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Part B: Mineral Rights - Part B-3: Large Scale Exploitation | 26. Large Scale Exploitation Licensing

Activities involving the extraction of minerals that require complex technologies and equipment in order to separate the minerals from the host rock or in order to access the orebody at depth underground are referred to as large scale exploitation. Such mining activities may be conducted in an open pit, underground or alluvial type of operation, depending on the location and nature of the mineral deposit. Large scale exploitation typically includes relocation of large amounts of waste rock and water from the mine.

Most countries, including all African countries, require separate licences, permits, authorizations or concessions for exploration and exploitation, respectively. By doing so, the country is able to impose certain conditions or prerequisites that must be met before a company is granted the right to proceed from exploration to exploitation. Some countries (such as Mexico and Peru), however, grant a single concession for exploration and exploitation. In those countries, the holder of such a concession is able to proceed from exploration to exploitation without obtaining a separate exploitation licence, but subject to compliance with environmental impact assessment and mitigation rules and other operating requirements. This is similar to the case in some African countries whose mining laws provide for the execution of a contract with mining companies covering both the exploration and the exploitation phases of a project.

Many mining laws provide that exploitation rights to a previously worked or studied area containing a deposit for which substantial geological information is already available, and for which no exploration licence is currently in effect, are to be awarded based on a competitive tender process. In such cases, the mining law will provide for the reservation of such areas for tender, and for the establishment of the rules that will apply to the process. Those rules may contain provisions for the compensation of the entity that carried out the prior exploration work (for example, under a prior exploration licence that has expired) that identified the deposit and provided the basis for conducting the tender process. The rights granted in such cases may include both an exploration stage, in order to complete certain studies and plans that must be submitted as a prerequisite to exploitation, and a subsequent exploitation stage.

Large scale exploitation activity can generally be divided into sub-phases of (1) mine development and construction, (2) extraction, processing and marketing of mineral products derived from the mine, and (3) mine site closure and site restoration.