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domenica 2 marzo 2014

Revive the mining industry

Hydrocarbons have long been the backbone of the Algerian economy, but in recent months have been placed under the sign of encouragement activities in other extractive industries, following the entry into force of new legislation increasing mining production .
It is indeed writes office expert Oxford Business Group in its latest publication on Algeria. The text of the new mining law was approved by the National Assembly and the upper house of Parliament in late January . Seen as crucial , it should help to stimulate further exploration and production in the sector, through reforms that bring greater transparency to the procedures and offer more tax incentives. The Minister of Energy and Mines Youcef Yousfi said that the law was intended to attract investors "confirming the interest granted by Algeria in the mining sector," while stressing the importance of job creation and preservation of the environment.

EMBRACING CHANGE
Legislation paves the way for the government's strategy to take a leading role and help the sector realize its full potential by focusing on two areas that are the exploration and research. One of the key measures of the law is to strengthen the responsibilities of the Office of Geological and Mining Research , which sees its ability to increase both in terms of human resources and material resources. Other government agencies should also play a more important role. Following restructuring, the new Agency Geological Survey of Algeria, formerly National Agency of Mining Patrimony will be responsible for the management of geological and mining infrastructure.

Another result of the restructuring, the National Agency of Mining Activities , formerly known under the name of National Agency of Geology and Mining Control , will be tasked to manage the mining assets and controlling the activities of the sector. Both agencies should actively participate in the development of mining policies. The law provides several incentive measures to encourage investment by private enterprises in the sector.

According to the Ministry , Algeria currently has more than 400 small mining operators who share more than three quarters of the active sites . Exemption from value added tax (VAT) has been given to capital goods used for prospecting , exploration and mining infrastructure creation , as related services sector. The legislation also marks the end of duties, taxes and customs fees on imported equipment intended to be used directly in mining activities.

STRATEGIC THINKING
The law defines two different categories of mineral resources - general and strategically subject to different rules. The first category allows any Algerian company to engage in exploration and mining, provided they have sufficient technical and financial resources, while strategic resources can be explored and exploited by the state and public institutions.

Radioactive substances , metallic minerals and non-metallic industrial use , precious metals, precious and semi -precious stones , as well as large deposits enjoying low operating costs due to ideal geological conditions , are listed in the category of strategic resources. Provisions enabling public companies to use foreign partners for projects however provided, on condition that the state retains a 51 % - similar to that which applies to the Algerian hydrocarbon sector rule.

Untapped potential
In Algeria , there are areas rich in mineral resources in both the north and south of the country , with more than 1,100 sites across the 48 provinces . According to the latest data published by the Department for the year 2009, production would have amounted to 1.3 million tons for iron, 1 million tonnes of phosphate , 20 million tons of limestone , 10.4 million tonnes of clay and 1.8 million tonnes of gypsum.

The Algerian government is hoping that his efforts to galvanize the sector through new exploration will result in job creation , especially in remote areas of the country, where an increase in economic activity would be welcome. According to the Ministry , the sector employed about 30 000 people in 2009. Production from mining and quarrying Algerian dropped in recent years and the figures show a decline in 2010 ( 3.3%), 2011 ( 9.5%) and 2012 ( 5.6%).

However, the first six months of 2013 show signs of recovery, and the National Statistics Office reported a production increase of 2.7 % yoy . The growth of the category of stone, sand and clay , which shows an increase of 5.2 % , is partly responsible for this inversion. There has been in recent years significant reforms of mining regulations across Africa , whether in large traditional producers such as Ghana and South Africa and smaller producers like Morocco, many of them have chosen to increase the royalty rates and tax to encourage an increase in local revenues.

Result , the incentives provided for in the new law, has chosen a different course , may well attract new foreign mining operators , but above all hopes are for the sector and with the government installed the controls, the Algeria should engage in a period of growth of the mining exploration.
Relancer l’industrie minière