The new Guinean Mining Code was adopted, enacted and promulgated on 9 September 2011, but was only published in the Official Journal in January 2012.
It appears that a number of minor changes were introduced before publication, as the published version is slightly different from the version that was circulated in September 2011. Among notable changes are the following:
- Article 18: in addition to Mining Concessions, the grant of an exploitation permit must now be accompanied by a Mining Convention.
- Article 182: whereas the September version of the Mining Code provided that the stability period could not exceed 10 years, the published version provides that the stability period is fixed at 10 years, and runs from the date of issuance of the exploitation permit or mining concession, or the date of entry into force of the Mining Convention.
Moreover, Article 182, as it appears in the published Mining Code excludes from the scope of stability the “fixed duties, taxes and royalties on surface area”, whereas the version adopted on 9 September 2011 excluded “fixed duties, mining taxes and royalties”. Despite this change, doubt continues to persist as to whether mining taxes are included or excluded from stability.
This publication dispels any rumours that the Mining Code was to be cancelled. It is today in force and fully applicable to all concerned. Nonetheless, various sources have reported that a move is to be made to review the tax provisions of the Mining Code, and until that is done, mining companies must pay their taxes either pursuant to the previous regime or to their conventional regime, if they are party to a Mining Convention. To date, we have not been able to source any law, decree, order or other written confirmation which reflects this apparent suspension of the tax provisions.
Following the adoption of the new Mining Code, the Guinean government had announced its intention to carry out a review of the Mining Conventions currently in force in Guinea.
The Extractive Industries Transparency Initiative has recently published on its website the “Terms of Reference for Guinea Contract Review Process” that aim at creating a clear and transparent process for conducting a review of the agreements in force in the mining sector.
According to the Terms of Reference, the review will focus on:
- the financial model of each Convention, to assess the financial stakes, as well as the financial balance as it currently stands and as it might be desirable based on international norms and principles of equity;
- the discrepancies between the content of each existing Convention and the new Mining Code, especially in the areas of fiscal payments, employment, governance, social and environmental norms, state equity participation, infrastructure, transportation, and commercialization;
- the legal status of each Convention, the legality of the award process, the observance of the contractual provision along with Guinean legislation, and the risks or opportunities associated with potential arbitration;
- the specific challenges associated with the development of each project, notably those related to transportation infrastructure, local development, and the use of Guinean subcontractors, the Government being entitled to review the relevant Convention if it considers that it has been drafted in violation of the law.
Two committees are in charge of the review, the Technical Committee that will be the operational arm of the contract review process, and the Strategic Committee composed of four Ministers of the Government. The two Committees have been established for an initial period of one year, and will report to the Presidency, the Council of Ministers and the National Assembly on a regular basis. No specific timeframe has been provided in relation to the contract review process.