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Senegal mining code: New version to be released by year-end

Mines and industry minister, Aly Ngouille Ndiaye, has revealed that a new Senegal mining code will finally be in place by the end of 2015.

This is according to law firm ENSAfrica and its weekly Africa Business in Brief newsletter.

The legislation will replace a 2003 version but has taken much longer than expected to be introduced. A review was started by previous president Abdoulaye Wade, following which the code was expected in 2013 before the government decided to hold extensive consultations and asked several law firms to assess the proposed legislation.

The most recent review recommended that Senegal introduce the principle of quotas for annual production to improve resource management and increase the life span of mines.

The government has also confirmed it will impose royalties according to the type of mineral, and it is likely that a tax related to the size of the concession will be reinstated after disappearing from some versions of the code.

The legislation has been held up by the government’s desire to give investors a best-practice code, but also the frequently repeated wish to start benefiting from a sector that provides less than 2% of GDP.

Ndiaye has previously complained that the government received just 2% of mining industry profits of US$294 million in the decade since the previous code was introduced. This was due to a wide variety of exemptions − most of which will now disappear in the new code − and low tax rates.

Despite falling commodity prices, the government is highly likely to raise the royalty rate for gold from 3% to 5% in line with the 2013 agreement with Teranga Gold, which operates the Sabodala mine. However, other mineral rates will be moderated by the need to expand a small industry.

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