The African mining sector political landscape is rapidly changing as countries undergo extensive, positive legislative reform aimed at driving increased revenue from the sector.
This is according to law firm DLA Piper Australian partner David Nancarrow who was addressing delegates on Tuesday at the Paydirt 2015 Africa Down Under Conference.
Nancarrow said the reforms were encouraging new investment in a growing number of African nations – some of whom have struggled historically to attract new investors. “A large number of African countries are undergoing extensive legislative reform in the mining sector,” Nancarrow said.
“The objective of those governments is to increase revenue for their country from the mining sector, as well as provide an attractive environment for direct foreign investment,” he said. “These governments are now attracting new investors as a direct result of the changes they have made to the legislative landscape of their countries.”
Countries that have undertaken the reform process include Kenya, Senegal, Ethiopia, the Democratic Republic of Congo, Tanzania and Mali. Nancarrow said most of these countries were following “common trends” which included improving state participation in projects, tax concessions for project developers, infrastructure support, government transparency and local development support.
He said another key factor to the legislative reforms was introducing systems that avoid unnecessary delays – a new regime that investors found prudent and attractive.
Nancarrow is an experienced lawyer who focuses on project delivery strategies across various engineering and construction projects. He is also a qualified civil engineer who worked in the engineering construction industry as an engineer and project manager for eight years prior to practising law, so is well experienced in major infrastructure projects both internationally and domestically.
“Many jurisdictions are now including provisions to improve state participation in mining , which on average, will be between 5% and 15%. Further, companies willing to invest in mining infrastructure in these countries are being offered a range of tax incentives; including for transport, power and water, as well as opportunities to ‘monetize’ after mining,” he said.
“Legislation that is clear and certain is essential to encourage renewed investment in Africa – especially in the many jurisdictions that have struggled historically to do so. “Countries that do not have such legislation will fall behind. “Now is the time for these countries to follow the leader.”