A new mining code (the “New Mining Code”) was voted by the Ivorian Parliament on March 5. Current mining titles will be valid for their remaining term but their renewals will be subject to the provisions of the New Mining Code.
Changing the mining code had been a recurring theme with Ivorian governments over the past years and the mining companies and Shearman & Sterling had provided industry comments on previous bills at various stage of the process. This New Mining Code aims, as is often announced in such cases, at modernizing the mining sector and increasing its transparency.
As a whole, it follows current trends by emphasizing local community development and environment protection as well as refining mining permits application, renewal and perimeter.
Codifying existing local practices, the New Mining Code now expressly requires mining companies to enter into a mining convention governing the exploitation phase and guarantees the stability of its tax and customs regime. Taking into account changing market conditions, the government has not attempted to reinstate the additional profit tax or introduce a production-sharing mechanism. Additionally, it has sought to clarify the terms and conditions of the State participation in the share capital of the project company, although the provisions of the New Mining Code remain broad enough to leave a certain degree of flexibility to the government or of uncertainty for investors.
Whilst eagerly expected and containing important and useful provisions, its full impact cannot be entirely assessed as for instance royalties imposed on mining title holders remain set out in a separate ordinance and most of the New Mining Code provisions will require additional decrees to be fully implemented.