Senegal: A Brief Overview Of Mining In Senegal

Last Updated: 22 June 2017
Article by Alban Dorin and Lara Welsh

Overview of Senegalese legal system

Senegal is a civil law jurisdiction, meaning that the core principles of law are codified and serve as the primary source of law. The Constitution of Senegal, adopted by constitutional referenda on 7 January 2001, is the fourth constitution of the country (after those of 1959, 1960 and 1963). As with most Franco-African countries, the Constitution of Senegal is heavily based on the 1958 French Constitution, considered as being the 'Mother Constitution'.

Whereas in a common law legal system(such as England and Wales) judicial cases are regarded as the most important source of law(giving judges an active role in developing rules), in civil-law systems codes and statutes are designed to cover all eventualities adjudges have more limited role- to apply the law to the case in hand. To ensure consistency, courts in common law jurisdictions abide by precedents set by higher courts examining the same issue, whereas in a civil law system past judgments are really no more than a(loose) guide.

The judicial branch consists of the Conseil Constitutionnel, the Conseild'Etat, the Cour de Cassation, the Courdes Comptes and the Courts and Tribunals.

The OHADA legal system applies in Senegal

– OHADA is a uniform system of business laws adopted by 17 west and central African nations. OHADA stands for Organisation pour l'Harmonisation en Afrique du Droit des Affaires (Organisation for Harmonisation of Business Lawin Africa) and was created on 17 October 1993.

OHADA provides for a uniform system of business law directly applicable in its Member States through "Uniform Acts" which have been largely inspired by French law. These Uniform Acts cover matters such as corporate law, security, insolvency, arbitration and recognition of foreign courts' decisions.

Senegal is part of WAEMU (or UEMOA in French) - The West African Economic and Monetary Union – which is an organisation of 8 West African states established to promote economic integration among countries that share the CFA franc as a common currency. The CFA Franc (FCFA) is linked to the Euroata fixed rate of 655,957 FCFA to 1 Euro.

It is also part of ECOWAS - The Economic Community of West African States - which is a regional group of 15 West African nations created to promote economic integration across the region.

Overview of laws applicable to mining activity

US$5 billion was invested in Senegal's mining sector from 2000 to 2013 and the Government wants Senegal to become one of Africa's top seven gold producers, with an annual production of 17 tonnes of gold by 2020. With this in mind, President Macky Sall made mining industry reform one ofhis priority areas following his election in early 2012. Recognising the great significance that the mining industry holds for Senegal, his goal is to increase foreign investment in the mining sector thereby increasing its contribution to Senegalese GDP.

The Parliament of Senegal passed a new Mining Code (No. 27/2016) on 30 October 2016 (the "New Mining Code"). The New Mining Code applies to new applications, with the provisions of the 2003 Mining Code (the "Previous Code") continuing to apply to existing permits. The passing of the New Mining Code follows a three year consultation and legislative drafting process and introduces many initiatives that have been used within the region. The bill was presented to the President for promulgation on 8 November 2016 (law no 2016-32).

Whilst the framework of the mining regime remains substantially the same, key changes from the Previous Code include:

  • Type and length of mining permits Under the Previous Code the distinction between a 'mine permit' and a 'mining concession' caused confusion for investors. The New Mining Code hopes to simplify these titles. Under the New Mining Code a company can apply for a 'small mine permit' or a 'mining permit'.
    A 'small mine permit' will be limited to a daily treatment capacity of 500 tonnes of minerals and a mining area of 500 hectares. It will be issued for an initial term of 5 years (increased from 3 years under the Previous Code). It may be renewed for 3 years at a time, with no limit on the number of renewals. A 'small mine permit' holder must commence mining operations within 3 months of the small mine permit being granted.
    There are no limitations on the scale of operations under a 'mining permit'. A mining permit will be issued for an initial term of between 5 and 20 years, depending on the mineral reserves identified and the investment required - this is less than the maximum 25 years for an initial permit under the Previous Code. Mining permits will be renewable as many times as necessary until the resource is exhausted. Holders of 'mining permits' must commence mining operations 'as soon as possible'. No specific timeframe is included but the New Mining Code states that, if operations have not commenced within one year of the date of entry into force of the mining permit, the permit holder will be liable to penalties of US$ 100,000 per month for the first 3 months and increasing thereafter. If the permit holder has not commenced work within 24 months the State may revoke the mining permit.
    Mining companies still need to enter into a mining convention at the same time as the permit is granted. The convention must be published on the website for the Ministry of Mines following execution. It cannot derogate from the provisions of the New Mining Code, but may supplement them, and it must detail the rights and obligations of the parties, including the stability of the legal conditions under which the mining title was granted.
  • Fees, royalties, taxes and tax relief
    One of the key objectives of the New Mining Code is to increase revenues to the government from the mining sector. See 'Taxation of mining projects' below for further details.
  • Introduction of production sharing agreements
    The New Mining Code permits the state of Senegal and a mining company to enter into a production sharing agreement, giving the mining company the exclusive right to research and mine a particular area and recover the cost of doing so from sale of the mined substance. The profits from the sale of the product are split between the State and the mining company in the amount specified in each individual agreement. Where a production sharing agreement exists, the mined substance will not be subject to the quarterly mining tax outlined below.
  • Enhanced social and environmental obligations
    The New Mining Code introduces an obligation for mining title holders to contribute annually to a local development fund in the amount of 0.5% of sales, minus 'annual fees' (unspecified). The purpose of the local development funds is to promote the economic and social development of local communities residing around mining areas, and must include women's empowerment projects. The introduction of a local development component has been a common theme in recent years in African jurisdictions, for example Mali and Guinea have also introduced compulsory local development contributions.
  • 'Small mine permit' holders (who had no obligations regarding rehabilitation costs under the Previous Code) must provide a guarantee as security for rehabilitation costs under the New Mining Code.
  • In addition to rehabilitation obligations, under the New Mining Code all mining title holders are required to:
  1. respect, protect and implement human rights in areas affected by mining operations;
  2. respect the provisions of the Forestry Code where the mining title has been granted over a "classified forest zone"; and
  3. respect the principles and obligations under the Extractive Industries Transparency Initiative (EITI), such as declaring all payments made to the State to the EITI authorities.
  • Penalties
    The New Mining Code lists various potential infractions which may be penalised including non-payment of taxes, health and safety violations and illegal mining activity or storage, transport or sale of mineral substances.
  • Transparency
    Under the New Mining Code mining companies, as well as the State, are subject to more thorough audits. All mining revenues due to the State will be published in publicly available statements. In addition to abiding to the principles of EITI the State is free to appoint independent firms to audit mining companies.

Other laws affecting the mining industry:

  • The Civil Code
  • The revised Uniform Act relating to general commercial law dated 15 December 2010;
  • Law n°2001-01 enacting the Environmental Code, dated 12 April 2001;
  • Law n°98/03 dated 8 January 1998, enacting the Forest Code and its implementing decree dated 20 February 1998; and
  • Regulation n°09/2010/CM/UEMOA dated 1 October 2010.

Restrictions on foreign ownership

The mining permit must be held by a company incorporated under Senegalese law. Under the Previous Code, foreign investors were not permitted to own 100% of the shares in a Senegalese company. This restriction has been removed under the New Mining Code.

Local content

Mining title holders may freely choose their suppliers, sub-contractors and service providers as well as their partners. However, mining title holders and their suppliers and sub-contractors shall use, whenever possible (i) services and material originating from the Republic of Senegal and (ii) products made or sold in the Republic of Senegal, provided these services and products are available at competitive conditions regarding their price, quality, warranties and time delivery. Mining title holders have to develop and publish an annual procurement plan. See also 'Enhanced social and environmental obligations' above.

Available structures for borrowing vehicles

Limited liability companies, public and private corporations and joint ventures are all forms of business in Senegal. There are no restrictions on the nature of a legal entity holding rights, however (as stated above) only a legal entity incorporated under Senegalese law can hold a mining title or a mining concession. The type of company most commonly used in Senegal to hold a mining title are sociétés à responsabilité limitée or sociétés anonymes.

Government free/earned carried interest in projects

The state has a 10% free participation in the mining company at the exploitation stage and may negotiate for itself an additional participation in the capital of the mining company.

Taxation of mining projects (including royalties)

Most of the tax provisions included in the Previous Code were transferred to the General Tax Code so investors are no longer able to rely on the mining code as the key source of information on the fiscal and customs regime.

Under the New Mining Code entry fees for the grant of permits have increased. An annual surface royalty payable by all title holders has been introduced. The annual surface royalty for a 'small mine permit' is FCFA 50,000 per hectare and for a 'mining permit' is FCFA 250,000 per square kilometre.

The specific 'mining tax' (which was included in the Previous Code) has been retained, but under the New Mining Code its application has been revised such that all authorised mining activities are subject to a quarterly mining tax levied on the market value of the commercialised product. The rate varies according to the mineral substance being mined, for example iron ore (concentrate 5%, locally processed 2%) and gold (1.5%).

Various tax benefits contained in the Previous Code have been revised in the New Mining Code. During the period commencing on the date of entry into force of the mining permit or small mine permit and ending on the first date of commercial production (the "Investment Period") the mining title holder will be exempt from most taxes and fees including VAT and the COSEC port charge. Several taxes have been carved out from this exemption (as compared to the Previous Code) including the community levy. The provisions of the Previous Code which exempted mining title holders from export tax have been removed such that export tax is now payable in respect of products mined within the mining permit area from the date of entry into force of the mining title.

The mining title holder can freely export extracted mineral substances, their concentrates, their primary products and other derivatives (subject to completion of legal formalities) and there is an exoneration from exportation tax.

Resident corporations are subject to tax on their worldwide income. The standard rate of corporate income tax is 30%, which is imposed on net profits (after deduction of allowable expenses and charges). Capital gains are treated as operating profits and included in the corporate income tax base. VAT is 18% for all products and services. There is a fixed payroll tax of 3% of taxable gross salary.

Withholding tax on interest and dividends

Dividends paid to a resident or non-resident are subject to a 10% withholding tax unless (in the latter case) the rate is reduced under a tax treaty. Interest on loans paid to a resident or non-resident company or individual is subject to a 16% withholding tax (unless reduced under a tax treaty). Royalties and technical service fees paid to a foreign entity are subject to a 20% withholding tax, unless reduced under a tax treaty.

Borrowers could consider structuring a loan with a foreign holding company as Borrower, in a jurisdiction which has a double tax treaty with Senegal, for example Mauritius - but this is not without issues.

F/X issues; ability to hold foreign currency; ability to maintain offshore accounts

All proceeds from the sale of minerals must be repatriated to Senegal within 30 days of receipt.

Within the CFA Franc zone the transfer of funds is free. There are no exchange controls between Senegal and the other countries which belong to the CFA Franc zone (including France).

In line with UEMOA regulations, most financial operations must be performed through authorised (locally licensed) intermediary banks, for example SGBS or Ecobank. In order to open offshore accounts or onshore foreign currency accounts approval of the Minister of Finance (with a prior consent of the BCEAO (Central Bank of the UEMOA)) is required. In our experience the ministry is reluctant to grant consent for offshore accounts or onshore foreign currency accounts and so in practice the opening of offshore accounts may prove difficult.

There is the possible exception in the UEMOA regulations which arguably permits the opening of a foreign currency account in France without consent (since France is within the 'zone franc'). The position is not clear in this regard – there are differing views on how/ whether this works, especially given that onshore foreign currency accounts require approval.

Cost of granting security

The costs for registering security vary depending on the type of security but generally the stamp duties payable in connection with the registration with the RCCM of a local security (such as a pledge) is 0.25% of the registered secured amount (if the secured amount exceeds €1.5 million), with a cap on registration fees of €75,000.

A Borrower may try to negotiate with Lenders a cap on the amount of fees payable by it in relation to registration and notarial fees. We are aware that certain mining conventions also contain provisions which exempt the Lender(s) from the payment of stamp duties (though this may not be respected in practice).

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2017. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions