Guinea Mining Policy and legislation.

During the past few years the mining sector  have been characterized   by  the attempts of modernization and re-structuration from the Goverment in order to make this sector efficient and profitable, and to increase production[1] . This was the goal pursued through the mining code of mid-1995 which is the basis of Guinea Mining policy.  This Code created several mining titles and granted some tax advantages. According to the new government[2] of Guinea, a new mining code, which will be a little more protective to Guinea economy, is on  the way.  In meantime, the mining policy of Guinea laid down by the above 1995 mining code still applies.

1. The mining Titles

• Reconnaissance Permit: Allows prospecting of mineralized sites (which are not under any exploration or exploitation permit. Duration Three to six months.

• Exploration permit: Grants exclusive right to explore for all the substances specified in the permit. Area: 500 Km2. Duration: 3 years, renewable twice for two years each, transferrable.

• Exploitation permit: Exclusive right Grants exclusive right to dispose of all the mineral substances covered by the permit in accordance with the provisions of the mining agreement. The area comprises the ore deposit and the surface installations as defined by the feasibility study. Duration: 10 years  renewable for five years periods.

•  Mining concession: Reserved for large ore deposits which involve important investments and scope of inffracstructure as dfined by the feasibility study; the garnt of the concession is completed by  a Mining convention. The duration 25 years, renewable for 10 years period.  

•  Artisanal mining title: Granted only to Guinean nationals on consigned areas.

2. Mining Tax Regime

·         Title Fees:

Every holder of a mining title must pay fixed and variable surface fees, royalties income tax and other taxes.

Fixed and surface Fees

State participation in gold, diamonds, and gems is 15% free equity.  Particular minerals defined by the code (bauxite iron, ore  etc.) carry 0% free equity.

·         Fiscal Regime: Duty and Customs Exemptions.

-          Income Tax and Others

Corporate Tax: 35% Withholding Tax: 15% Additional Profit Tax: 50% when return on equity exceeds 20

-          Exemptions

Temporary exemption during the exploration phase in respect of certain of equipment listed by the government. During the construction, expansion and start-up phases, the equipment materials, heavy vehicles and tools are subjected to a duty and customs registration fee of 0.5 % of the CIF value.

During exploitation: Full exemption for processing plants (processing ore semi-finished or finished products) is granted. For extractive operations, a 5,6% duty and customs tax on the FOB value of materials, equipment, heavy vehicles, consumables (including fuel) diesel oil and lubricants not used in the processing of the ore in finished or semi-finished products.)

Foreign exchange

Free repatriation of dividends subject to withholding tax.

 

 

 

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[1] Guinea has one of the world’s largest bauxite reserves as well as being one of the largest producers, after Australia. Gold and diamonds are also major export products. Although Guinea has significant commodity reserves, the country has been poorly explored and future potential exists for gold, base metals, iron ore and diamonds.

[2] The Government established after the election of October 2010