Morocco mining guide

The Moroccan mining legal framework

Until 2016, the mining sector in Morocco was regulated by the Règlement Minier i.e. Dahir, dated 16 April 1951 (the “Dahir”) completed by Decree no.2.57.1647 dated 17 December 1957 implementing the provisions of the Dahir and arrêté viziriel dated 21 April 1951 relating to the filing and registration of research permits (as subsequently modified by arrêté viziriel dated 1 January 1953).

A new mining regulation was introduced under law n°33-13 dated 1 July 2015 (enacted by Dahir n°1-15-76 dated 6 August 2015) (the “New Mining Code”) and Decree-Law n°2-15-807 dated 20 April 2016 (the “Decree”). Effective as from the publication in the Official Gazette of the Decree i.e. 21 July 2016, the New Mining Code incorporated some of the principles contained in the previous legislation and introduced new provisions, including:

• Extending the provisions of the New Mining Code to all mineral substances used for industrial purposes with the exception of construction and civil engineering purposes;
  
  
• Abolishing categorisation of mines and restrictions of permits in respect of such categories;
  
  
• Abolishing concessions and introducing new mining authorisations including an exploration authorisation enabling the holder to carry out exploration programmes and giving priority to holders for applications for exploration permits;
  
  
• Altering the conditions for granting exploration permits and the renewal period (three years instead of four);
  
  
• Introducing committees to arbitrate between the authorities and the operators and simplifying administrative formalities; and
  
  
• Defining the statutes applicable to mining companies.

State ownership of minerals

The New Mining Code is applicable to all mineral substances including but not limited to:

• Solid fossil fuels, graphite as well as oil shale, limestone and oil sands


• Metallic substances


• Industrial rocks and minerals


• Phosphates


• Radioactive or non-radioactive substances that can be used in atomic energy


• Ornamental rocks and precious stones


• Carbon dioxide


• Dumps and slag heaps


• Groundwater

Mineral substances that can be used as materials for civil engineering or construction are not considered as mines. This applies in particular to sands and clays intended for civil engineering and construction, limestone intended for building stone or gravel, marbles and granites intended for coating, as well as ghassoul and clays intended for pottery, which are considered as quarries.

Mining titles under the former regime

The Dahir provided for three different categories of mining titles:

• Exploration permit (Permis de recherche)
  Exploration permits gave an exclusive right to search for mineral substances of a given category within an area of 4 km by 4km. This permit, which was valid for a period of three years and was renewable for a second four-year period, gave the holder the right as well as the obligation to explore for the substance classified in a given category.


• Mining permit (Permis d’exploitation minière)
  If a workable deposit was discovered, and the applicant had fulfilled the conditions relating to the exploration permit (including carrying out the required exploration works), the exploration permit might be transformed into a mining permit. This new permit, which was issued for a period of four years and could be renewed three times, entitled the holder to work the deposit and dispose of the substances in the relevant category. After three renewals, an additional 12-year extension might be granted, where relevant. The granting of the mining permit rendered the exploration permit which enabled its constitution null and void, which meant that, since the exploration had produced results, the exploration permit was replaced by the mining permit. It must be noted that the applicant was at this stage also allowed to operate the discovered deposit. A mining permit might be transformed into a concession either at the owner’s initiative or at the initiative of the Ministry of Mine and Energy, in cases where such measure was justified by the importance of the deposit (gisement).


• Mining concession (Concession minière)
  A mining concession gave an exclusive right to exploit mineral substances for a given category within a given area. It was granted for a period of 50 or 75 years, depending on the category of mineral substance, which could be renewed for a 25-year period, if the results obtained by the activity performed under the former concession period were sufficient. Upon the expiry of the concession, the concession was returned to the State, free of any costs and encumbrances, including all of its ancillary immovable assets. The concessionaire might freely dispose of the mineral substances which were subject to the concession, subject to the requisition right that the State might exercise in the public interest (and which gave right to compensation, to be either agreed by the parties or fixed by court). Mining concessions were rare in practice (a few of them were granted decades ago) and have no longer been granted to investors under the New Mining Code.

Mining titles under the New Mining Code

Mining licences are limited real estate rights that may be subject to mortgage but are distinct from the ownership of the land. Therefore, mining operators must always secure applicable occupancy rights separately from the applicable mining title.

• Exploration permit (Autorisation d’exploration)
  It is valid for a period of two years and renewable once for a one-year period, for an area comprised between 100 km2 and 600 km2. Applicants must enter into a contract with the mining administration detailing the contemplated exploration and investment activities. An exploration permit can only be granted to a legal entity. The exploration area depends on the works programme and the investments contemplated by the applicant. It is not possible to hold more than four exploration permits.


• Research permit (Permis de recherche)
  It is valid for a three-year term for a square area with sides of at least 4 km in length and is renewable once for four years, subject to a program detailing at least the contemplated expenditures and work. The research permit confers to its holder, under the conditions set out in the New Mining Code, the exclusive right to search for the products of mines found within the perimeter covered by such permit, including by carrying out geological, geochemical and geophysical studies and work, drilling holes and mining work, for the purpose of determining the existence of a deposit.


• Mining licence (Licence d’exploitation)
  
  (i) The mining license grants its holder the exclusive right to extract and/or develop mining products from a deposit with a view to obtaining merchantable mining products, in particular by means of studies, preparatory work, exploitation work and/or enrichment and/or beneficiation operations of these products, as well as the realization of the infrastructure necessary for such work.
  
  (ii) It is valid for a term of ten years and successively renewable for ten years periods until the reserves are exhausted. Under the former regime, the license was only valid for four years. Furthermore, the granting of a mining licence will now revoke the research permit only for the area it covers. A second exploration permit will be granted for the area that is not covered by the same licence.
  
  (iii) The discovery of a deposit gives the holder of the research permit the exclusive right to apply for a mining license for the perimeter of the said discovery, the application having to be filed before the expiry of the permit. These provisions imply that an application for a license may be refused for reasons other than the failure to file the application within the validity period of the license. However, the New Mining Code does not provide for any guidance as to the reasons for such a refusal.
  
  (iv) Unlike exploration permits and research permits, which do not specify any constraint relating to the nationality of the holder, the beneficiary of a mining license must be a Moroccan law company.

Transition from the former mining regime to the new mining regime

Mining concessions that are valid on the date of entry into force of the New Mining Code remain subject to the legal provisions in force at the time they were granted, but the New Mining Code will apply as soon as they are renewed.

They cannot be renewed as mining concessions per se. Within a period of one year before the expiry of a mining concession, the holder of the said concession may submit an application for a mining license to cover the exploited deposit or deposits, in accordance with the provisions of the New Mining Code and the Decree. Failing this, the concession will be repealed and the land concerned will become available for exploration.

As for the holders of valid research or exploitation permits under the Dahir, the New Mining Code provides that the latter must submit an application for renewal of the research permit or, as the case may be, for its conversion into a mining license within one year of the coming into force of the New Mining Code, failing which the existing permits will be revoked by the administration. This is an important point to check in case of the acquisition of an operator holding mining licences under the former mining regime.

Furthermore, the operators of mineral substances which are considered as quarries before the date of entry into force of the New Mining Code and which are classified as mining products under the provisions of the New Mining Code, must, within one year, submit an application for a mining license to cover the deposit(s) they are exploiting, in accordance with the provisions of the New Mining Code and the Decree. If the application is not filed within the time limit referred to in the first paragraph of this article, the area concerned is released.

Foreign investors’ rights

The three above-mentioned mining rights may only be granted to legal entities. There is no restriction relating to the nationality of the holder of the authorisation except for mining licenses, which may only be granted to Moroccan law companies. It must be noted that the exploration and exploitation of phosphates are a monopoly of the Moroccan State.

Through the investment charter (charte d’investissement), foreign investors may benefit from certain tax and regulatory advantages, in particular if the investment meet certain requirements (size, number of workers etc.).

Investments which are made by foreign investors in foreign currency into Morocco benefit from the so-called convertibility regime provided for by the Moroccan foreign exchange regulations, including in particular the Instruction Générale de l’Office des Changes.

Indigenous population, training and other social obligations

Permits and concessions may not impediment the rights granted to indigenous persons (droits coutumiers) for the extraction of certain substances. However, permit or concession holders may be allowed to override those rights for all or part of the perimeter of their permit, if they agree with the indigenous persons on the payment of compensation which, if they fail to agree, is determined by the authorisation.

Fees, taxes, duties and royalties

The granting and renewal of mining permits are subject to the payment of certain application taxes, which have been revised by the Decree as follows:

• Exploration permit: MAD50 per square kilometre.


• Research permit: MAD2,000


• Mining licence: MAD18,000

In addition to those taxes which are usually applicable, a local annual tax applicable to mining exploitation activities is payable to the relevant region under Article 4 of Law No 47-06 related to local taxes, promulgated by Dahir No 1-07-195 dated 30 November 2007.

The amount of such taxes is based on the quantity of mining products extracted during the mining operation. The rate varies depending on the extraction region between MAD1 and MAD3 per ton extracted.

Lastly, exploration authorisations and research permits are subject to the performance of a minimum amount of work per square kilometre ranging between MAD10,000 and MAD66,000.

Financial capacity of the investors

The award of a mining title (in particular at first an exploration permit) is subject to justification of technical capabilities and financial resources for all operations related to such title. The holder of a mining title must achieve a program for works to be carried out (which must also include the minimum technical and financial means that the applicant undertakes to deploy).

Protection of the environment

Environmental regulation in Morocco is set out in particular by Law n°11-03 dated 12 May 2003, the main purpose of which is to protect the environment against any kind of pollution and degradation and to implement a liability legal framework guaranteeing compensation for any damages caused to the environment.

In this context, the New Mining Code specifies that the holders of a mining license must elaborate an environmental assessment study and shall be subject to environmental acceptance by the authorities.

When the occupation of the land lasts more than five years or the land is no longer suitable for the use to which it was previously assigned, the owner of the land may require the holder of the research permit or the mining licence to acquire the land at a mutually agreed upon price. In the event of disagreement on the acquisition price, the price shall be set by the provincial commission referred to in Article 69 of New Mining Code. In the event that no agreement is reached on the price set by the provincial commission, the price shall be set by the competent jurisdiction.

Enforcement regime

Morocco has signed and ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award. This establishes a framework for enforcement of foreign arbitral awards, although the enforcement process is submitted to local law. Moreover, it must be noted that the templates of agreements provided by the ONHYM are submitted to arbitration of the Moroccan Arbitration Chamber (Chambre Marocaine d’Arbitrage) in accordance with its rules of arbitration.

Morocco is a party to bilateral investment treaties with a number of countries, including free trade agreements with the US, European Union and major Arab, African and south-eastern Asian countries.