Guinea is rich in mineral resources such as bauxite, gold, and iron ore. Despite some instability in recent years, we have seen a dramatic increase in mining investment, which continues unabated.
Our team has a long history working in Guinea for both government and investors. First engaged in 2013 to assist the Government with the introduction of its mining code, subsequent engagements have included the development of some of the country’s most important projects, the retender and negotiation of mining licenses, infrastructure development, and stock market listings.
One of our best understood countries, here’s a snapshot of the legal framework for mining.
Framework – Mining activities in Guinea are governed by the Mining Code 2013, supported by regulations and laws concerning taxation, foreign investment, and environmental protection.
Mining Rights – The following are of most interest to international investors: (i) ‘Exploration Permit’ for 3 years, renewable twice for 2-year terms with area reduced by half; (ii) ‘Industrial’ or ‘Semi-Industrial’ Mining Operation Permit for 15 years or 5 years renewable, allowing for exploration and mining; or (iii), Mining Concession, for larger projects, for 25 years and renewable for 10-year terms, conferring broad rights for mining operations.
Mining Agreement – Mining operators must enter a mining agreement (convention minière) with the State governing the mining activities, fiscal and customs regime, and stability. Negotiating and understanding the rights and limits of these contractual documents is crucial to a mining operation.
State Participation – Mining rights must be held by a Guinean company but there are no restrictions on foreign shareholders or requirements to partner with a local shareholder. The State holds a 15% free-carried interest in projects and—while we’ve never seen it exercised—has the option to purchase additional shares at market value, up to a maximum participation of 35%.
Transfer and Control Change - We are frequently asked about approvals for transactions relating to mining titles and their holders, particularly for (i) transfer or farm-out of a mining title, (ii) Technical Partnership Agreements, (iii) direct or indirect change-of-control of a holder, (iv) change in the holder’s capital. Each of these actions has specific requirements, and failure to obtain the necessary authority approvals can result in revocation of the mining title.
Taxes and Fees – Some taxes imposed under the General Tax Code and the Mining Code include: Corporate Tax (30%), Withholding Tax (15%), Royalties (3–5%, depending on the mineral), and a Local Development Tax (1% of company turnover). An Export Tax is also imposed on minerals exported in crude form. Once engaged, we are able to work with the law that allows for the renegotiation of some (but not all) taxes and charges under a Mining Convention.
Local Priority – priority is given to Guinea workers, contractors and service providers in mining operations. Companies must contribute to funds for local development and capacity development.
International Engagement – Guinea is a member of the West African Economic and Monetary Union (WAEMU), the Kimberley Process, and the Extractive Industries Transparency Initiative (EITI), and has entered into numerous bilateral investment treaties.
Why Guinea? – Bolstered by a wealth of natural resources, Guinea offers a predictable and investor-friendly framework for mining. With significant bauxite reserves and ongoing developments in gold and iron ore, the sector continues to attract international investors—a trend we expect to continue for years to come.
Why Serus? – Our bilingual team has extensive experience working in Guinea. We manage project acquisition and due diligence and prepare all forms of mining contracts including earn-in, royalty, joint-venture, conventions, and construction agreements.
Unlike many international advisors, we work in French and English, avoiding the cost, delays and mistakes associated with translations. We know the key players and procedures in Guinea and would be delighted to accompany you with your mining project.
Please contact our team or email felix@seruslegal.com.
The contents of this insight do not constitute legal advice and are subject to input from a lawyer.