Geni & Kebe provide expert advice on West Africa.
MK: Geni & Kebe is one of the largest and oldest law firms in West Africa. In 2012 the company celebrated its 100-year anniversary. Today, Geni & Kebe consists of four barristers, seven legal consultants and seven paralegals, and we provide advice to many mining corporations on cross-border transactions in various African countries. Over the past ten years, mining has become an important industry for Geni & Kebe as we have seen an increase in mining investment coming to Senegal and other African francophone countries.
In terms of your client base in the mining industry, do you mostly work with mining producers, exploration companies or service providers?
MK: Geni & Kebe works across all sectors. We have previously advised companies on acquiring exploration licenses, joint ventures and production. There are specific provisions in the mining code dealing with production, and we can assist companies in working with these provisions.
Could you tell us about the main pieces of legislation that are governing the industry in Senegal?
MK: The mining code has two important objectives: the first is to make Senegal a mining state and increase the level of investment and the second objective is to increase benefits to the state from the mining industry.
The mining code covers exploration tax incentives, environment issues, local communities, and tax and repatriation of profits issues. Recently, the new government issued a policy to strike the right balance between state and investor interests. The mining sector in Senegal thus far has been more profitable for the investors, rather than the Senegalese state and communities. The government and the mining companies are currently discussing how to balance this and what amendments need to be made in the existing contracts. Some companies have agreed to discuss with the government possible amendments in the existing contracts, but others are challenging this decision.
The government is also working on changing the mining code. Mining reform is also ongoing in Cote d’Ivoire and Burkina Faso, which are much more advanced in the process than Senegal, where it is a very early stage of revision. The government understands the importance of the mining industry, but today the contribution of the mining industry to the total GDP is very low in comparison with the potential that is there. In the future, we hope to increase the significance of mining sector to GDP.
Across West Africa, many investors have found serious discrepancies between land rights and mining acts and have called for increasing harmonization in this field. What is the situation in this regard in Senegal?
MK: Discrepancy between land rights and existing mining codes is a frequent problem faced by investors, affecting countries such as Senegal and Cote d’Ivoire. In Senegal there are persistent differences between land rights and the mining act. For example, there is a statue dealing with property land, meaning if an entity or an individual owns property land he has all the rights dealing with the land. However, under Senegalese law, when there is any resource found on any land it belongs to the government, from the date the discovery is made it becomes the property of the state. Thus, conflicts arise between landowners and the government
There is a law that deals with the rural land, and the statue transfers some competencies to the rural council. Conflicts of interest sometimes arise between the rural council and the state, because the state wants to allow the investor to come in, while the Rural Council wants to have this land for its own benefit. It has happened before that the government has issued a mining exploration license without taking into account the interest of the rural council. This is not illegal, but creates issues between two.
There have also been problems regarding environmental regulations. In Senegal, we have separate statues dealing with the environment, with mining and with rural collectivities. So when a company is exploring or exploiting, these three statues are involved in the project.
What main aspects of mining regulation need to be addressed with regional harmonization efforts?
MK: The environmental issue needs to be tackled. The mining sector is often in conflict with the environmental sector and governments tend to give more importance to mining because it brings more financial revenue.
Another issue is taxation and repatriation, which governments are looking to increase. The taxation issue should be reviewed, but it should be increased without thinking about the balance between the investors and the states.
What outlook do you have for the mid-term growth of the mining industry in West Africa?
MK: Mining in West Africa has a bright future. Ten years ago Burkina Faso, Mali and Ghana were the only states that were interested in mining. Today, Cote d’Ivoire, Senegal, Guinea and Mauritania can be added to the list. However, in order to succeed, these countries should not only harmonize their legal, but also their environmental, tax and repatriation policies. If one of these countries wants to have the most attractive mining code in the region, this might lead to downward spiral on tax returns from mining for all the neighboring states and in the end there will be no win for any of these countries. This of course is a challenging process, but if ECOWAS can succeed in agreeing on the same legal rules in many aspects of their economies, they cannot leave out mining sector.
Do you have a final message about Geni & Kebe and your regional presence for our readers at Indaba™?
MK: Geni & Kebe would like to advise both Senegalese and foreign investors on the mining sector because we know that it is becoming a very important industry for the region and we are seeing more investments coming in. Lawyers are at the forefront of all project investments, and play a crucial role in advancing projects. We know the local rules, and we know how to address unique regional problems. We want investors who are coming to West Africa to know that we are here to help them.
This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Second Official Mining in Africa Country Investment Guide, will be launched next February 2015, as the only official publication providing country-specific information at Africa’s top mining event, the 2015 Investing in Africa Mining Indaba™ held in Cape Town, South Africa. You can view the 2014 Official Mining in Africa Country Investment Guide here