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Part B: Mineral Rights - Part B-2: Exploration - 25. Exploration Licensing | 25.7 Term of Licence

The term of an exploration licence should be long enough to allow time for enough investigation to enable the licence holder to make a determination of whether to pursue intensive drilling and sampling of specific targets within the licence area, provided that renewal terms are available during which feasibility studies, environmental and social impact studies and required or necessary plans for local procurement, hiring and training, and community development can be developed or negotiated. It is thought that the initial term should be short enough to prevent licensees from holding large areas for excessive periods without developing them; however, this goal could also be achieved by gradually increasing the annual fees per unit area payable by the licensees, to encourage voluntary relinquishment.

In setting the term of the exploration licence, consideration should be given to whether the term includes the initial period (typically six months) within which certain conditions prior to the commencement of operations must be fulfilled (for example, preparation, submission and approval of an environmental and social impact mitigation plan; funding of an environmental rehabilitation guarantee or account; presentations to local authorities; and negotiations of surface access rights with the owners or lawful occupiers of land.)

It should be noted that as requirements are increased for the grant of a mining licence (for example, Economic and Social Impact Study (ESIS), community development agreement, local procurement, hiring and training programs), more time will be needed in order to accomplish them.

The typical term of an exploration licence in Africa is 3 years, or a period not exceeding three years. (Examples: Botswana, Cameroon, CAR, Ghana, Guinea, Malawi, Mauritania, Morocco, Nigeria, South Africa, Uganda, Zimbabwe.)

The term is 4 years, or for a period not exceeding four years, in Côte d’Ivoire, DRC for precious stones, Sierra Leone and Tanzania. The term is 5 years in the DRC except for precious stones, as well as in Madagascar and Mozambique. In Angola the term is set by contract.

25.7 Example 1:

Article [_]

(1) Where an applicant is entitled to the grant of an exploration licence under the terms and conditions of this [Act][Code][Law], the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-

(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;

(2) In determining the date for the commencement of the period for which the licence is granted, the licensing authority may take account of any period not exceeding six months from the date of the grant which is required by the applicant to make any necessary preparations for exploration operations.

Annotation

Drawn from Tanzania’s mining law (2010), this provision reflects a progressive awareness of the potential need for a somewhat longer than normal exploration term as well the need to accomplish certain formalities and obtain certain approvals before actual exploration work can begin.

25.7 Example 2:

Article [_]

(1) Where the [Regulating Authority] is satisfied that an initial period is required to make the necessary preparations to carry on exploration operations he may, in an exclusive exploration licence, specify a period (not exceeding three months) as the preparation period.

(2) The term of an exclusive exploration licence is the period for which the licence is granted, not exceeding three years, stated in the licence, and any preparation period specified in the licence.

(3) The term of an exclusive exploration licence commences on and includes the date of the grant of the licence, as stated in the licence.

Annotation

Drawn from Malawi’s mining law (1981), this provision provides for the standard exploration term of up to three years, but also takes into account the potential need for a preparation period and provides for the possible incorporation of a preparation period of up to three months into the term of the exploration licence (called prospecting licence).