November 2024– Senegal has adopted strict regulations for the mining sector to ensure the sustainable exploitation of its natural resources while promoting economic development. Since the adoption of the Mining Code in 2016 and the Environmental Code in 2023, mining activities have been regulated by laws, decrees, and mining agreements. These regulations aim to balance the interests of the state, companies, and local communities, ensuring transparency, social and environmental responsibility, and sustainability.
A Solid Regulatory Framework for the Mining Sector
As a country rich in mineral resources, Senegal has introduced strict regulations to ensure the responsible and sustainable exploitation of its natural resources.
Senegal has a well-defined legal framework to regulate the mining sector. The Mining Code of 2016 (Law No. 2016-32) and its implementing decree of 2017 (Decree No. 2017-459) set out the principles governing the exploration, exploitation, and management of mineral resources. These texts define the rights and obligations of the holders of mining licences, the conditions for granting these licences, and the associated royalties.
The 2023 Environmental Code imposes specific obligations on mining companies, in particular with regard to the environmental assessment of projects and the management of ecological impacts.
Each mining project must be governed by a mining agreement negotiated between the Senegalese government and the holder of the mining concession. This agreement sets out the specific conditions for mining, including investment, taxes, and royalties.
Mining Titles and the Conditions Under Which They Are Granted
In order to carry out a mining operation, a company must obtain a mining title granted by the Senegalese government. These permits include:
- A prospecting permit,
- A research permit, and
- A mining exploitation licence.
A mining licence gives the holder the exclusive right to extract and freely dispose of mineral substances. It is issued for a period of 5 to 20 years and is renewable under certain conditions (Articles 24 and 25 of the Mining Code). Applicants for mining rights must also comply with environmental obligations, including the completion of an environmental impact assessment (Articles 78, 79 of the Mining Code). Failure to do so may result in the withdrawal of the licence.
Mining Taxation in Senegal
Senegal’s mining tax system is structured to maximise government revenue while encouraging investment. The main elements of the tax system are:
- Fees and royalties: A fixed fee of FCFA 10,000,000 for the granting of an exploitation permit (Article 48 of the Mining Code) and mining royalties, which are paid quarterly and vary according to the type of mineral and the stage of production.
- Tax incentives: The Mining Code provides for tax exemptions for certain mining activities and equipment, particularly during the exploration phase, when holders are exempt from customs duties and taxes, VAT, and COSEC levies (Articles 89, 90 of the Mining Code).
Social and Environmental Impact
Senegal attaches great importance to social and environmental issues in the mining sector. Companies are required to comply with strict environmental standards, including waste management, ecosystem conservation, and occupational health and safety. Environmental impact studies are mandatory, and permits can be revoked for serious violations (Articles 109, 110 of the Mining Code).
Recent Reforms
Since his election in March 2024, President Bassirou Diomaye Faye has initiated major reforms to strengthen the transparency and governance of Senegal’s mining, oil, and gas sectors. A comprehensive review has been launched to ensure that the exploitation of natural resources fully benefits the state and its citizens, while safeguarding the rights of investors. The government also plans to renegotiate key contracts to bring practices into line with new national priorities, particularly in terms of transparency, taxation, and environmental management.
Amid these ambitious reforms and increasingly stringent regulations, UGGC Africa stands out for its legal expertise. The law firm supports mining companies in Africa with tailored guidance on compliance, investment, and negotiations, addressing the specific challenges of regulation, taxation, and sustainability
