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Part B: Mineral Rights - Part B-4: ASM Licencing - 27. Small Scale Licencing | 27.5. Specific Obligations of a Licence Holder

As a general matter, the obligations of holders of small scale mining licence s are the same as those of the holders of large scale exploitation licences, except that certain environmental, social, labour and reporting obligations are often lighter for SSM licence holders for the reason that their operations are smaller in size and therefore in impact, the term of their licenses is shorter than the term of large scale exploitation licenses, and their projects involve a much smaller investment. SSM licence holders may also benefit from lower royalty rates and more favourable tax treatment in countries that have policies of promoting local mining entrepreneurship.

The obligations of SSM licence holders may include the responsibility or duty to undertake certain actions, or restrictions from undertaking certain actions or causing certain effects. The provisions setting forth such obligations may occur in articles specific to the license, in general provisions that apply to all licenses, and sometimes in other miscellaneous parts of a mining law. Some of the provisions may cross reference other laws such as Land and Environment for purposes of harmonizing multiple uses of the surface and subsurface of land, and meeting national commitments on climate control, for example, among other issues that are multi-sectoral in nature. In any event, all of the provisions or references to provisions on the obligations of SSM licence holders should be grouped in a single chapter of the mining law, for clarity and avoidance of misinterpretation. The provisions on obligations may include:

  • management of the impact on the environment, and site rehabilitation,
  • provision of a surety to guarantee environmental compliance,
  • health, safety and security practices,
  • employment conditions,
  • social obligations including local hiring, training and promotion; local procurement; and contribution to sustainable local development;
  • requirement to follow prescribed land access procedures, which may include the consent and compensation of rightful owners or lawful occupiers of land for disturbance of their rights,
  • observing the rights of other land users and mining right holders, as well as prohibitions or restrictions on mining operations within a certain distance of roads, power lines, railways, buildings, cemeteries and parks or nature reserves,
  • human rights issues including prohibitions on child labour,
  • compliance with regulations on certification of origin of minerals sold,
  • reporting requirements as to production, shipments, sales, payments to the Government. etc.,
  • payment of annual fees per surface area held under the license, and
  • payment of royalties and applicable taxes.

Whereas the provisions on obligations of the holder of a small-scale mining exploitation licence may include fewer reporting requirements than those that apply to other types of licenses, such provisions will often forbid or limit the use of explosives or heavy machinery as a condition of remaining within the definition of a small scale mining operation.

27.5. Example 1:

Article [_]

The holder of a small-scale mining licence shall–

(a)within the limits of its competence and resources, carry on in good faith, in the licensed area, exploration or mining operations;

(b)furnish the [Regulating Authority] with such information relating to its exploration or mining operations as the Director may reasonably require or as may be prescribed;

(c)carry out promptly any directives relating to its exploration or mining operations which may be given to the holder by the [Regulating Authority] for the purposes of ensuring safety or good mining practices;

(d) if not personally supervising the exploration or mining operations under the licence, employ a Mines Manager for the purpose of supervising its exploration or mining operations provided that all such Mines Managers must be approved by the Director and shall carry with them such means of identification as the [Regulating Authority] may direct;

(e) before beginning or ceasing any exploration or mining operations notify the appropriate local government authority or local authority and an authorised officer, of the intention to begin or cease exploration or mining, as the case may be;

(f) substantially comply with any community development agreement required under this [Act][Code][Law];

(g) sell the minerals obtained in the mining area as prescribed;

(h) carry out rehabilitation and reclamation of mined out areas;

(i) keep accurate records of winnings from the mining area and such records shall be produced for inspection on demand by the [Regulating Authority] or a duly authorised officer; and

(j) submit all reports as prescribed.


Drawn from Sierra Leone’s mining law (2009), this provision includes the following key obligations:

  • carrying out exploration and mining in a reasonable within the required competence.
  • furnishing the required information to the Director of Mines
  • carrying directives promptly to ensure safe and good practices
  • Appoint manager to supervise operations
  • notifying appropriate local authorities when beginning or ceasing operations
  • keeping accurate records and submitting required reports
  • selling minerals in prescribed manner
  • complying with community development agreements
  • carrying out required rehabilitation and reclamation of land

In addition, a SSM licence holder should also have a scheme in place for employing and training local people.

27.5. Example 2:

Article [_]. Registration of small scale licensees

(1) A person engaged in or wishing to undertake a type of small scale mining operation shall register with the [cadastral registry] of the designated area where the person operates or intends to operate

(2) A person shall not be granted a licence under article [_] unless the person is registered under this article.

Article [_]. Operations of small scale miners

A person licensed under section [_] shall observe good mining practices, health and safety rules and pay due regard to the protection of the environment during mining operations

Article [_]. Compensation for use of land

Where a licence is granted in a designated area to a person other than the owner of the land, the licensee shall pay compensation for the use of the land and destruction of crops to the owner of the land that the [Regulating Authority] in consultation with the [relevant government agencies] with responsibility for valuation of public lands may prescribe

Article [_]. Use of explosives

A small-scale miner shall not without the written permission of the [Regulating Authority] use explosives in the area of operation.

Article [_]. Amendment of mineral at right to add other minerals

(1) Where in the course of exercising a mineral right under this [Act][Code][Law], the holder discovers an indication of a mineral not included in the mineral right, the holder shall within thirty days of the discovery, notify the [Regulating Authority] in writing of the discovery

(2) The notification given under subsection (1) shall

(a) contain particulars of the discovery, and

(b) the site and circumstances of the discovery.

(3) The holder of the mineral right may in the prescribed form, apply for the mineral right to be amended to

(a) include an additional mineral, or

(b) exclude a mineral.

(4) Subject to this [Act][Code][Law] and unless the land which is the subject of the mineral right, is subject to another mineral right in respect of the mineral applied for under subsection (3), the [Regulating Authority] shall amend the mineral right on the terms and conditions that may be prescribed.

(5) A mineral right shall not be granted for another mineral over the same area of land subject to an existing mineral right unless the holder of the existing right is notified and given the first option of applying for the right.

(6) A notification given under subsection (5) shall contain

(a) particulars of the mineral applied for and

(b) the area applied for.

Article [_]. Obligations of holders of mineral rights

(1) The holder of a mineral right shall at all times appoint a manager with the requisite qualification and experience to be in charge of that holder’s mineral operations.

(2) The holder of a mineral right shall notify the [Regulating Authority] in writing of the appointment of a manager and on each change of the manager.

Section [_]. Records of and reports by mineral right holders

(1) A holder of a mineral right shall maintain, at an address in [country] notified to the [Regulating Authority] for the purposes of this section, the documents and records that may be prescribed and shall permit an authorized officer of the [Regulating Authority] at a reasonable time to inspect the documents and records and take copies of them.

(2) A holder of a mineral right shall furnish the [Regulating Authority] and other persons prescribed, with such reports on the mineral operations of and geological information attained by or on behalf of the holder.


Drawn from Ghana’s mining law (2006), this provision includes many of the obligations in the previous example, but goes further to address compensation for the use of land, the use of explosives and the process for adding additional minerals to the license.