect in any way any liability incurred by the holder before such termination takes effects.
Article – 22 – Appointment of Agents 1. When the holder is not personally residing on or sufficiently near his permit, license or lease area so as to maintain continuous supervision of any prospecting or mining operations in progress, he shall appoint an agent, who shall be approved/rejected by the Director on the basis of conditions pursuant to the code and regulations.
2. Any change in the appointment of an agent shall be notified to the Director forthwith.
3. Such appointment and approval shall in no way absolve the holder from any of his obligations and responsibilities under the provisions of this code or the regulations.
4. Every holder of an exclusive prospecting license, mining permit or lease, and every holder, of an oil, exploration, prospecting permit or mining lease when not resident in the Republic, or when such holder is a syndicate or company with it’s head office elsewhere than in the Republic, shall appoint an agent resident in the Republic at all times to represent the holder in all matters relating to any prospecting and mining operations, including the obligations imposed by this code or regulations, and the terms and conditions of such permit, license or lease.
5. A copy of the power of attorney duly signed by the agent in acceptance of his appointment shall be sent immediately to the Minister for record, and any subsequent documents by which such power of attorney is altered shall similarly be signed and submitted to the Minister.
PART III PROSPECTING AND MINING FOR MINERALS OTHER THAN HYDROCARBON
Section 1 – Prospecting Permit
Article 23 No Prospecting Without Permit No person shall prospect for minerals other than Hydrocarbon without a prospecting permit issue under the provisions of this part.
Article 24 “Grant of Prospecting Permit” 1. The Minister may on application in the prescribed manner grant a prospecting permit in the prescribed form to any individual who:
a) Has attained the age of 21 years; b) Is able to prove to the satisfaction of the Minister, or other Authorised Officer, that he can understand the provisions of this code and regulations to such an extent as to unable him to carry out the obligation imposed by them
2. The Minister may issue a prospecting permit for all minerals, which are open to prospecting or for such minerals or class of Minerals, as he deems fit. He may restrict the rights under any prospecting permit by endorsement thereon, either in respect of certain minerals, or, class of minerals, or in respect of any specified area or areas in the Republic.
3. When prospecting is to be carried out by corporation company syndicate, partnership, society, or other body, such body shall employ an individual or individuals, as its prospecting agent. The prospecting permit shall be in the name of such individual as agent for such body.
4. When application is made for prospecting permit to be issued to an individual to act as an agent for another person:
a) Such person shall complete and undertaking in the prescribed form to be responsible for the acts and omissions of the individual who shall also be responsible for his own acts and omissions: b) The individual shall surrender for cancellation any valid prospecting permit he may hold in his own behalf.
5. The Minister may refuse to issue a prospecting permit to an individual who, or whose employer has previously:
a) Held any prospecting or mining right, which has been revoked. b) Being convicted of an offence against this code or regulations or of an offence against laws relating to the employment of labour.
Article 25 “Duration and Renewal” A prospecting permit shall remain enforce for one year from the date of issuing, and may be renewed on application in the prescribed manner for further periods of one year each.
Article 26 “Prospecting Permit Not Transferable” A prospecting permit shall not be transferable.
Article 27 “Rights and Obligations under a Prospecting Permit” 1. Subject to the provision of this code and regulations and to any conditions on his prospecting permit, the holder of the prospecting permit may prospect on any land, not otherwise closed to prospecting, for such minerals as are endorsed on his permit.
2. The holder shall be present at site of any prospecting or other operations being carried out under the authority of this prospecting permit, but may employ at such site such persons working under his direct supervision as may be necessary for such operations, such persons shall not require prospecting permits.
3. The holder may, in the prescribed manner demarcate and apply for an exclusive prospecting license, mining permit or mining lease.
Section 2 “grant of an exclusive prospecting license exclusive”
Article 28 “Grant of an Exclusive Prospecting License” 1.The Minister may, on application in the prescribed manner by the holder of the prospecting permit, and on being satisfied that applicant has sufficient capital to ensure proper prospecting of the area applied for, grant an exclusive prospecting license in the prescribed form.
2.The Minister may, after approving the grant of the license, authorise where to begin on the license area, bending the issue of the license.
Article 29 “License Area, Duration and Renewal” The area of an exclusive prospecting license shall not exceed eight square miles which will be valid for one year, and may, on application prescribed manner renewed by the Minister at his discretion, by endorsement thereon, for further terms of one year each up to a maximum of five years duration.
Article 30 “Rights on obligations under an exclusive prospecting license” 1. Subject to the provisions of this code and regulations and to the terms and conditions contained in the exclusive prospecting license, the holder shall have the sole right of prospecting within a license area for such minerals as may be authorised in the license.
Provided that such right shall not extend to the area of any other license, permit or lease lying within the boundaries of the license during the currency of such other license, permit or lease.
2. The holder may apply in the prescribed manner for the grant of a mining permit or mining lease within the license area.
3. Throughout the currency of the license the holder shall continuously carryout prospecting operations within the license area to the satisfaction of the director, unless suspension of such operations has been authorised by the Minister in the prescribed manner.
Article 31 “Transfer of license” The holder of an exclusive prospecting license or any interested therein shall not transfer his license or any such interest without the prior written approval of the Minister
Article 32 “Surrender of license”
An exclusive prospecting license may be surrendering in the prescribed manner at any time on giving thirty (30) days notice to the Minister:
Provided that where the holder desires to surrender a part of the license area, he shall apply in the prescribed manner for approval of the Minister.
Section 3 – Mining Permit
Article 33 “No Mining without Mining Permit or Lease” Same as provided by Article 8, no person shall mine minerals other than hydrocarbons without the Ministry Permit or Mining Lease issued under the provision of this part.
Article 34 “Grant of Mining Permit” 1. The holder of a valid prospecting permit or exclusive prospecting license may apply to the Minister on the prescribed manner for a grant of mining permit: if the Minister is satisfied that application is prima facie in order, he shall grant the mining permit in the prescribed form to the applicant as authorised in the prospecting permit or exclusive prospecting license.
Article 35 “Duration and Renewal”
A mining permit shall be valid for one year from the date of the demarcation, and may be renewed in the prescribed manner for further periods of one year each, subject to the Minister being satisfied the other requirements of this code and regulations have being met, and that mining operations are being carried on in a safe and satisfactory manner.
Article 36 “Conversion to Lease” Where, in the opinion of the Minister, the scale of the operations on a mining permit or permits is of such a scale to warrant the grant of a mining lease, he may require the holder to apply for a lease, and such lease shall be granted, but subject to such terms and conditions that the Minister may think fit.
Article 37 “Rights and Obligations of the Holder of Mining Permit” 1. Subject to the provisions of Articles 16 and 19, the holder of a mining permit, shall, within the permit area, have the right;
a) To prospect for and to mine such minerals as may be specified in the permit b) Subject to the provisions of part five (part V), to dispose of such minerals. c) To make all necessary excavations.
d) To stack and subject to the provisions of Article 96 to dump any of the product of mining. e) To erect permanent houses, buildings, engines, machinery, and other works and to make such passageways as may be necessary for the mining operations.
2. The holder shall throughout the currency of the permit carry on mining operations continuously within the permit area to the satisfaction of the Minister:
Provided that the Minister may, on application in the prescribed manner authorise the holder to suspend work within the permit area for periods not exceeding ninety days (90) where he is satisfied that circumstance make it desirable to do so.
Article 38 “Transfer of Permit or Shares” 1. Subject to the approval of the Minister, which shall not be unreasonably with held, and to the provisions of Article 11, the holder may transfer his mining permit or permits in the prescribed manner. 2. Subject to the approval of the Minister which shall not be unreasonably with held, the holder may by instrument in writing divide his interest in any mining permit into such shares as he shall think proper, but not exceeding 12 in number, and may transfer such shares, and the rights and interests in the permit in the prescribing manner.
3. When the transfer of shares in a permit is effected, all or any of the shareholders may be held responsible for the obligations imposed by this code or regulations, unless otherwise provided in the instrument creating the shares.
Article 39 “Surrender of Permit” A mining permit may be surrendered at any time by notice to the Minister and submission of the permit for cancellation, together with the confirmation required by Article 20.
Article 40 “Revocation of Permit” Without prejudice to the generality of Articles 6 and 7, a mining permit shall be liable to revocation:
a) If subsequent to its grant it’s found that the area was not properly demarcated prior to application. b) If the holder ceases work for a period exceeding (14) days in any month without the authority of the Minister, or if failure to submit of any prescribed return or report. c) If after due warning in writing the holder fails to maintain the beacons demarcating the area; d) If the holder fails to keep proper records and accounts of his operations as required by Articles 19 and 71.
Section 4 - Mining Lease
Article 41 “Grant of Mining Lease” 1. Where the holder of a prospecting permit, exclusive prospecting license or mining permit in the course of his exploration and operations discoveries deposits of minerals of sufficient size and has carried out development work or preparations for mining, or such other prospecting work as in his opinion indicates a reasonable probability of steady and continuous production for a period of at least five years, such holder may, in the prescribed manner, apply for the grant of a mining lease.
2. If the Minister is satisfied with the evidence submitted and is further satisfied:
a) That the applicant has or can command sufficient capital for the proper development of a mine; b) That a market exists or can be found for the products, the Minister may, with the approval of the Council of the Ministers, grant a mining lease in the prescribed manner, subject to such conditions as he may think fit.
Article 42 “Duration and Renewal” 1. The initial term for mining lease shall not be less than (5) years and not more than (21) years.
2. Not less than (6) months before the end of the term granted the lessee may apply in the prescribed maner for the renewal of the lease for further terms, and if the Minister satisfied that the lessee is carrying out work in a normal and businesslike manner, and that, the lease is not otherwise liable to revocation under the provisions of this code or regulations, the Minister shall renew the lease by endorsement thereon for a further term, not exceeding (21) years, as may seen to him reasonable, if in view of probable life of the operations.
3. Each such renewal shall be subject to such conditions as may apply to the grant of new leases.
Article 43 “Rented Surface Area” The lessee shall define within the lease area the rented surface area or areas which he requires to occupy with surface installations, dumps, excavations, etc, but not passageways, and shall pay a special rents herein after called the surface rent, in respect of such rented surface area at the prescribed rate. Such surface rent may be revised at intervals of (7) years, and the rented surface area occupied may be varied by the lessee, upon giving notice in the prescribed manner, as required by the progress of his mining operations.
Article 44 “Rights of Lessee” 1. Subject to the provision of Article 16 & 17 lessee shall, within the lease area have the right;
a) To prospect & mine for such minerals as may be specified in the lessee. b) Subject to the provisions of part V, to process for sale, transports & disposes of such minerals or mineral products. c) To stack and, subject to the provision of Art 91, to dump any of the products of mining. d) To make all necessary excavations e) To erect permanent houses, buildings, engines machinery, plant & other works, and to make such passageways as may be necessary for the mining operating.
2. Pending issue of a mining lease the grant of which has being approved, the applicant may apply to the Minister for permission to begin mining within lease area or parts thereof. The Minister may grant permission subject to such conditions or restriction, as he may think fit. Such permission may be withdrawn at any time by the Minister.
Article 45 Working Obligations on a Lease The lease shall throughout the currency of the lease carry out continuously bonafide mining operations within the lease area to the satisfaction of the Minister:
Provided that the Minister may on application in the prescribed manner authorise the lease to suspend work within the lease area for such period not exceeding six months as he may think fit.
Article 46 “Transfer of a lease or interest therein” The lease shall not transfer his lease or credit or transfer any right or interest therein, except as may be specifically authorised in the terms and conditions of the lease, until such transfer or interest has being approved by the Minister
Article 47 “Surrender of Lease” A mining lease may surrender either in whole or in part in the prescribed manner, after given six months notice to the Minister.
Part 1 – IV - “HYDROCARBONS”
Section 1 – General Provisions
Article 48 Scope of this Part The provisions of this part relating to exploration, prospecting and mining apply only to hydrocarbons.
Article 49 No Prospecting or Mining without permit or lease No person shall explore, prospect or mine any hydrocarbons except in accordance with a permit or lease granted under the provision of this part
Article 50 Grant of Permits, etc. 1. Subject to the provisions of this code & regulations the Minister, may, with the approval of the Council of Ministers, in the prescribed manner grant:
a) An oil exploration permit to explore for hydrocarbons in any land and under any water in or adjacent to the Republic as may be specified in the permit. b) An oil prospecting permit to prospect for drill for, extract, and remove for purpose of test and research, hydrocarbons from any lands and water is in or adjacent to the Republic as may be specified in the Permit. c) An oil mining lease to explore & prospect for, mine, remove, process for sale and dispose of hydrocarbons from any lands or water in or adjacent to the republic as may be specified in the lease,
2. Such a grant may be subject to such terms and conditions as the Minister may, with the approval of the Council of the Ministers determine
Provided that such terms and conditions shall not be contrary to or inconsistent with the provision of this code or regulations.
Section 2 – Oil Exploration Permit
Article 51 Duration and Renewal 1. The initial term for an oil exploration permit shall be two years.
2. Not later than three months before the expiry of the term the holder may apply in the prescribed manner to the Minister for a renewal of the permit. The minister may, with the approval of the Council of Ministers, renew the permit for not more than three further terms of one year each, either in respect of the whole permit area, or part thereof.
Article 52 Size of Permit Area An oil prospecting permit shall not be granted over an area or areas exceeding 500 square miles in extent.
Article 53 “Working Obligations in Permit Area” 1. Subject to any conditions of the permit the holder of an oil exploration permit shall, with all reasonable despatch, and in any case not later than four months from the grant of the permit, commence to explore by geological and/or geophysical methods the permit area, and shall, during the currency of the permit, continue with due diligence to carry out such work as may be necessary to determine the geological structure of the area.
2. In the event that a formation is identified and is shown to be potentially productive of Hydrocarbons, the holder shall carry out an adequate program of appraisal drilling and such other activities that may be necessary to determine whether the deposit of Hydrocarbons so identified is a commercial discovery
Section 3 – Oil Prospecting Permit
Article 54 “Grant of Permit” An oil-prospecting permit shall only be granted:
a) To the holder of an oil exploration permit within such permit area; or b) To the holder of an oil prospecting permit, adjacent to such permit area.
Article 55 “Size of Permit Area”
An oil-prospecting permit shall not be granted over an area or areas exceeding 500 square miles in extent.
Article 56 “Duration and Renewal” 1. The initial term of an oil-prospecting permit shall be two years.
2. Not later than three months before the expire of the term the holder may apply in the prescribed manner to the Minister for a renewal of the permit
3. The Minister may, with the approval of the council of the Ministries renew the permit for not more than three further terms of one year each, either in respect of the hold permit area, or part thereof.
Article 57 “Working Obligations in Permit Area”
1. Subject to any conditions of the permit, the holder of an oil prospecting permit shall, in addition to geological and geophysical work as may be necessary, carry out a program of test drilling determining whether a deposit of mineral oil exists within the permit area.
2. The scheme of operations shall be conducted in accordance with a program submitted to and approved by the Minister, where more than one oil-prospecting permit is granted to one holder, the program of drilling on the various permits shall be agreed between the holder and the Minister.
Section 4 – Oil Mining Lease
Article 58 “Grant of Lease” An oil-mining lease shall only be granted to:
a) The holder of an oil prospecting permit within such permit area; or b) The holder of another oil mining leases adjacent to such leases area.
Article 59 “Comprehensive Oil Mining Lease”
The Minister may with the approval of the Council of Ministers, grant a comprehensive oil-mining lease covering two or more areas, provided the areas are on the same geological structure, or cover of a group of similar or related structures.
Article 60 “Size of Lease Area” The size of oil mining lease and the sum of the areas of a comprehensive oil mining lease shall not exceed 160 square miles;
Provided that where the Minister is satisfied that there is a reasonable prospect of commercial production over a greater area, he may, with the approval of the Council of Ministries, grant an oil mining lease over a large area, but not exceeding 500 square miles.
Article 61 “Duration and Renewal” 1. The initial term of an oil mining lease shall not exceed twenty-five years but renewal shall be granted at the end of such term for such further period or periods as, in the opinion of the Minister, represents the remaining productive live of the deposit, not to exceed in any case a total fifteen (15) years for any lease.
2. Every renewal of an oil-mining lease shall be subject to a review of the conditions of such lease in the light of prevailing conditions at the time of such renewal.
Article 62 “Working Obligation on a lease” Subject to the general provisions for this code and regulations and to any conditions of the lease, the leasee shall at all times develop and exploit every discovery of mineral oil at the maximum rate which is deemed economically suitable and possible according to good technological practice.
Article 63 “Rights of Leasee” 1. Subject to the provisions of this code and regulations and to any conditions of the lease, the leasee shall have the right:
a) To prospect and mine for mineral oil within the lands and under the waters subject lease area. b) Subject to the provisions of part V; to process for sale, transport, and dispose of all solid, liquid & gaseous products of mineral oil, and subject to the provisions of Article 92, to dispose of any waste products of the mining or treatment process. c) Within the lease area to erect permanent houses, buildings, engines, machinery, plant and other works, and to make such passageway as may be necessary for the proper execution of operations under the lease; d) Subject to the requirements of any land legislation in force to operate and maintain at any place in the Republic approved by the Minister, such facilities and works as may be necessary for carrying out in developing the mineral oil industry.
Sections 5 – Miscellaneous Provision
Article 64 “Transfer of Permit and Lease” 1. An oil exploration permit, oil-prospecting permit, and oil-mining lease shall not be transferred without the prior written approval of the Minister.
2. Such approval may be granted subject to any conditions as the Minister may think fit, and he may require as a condition to such approval that the transferee at his own expense execute a bond to perform the obligations imposed under the permit or lease.
Article 65 “Surrender of Permit or Lease”
An oil exploration permit, oil-prospecting permit or oil-mining lease may be surrendered either as a whole or in part, in the prescribed manner, after giving six months notices to the Minister.
Article 66 “Rights of Entry into Areas Excluded from Prospecting” Notwithstanding the provisions of Article 6, the holder of a permit or lease issued under the provisions of this part may, upon giving notice of at lease two weeks to the Minister, and subject to any conditions of his permit or lease, enter such areas as are described in items (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), and (n), of Article 6 for the purpose of making geological, geophysical, topographical or hydrological examination thereof:
a) Not excavate or otherwise disturb the surface of such areas; b) Not engage in any form drilling activities. c) So conduct his operations as to cause as little damage in such areas as possible; and d) On completion of such examination, forthwith make good any damage caused in such areas.
PART V – ROYALTY ON, EXPORT AND LOCAL SALE OF MINERAL
Article 67 “Liability to Royalty” 1. All Minerals obtained in the course of prospecting or mining operations and any substance or matter extracted there from shall be liable to such royalty as may be prescribed by regulations.
2. Notwithstanding any other provisions of this code or regulations, liability for the payment of royalty shall be deemed to have arisen immediately the minerals that have been extracted.
3. Where it is not possible to calculate the exact amount of royalty payable before export or local sale, provisional royalty shall be payable to the Minister in such sum as he may assess. Thereafter, a final assessment shall be made after receipt of account sales, assays, valuations or other documents as may be necessary to establish the proper amount of royalty due.
4. The secretary may exempt from the payment of royalty such quantities of Minerals as he may deem to be necessary for the purposes of experiment or assay, or for commercial or scientific specimens, such exemption shall be endorsed on the export permit.
Article 68 “Minerals Obtained In Prospecting” 1. Save as may be provided in the terms of any permit or license to prospect, minerals obtained in the course of prospecting shall be property of the state, and shall not be removed from the permit or license area or disposed of by the holder or by any other person except with the prior written approval of the Minister who may authorise their removal for safe custody, or for any other reason which he may deem fit and subject to such conditions as he may impose.
2. If the Minister is satisfied that the applicant has been conducting only such work as is reasonably necessary to enable him to test the Mineral bearing quality of the permit or license area, he may authorise the applicant to retain or dispose of the minerals on payment of the prescribed royalty.
Article 69 “Export and Local Sale of Minerals” 1. No person shall export any mineral or any product or substance refined or derived from any mineral unless he is in possession of a permit to export issued under the provisions of this code or regulations, which shall contain a certificate to effect that royalty has been paid or secured to the satisfaction of the Minister.
2. The director or any authorised Officer may inspect any consignment of Mineral before export and may take free of cost samples there from, for the purpose of ascertaining the mineral content and its worth
Provided that any sample materials remaining after examination shall be returned to the exporter if requested at the time of sampling.
3. When minerals or mineral products or substances are sold to persons within the Republic for any purpose whatsoever, the holder of the prospecting or mining rights shall be liable to pay such royalty as may be prescribed for such minerals or minerals products within one month of such sale unless such royalty is otherwise secured to the satisfaction of the Minister.
Article 70 “Records of Buying and Selling” The holder of a mining permit, mining lease, or oil mining and any other persons buying or selling minerals or mineral products, shall keep adequate records to the satisfaction of the Minister, to show the quantity of mineral or mineral products produced, bought or sold, and accounts of such purchases, sales or exports, such records may be inspected by the Director or other authorised Officer at any reasonable.
Article 71 “Permit for Small Quantity of Mineral” The Minister may grant to any person a permit to possess or by small quantities of minerals subject to such conditions as may be specified in the permit.
PART VI – RESTRICTED MINERALS
Article 72 “Possession of Restricted Minerals” 1. Under the provisions of this part the Minister may, with the approval of the Council or Ministries, by decree published in the official bulletin, restrict the possession of dealing in any minerals. Such decree may specify the state of processing at which such restriction shall apply or cease to apply.
2. No person shall possess any such restricted minerals unless;
a) He is a mineral dealer licensed under the provisions of this part b) He is the holder of prospecting or mining rights which specifically authorise the prospecting or mining of such minerals; c) He is a person to whom a permit to possess small quantities of such minerals has been granted by the Minister under Article 75, and such possession is in accordance with the conditions of the permit; or d) He is the duly authorised employee of any person specified in sub paragraphs (a) to (c) of this paragraph, and his official employment necessitates possession of such minerals.
Article 73 “Sale and Purchase of Restricted Minerals”
1. No person shall sell restricted minerals to or buy restricted minerals from any person in the Republic, other than a licensed mineral dealer, or a person to whom a permit has been granted under the provision of Article 75.
2. In this article “Buy” and “sell” includes barter, exchange, give or receive as a gift or pledge, and all other forms of acquisition or disposal.
Article 74 “Mineral Dealer’s License” The Minister may grant a mineral dealer’s license in the prescribed manner subject to such conditions as he may think fit. This license shall be in addition to any other authorisation prescribed by any other law.
Article 75 “Obligations of Licensed Mineral Dealer” 1. Every licensed mineral dealer shall pay to the state royalties due on any restricted minerals bought or received by him under the provisions of this part and, if so required by the Minister, shall give security for such payments.
2. Every licensed mineral dealer shall:
a) Keep a register showing: i) All purchases and sales of minerals made by him; ii) The nature and weight of such minerals; iii) The date of each transaction; iv) The name and address of the vendor and his title to such minerals; v) The name and address of the purchaser or consignee to whom such minerals are sold or consigned. b) Cause every transaction to be entered in such register within twenty four hours of being made; c) Produce such register to the Minister, to any officer authorised in writing by him or to any police officer whenever so required; and d) Render to the Director such returns as he may require.
PART VII – SAFETY, INSPECTION AND ACCIDENTS
Article 76 “General Safety” 1. The holder of any permit, license or lease shall take all due and proper precautions for the safety of all persons employed by him in any prospecting or mining operations, to the satisfaction of the directors.
2. The holder shall, during the currency of any permit, license or lease keep all edits, shafts, pits and other excavations, whether made prior to the grant of such permit, license or lease or during its currency, secured to the satisfaction of the director in such a manner as to prevent inadvertent entry of persons or livestock.
3. The holder shall also take proper precautions to prevent any persons being injured by any blasting operations or the operations of any plant, machinery, conveyors, moving belts, camel ways, train way, electricity supply or other works or apparatus, and shall provide suitable fencing, guards and warning notices where such dangerous exists or is likely to arise.
4. In any quarry, gravel or sand pit, or other open cast working or open excavation the holder shall ensure that working faces of such excavation are stepped or sloped, and restricted in height so as to avoid collapse, and shall take proper precaution when men are working near faces to prevent injure due to fallen materials.
Article 77 “Power to Remedy Dangerous Practice, etc” 1. If the director or the medical officer finds anything conducted with prospecting or mining operations or any passageway to be dangerous or effective so as to be detrimental to welfare or health of any person, or livestock, he shall give notice in writing thereof to the holder of the prospecting or mining right or right of passageway, or his agent in charge of the operations or mine.
2. Such notice shall contain such particularises of the matter considered to be dangerous or defective, which shall be remedy either forthwith or within such time as may be specified.
3. The Director or the Medical Officer may order work to be suspended until the danger is removed to his satisfaction.
4. On receipt of such notice the holder of the prospecting or mining right or right of passageway, or his agent, shall comply reweigh, or, if he objects thereto, he shall immediately state his objection in writing to the Minister who shall make a decision on the objection.
5. Where the holder of the prospecting or mining right or right of passageway, or his agent states his objections to the Minister under the proceeding paragraphs he shall cease to use the mine, or part thereof, machine, plant, matter or practice as to which such notice has been given, and shall withdraw all men from the danger indicated by such officer until such time as the matter is desired by the Minister.
Provided that if, in the opinion of the officer giving such notice, there is no immediate danger, such officer may allow work to proceed during the time the matter is being determined, under such restriction and upon such conditions to issue safety as he may consider necessary and may specify in writing.
Article 78 “Proceedings in Case of Accident” 1. Whenever an accident occurs in connection with prospecting and or mining operations causing or resulting in loss of live or serious injury to any person, the person in-charge of the operations shall, as soon as possible, report in writing the facts of the matter so far as they are known to him, to the Director who shall hold and enquire in the cause there of and record a finding.
2. As copy of the report and finding shall be submitted to the competent labour authority.
3. The Director shall, for the purpose of an inquiry under this Article have the powers of a court to summon witnesses, to call for the production of books and documents and to exam witnesses and parties concerned on oath.
4. Any witness required to attend by the Director for an inquiry may be paid reasonable expenses as are applicable to court witnesses.
5. The work “Director” in this article includes an Officer appointed by him for the purpose for of this Article.
PART VIII- REGISTRATION
Article 79 “Prospecting and Mining Rights shall be registered” All permits, license or leases and rights of passageway shall be registered in the office of the Director in the prescribed manner.
Article 80 “Transfers of Interests to be registered” 1. When any permit, license, or lease or right of passageway is transferred to, vests in or devolves upon any person; such person shall within 30 days thereafter, or of the date of approval where approval is required apply in the prescribed manner to the director to register such transfer, vesting or devolution.
2. Where any interest in any permit and license, lease or right of passageway has been created, renewed or terminated, the person concerned shall apply in the prescribed manner to the Director to register the instrument creating, renewing or terminating such interest within 30 days of the date of the execution thereof.
Provided that the director may, for good cause showed, extend the period for the making of such application.
Article 81“Registration Not to Cure Defect” Registration shall not cure any defect in any document registered or confer upon it any effect or any validity which it wouldn’t otherwise have had.
Article 82 “Inspection of Register” The Director shall on application, and on payment of the prescribed fee:
a) Allow inspection of the register at all reasonable times; and b) Give copies of copies of or extracts from any entry in the register.
Article 83 “Copies of Prospecting or Mining Right, etc to District Commissioner” The Director shall forward a copy of every permit, license or lease (other than a prospecting permit issued under part III) and every right of passageway, and of any instrument transferring, renewing, creating or terminating any of these or any interest therein, which is registered in his office to the district commissioner of the district or districts in which the area in question is situated.
PART IX – DISPUTES
Article – 84 “Application to Investigate Dispute” Where any matter respecting the provisions of this code or regulations, or the terms or conditions of any permit, license or lease, or arising out of any prospecting or mining operations is in dispute between two or more holders of prospecting or mining rights, the parties may jointly apply to the Director to investigate such dispute.
Article 85 “Memoranda, Statements, etc”
1. The parties to the dispute shall submit to the Director written memoranda covering the matter in dispute.
2. The Director, or other officer dully authorised by him, may investigate such dispute, and for such purpose shall have the same powers of inspection and inquiry as are provided in Article 83 of this code.
Article 86 “Adjustment of Disputed Boundaries”
1. Where such dispute is in any respect of any area, boundary or beacon, the Director or other authorised officer shall make a survey of the disputed area, boundary or beacon, and shall have power to amend such area, boundary or beacon in whatever manner seems to him best in the circumstances.
2. Such amendment shall be binding upon all the parties to the dispute.
Article 87 “Director to Submit Report” At the conclusion of every investigation, the Director or other Authorised Officer shall make a report to the secretary, together with his recommendations, and a plan showing any amendments made under the provisions of the proceeding Article.
PART X – MISCELLANEOUS, PENAL AND FINAL PROVISIONS
Section 1 – Miscellaneous
Article 88 “Discovery of Minerals” 1. When the holder of prospecting or mining rights discovers minerals which he believes may be of economic value or capable of development, and which have not been reported in the locality previously, he shall notify the secretary, giving details of such discovery, and shall supply a sample of the minerals.
2. In the event of any government officer discovering minerals which he believes may be of economic value or capable of development, he may demarcate an area not exceeding one square mile, or several, or several such areas, and shall report such demarcation with a plan thereof to the Minister, and shall supply a sample of the minerals Demarcation shall be by the same method as prescribed for a mining permit. Such shall be designated a “Government Mineral Area”.
Article 89 “Pollution of Water” No person shall in the course of prospecting or mining operations permit any anxious or poisonous matter to pollute water in use by the public, nor shall he discharge sand, slime or other tailings in a manner as to interfere with any such use
Article 90 “Priority of Applications” If applications for a permit, license or lease are received for the same area or for overlapping areas from two or more persons that application which is first received by the Minister shall have the priority.
Provided that application has been made in the prescribed manner, and that the area applied for shall have been properly demarcated, as may be required by this code or regulations.
Article 91 “Lateral Limits” 1. The lateral limits of any permit, license or lease shall be Vertical planes passing through the sides by which such permit; license or lease area is bounded.
2.This lateral limits of the occupied or rented surface area required for prospecting or mining operations on the surface may be less than permit, license or lease area, and may vary from time to time depending upon the requirements of the operations.
Article 92 “Use of Mining Road, etc” 1. On any permit, license or lease area, or on any passageway the holder who has constructed any road shall permitstructed, and any officer of the Government duly authorised by the Minister to have access to and the use of such road:
Provided that:
a) Where any such person uses such road in a manner as, in the opinion of the holder, to do appreciable damage thereto, or to enhance substantially the cost of upkeep thereof, the holder shall be entitled to call upon such user to contribute to the cost of upkeep; b) Where any such person uses such road in a manner to interfere materially with the free use and enjoyment of such road by the holder, the holder may give notice to the user to limit his use of the road so as to limit such interference.
2. Except as provided in the preceding paragraph a road constructed by the holder of any permit, license, lease or passageway shall be considered to be a private road, and members of the public may not use such road without the consent of the holder under such conditions as he may require.
3. Any landing ground for aircraft constructed by the holder of prospecting or mining rights shall be treated as a private landing ground and may not be used, but for emergency, by other aircraft without consent of the holder, and subject to the laws for the time being in force for the regulation of private landing grounds, and flying generally in the Republic.
Article 93 “State of War”
In the event of a state of war dully declared, the Minister shall have the right of pre-emption of all minerals mined under any permit, license or lease, and all products thereof, and shall have the right to take control of the mining operations from the holder for such time as the state of war exists.
Article 94 “Interference with Prospecting or Mining Rights, Passageway, Beacon, Mine timbers etc”” No person shall at any time:
a) Interfere with or obstruct any prospecting or mining operations authorised under this code or regulation; b) Interfere with any passageway; c) Interfere with any machinery, plant, works or property on any area the subject of any permit, license, lease or passageway; d) Without lawful authority wilfully break, deface or remove any boundary mark, beacon, pillar, post or notice erected for the purposes of this code or regulations. e) Without lawful authority interfere with any timber, support, door or barrier in any mine, shaft or adit; f) Without the consent of the lawful owner remove or otherwise interfere with tailings. g) Obstruct any person in the exercise of his rights conferred by the code or regulations
Section 2 – Penalties
Article 95 “ Illegal Prospecting or Mining” Any person who prospects or mines on any are referred to in Article 2 otherwise than in accordance with provisions of this code and regulations shall be guilty of an offence, and shall be liable on conviction to a fine not exceeding us $ 5000 – or to imprisonment for a term not exceeding twelve months, or to both such fine and imprisonment.
Article 96 “ Failure to Comply with Notice” 1. If the holder of any prospecting or mining rights or right of passageway or his agent, fails to comply with the requirements of any safety notice given under Article 82 or with any decision of the Minister when an objection has been determined, he shall be guilty of an offence and liable on conviction to a fine not exceeding us $ 3000 or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.
2. Any person failing to comply with the requirement of any other notice lawfully given under the provisions of this code or regulations shall be guilty of an offence and liable on conviction to a fine not exceeding us $ 1,000 – or to imprisonment for a term not exceeding three months, or to both such fine and imprisonment.
Article 97 “Failure to Attend Inquiry, etc” Any person summoned to attend or produce books or documents at any inquiry held under the provisions of Article 7 and refusing or neglecting to do so, or refusing to answer any question put to him by or with the concurrence of the Director, or other authorised officer holding such inquiry shall be guilty of an offence and liable on conviction to a fine not exceeding us $ 1000.
Article 98 “ General Penalty” Any person who violates any of provisions of this code or regulations for which no penalty is expressly provided shall be liable on conviction to a fine not exceeding us $5,000 or to a term of imprisonment not exceeding six months, or to both such fine and imprisonment.
Article 99 “ Forfeiture of Mineral etc, by Court” 1. In addition to any other penalty, the court shall order the forfeiture of all minerals obtained in the course of illegal prospecting or mining, or obtained as the result of any violation of this code or regulations, or in default of such minerals, such a sum as the court may assess as the value of such minerals.
2. The court may further order to forfeiture of any implements or machinery used for any illegal prospecting or mining.
Section 3 – Final Provisions
Article 100 “ Repeal and Saving” 1. Any other law or provision relating to prospecting or mining contrary to or inconsistent with the provision of this code is also repealed.
The Regulations and their Schedules/Forms
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