Mineral licenses

 Types of Mineral Licenses

 Licensing procedure

 Rights and obligations

 Objectives Custodianship

The objectives of this Proclamation are to: Custodianship of Mineral Resources

1/ give effect to the principle of the 1/ Mineral resources existing in their
custodianship of the country’s mineral natural condition on, in, and under the
resources by the Government; territory of Ethiopia are the property
2/ promote socio-economic growth of the of the Government and all the peoples
country; of Ethiopia.

3/ promote employment and advance the 2/ The Government shall have the duty to
social and economic welfare of all hold mineral resources, on behalf of
Ethiopians; the peoples, and deploy them for the
benefit and development of all
4/ provide for security of tenure for all Ethiopians.
investors in respect of exploration and
3/ The Government, acting through the
mining operations; and
Licensing Authority, shall control and
5/ ensure that the country’s mineral administer mineral resources and
resources are developed in an orderly and grant, refuse and manage licenses
sustainable manner.
 Reservation of Land
1/ any land in Ethiopia shall be available e) within 500 meters from the
for mining operations. boundary of a village, city or water
reservoir or dam without the
2/ Where the Ministry considers it that it consent of the competent body; or
is in the best interests of the country,
it may, by legal notice, reserve any
land from mining operations. f) reserved by any other law of the
country.
3/ No person shall be granted an
4/ A legal notice issued pursuant to sub-
exploration license, a retention
article (2) of this Article, may not
license or a mining license over an
affect land which, on the date of the
area:
notice is subject to a mineral right.
a) reserved for cemeteries and religious
sites; 5/ The Government may, where it is in
b) containing archaeological remains the national interest of the country,
or national monuments; authorize the opening of any
c) reserved for physical infrastructure; reserved area under sub-articles (2)
or (3) of this Article for mining
d) within areas reserved for natural
operations upon providing
habitats or national parks;
appropriate compensatory
arrangements.
 Eligibility for License
1/ A license may be granted to any person who
4/ No License may be granted or held by:
satisfies
 the requirements of the relevant license set a) Any person who is un-rehabilitated
out in this Proclamation, regulations and insolvent/indebt, or
directives
 is under a scheme of
 the applicant is qualified to carry on trade arrangement with creditors;
under the provisions of the relevant law and
 possess or has a confirmed access to b) a business organization which is in
financial resources and technical liquidation,
competence.  other than a liquidation for the
2/ No person is required to possess financial reconstruction of the business
resources, technical and professional organization or
competence in order to acquire artisanal  for its amalgamation with
mining license.
another business organization;
3/ A licensee whose license is revoked due to
c) a non-citizen of Ethiopia or
 fraudulent misrepresentation or
 a group of people who are not
 the presentation of a false statement
registered as a cooperative
 may not be granted another license for five society, where it is for artisanal
years starting from the date of revocation of
the previous license
mining license.
Applications for License Order of Processing of Applications
1/ An application to be submitted to the 1/ Unless the Licensing Authority determines on the
Licensing Authority for the issuance, basis of the economic benefit of the minerals or
renewal or transfer of license and: other appropriate investment objectives:

a) be accompanied by the a) an application submitted for a large scale mining

documentation required by this license shall take precedence over applications for
Proclamation, regulations and small scale and artisanal mining licensees,
directives and  an application for small scale mining license shall
 with the payment of the prescribed take precedence over an application for artisanal
application fee; and mining license;
b) in the case where the applicant is a
b) if the Licensing Authority receives more than one
business organization, be applications for licenses of the same status covering
accompanied with the same mineral and area, the applications shall be
 a documentary proof that it is dealt with in the order of receipt;
registered as a business
 where two or more applicants lodge applications
organization and for licenses of the same status at the same time
 with other relevant legal covering the same mineral and area,
documents.
 the Licensing Authority shall constitute a technical
2/ Where the Licensing Authority is satisfied
team to evaluate the applications and the priority
with the application, shall be determined on the basis of the evaluation
 it shall register and give receipt to the of the technical work plan, the financial proposal,
applicant. and the technical competency of the applicants;
Order of Processing of Applications 1. Mineral Licenses
2/ If two or more applications submitted to The following licenses may be issued under this
 the Ministry and the licensing authority of a Proclamation:
state for licenses covering the same area,
 the Ministry and the concerned state licensing 1/ a reconnaissance licence;
authority shall appoint a joint technical team
to evaluate the applications and 2/ an exploration licence;
 the priority shall be determined on the basis
of the evaluation of the technical work plan, 3/ a retention licence;
the financial proposal, and the technical
competency of the applicants. 4/ artisanal mining license;
3/ A woman applicant, if any, shall have priority
provided that the results of the evaluation 5/ small scale mining licence;
conducted pursuant to sub-article (1) or (2) of
this Article are equal. 6/ large scale mining licence and
4/ Notwithstanding with the provisions of sub-
articles (1), (2) and (3) of this Article, the 7/ Special small scale mining licence
Licensing Authority may, where it deems
appropriate, disregard the applications and
opt for bidding for the area in question.
 Reconnaissance license Exploration License
1. Granting Reconnaissance license 2. Granting Exploration License
Reconnaissance refers to an 1/ an exclusive Exploration License is grant
undertaking of general search for where:
any minerals and a) the applicant has access to the financial
resources and the technical ability to
 a non exclusive license for such conduct the proposed exploration
operation is granted when the work operation in accordance with the work
does not constitute of any program;
geological activity that result in b) the estimated exploration expenditure is in
disturbance of the surface of the accordance with the prescribed minimum
earth. exploration expenditure and the
exploration work program;
Duration of Reconnaissance License
c) the environmental impact plan is
1/ A reconnaissance license shall be approved; and
valid for the period specified in
d) the applicant is not in breach of any
the license; provided however,
obligation of his reconnaissance license, if
that such period shall not exceed
any.
18 months.
2/ A reconnaissance license shall not
be renewable
 Exploration License
Duration of Exploration License and Renewal Rights and Obligations of the Holder of an
Exploration License
1/ an exploration license shall be valid for an
initial period specified in the license; 1/ the holder of an exploration license shall
provided however, that such period shall not have the rights to:
exceed three years.
a) apply for and be granted a retention
2/ an exploration license may be renewed twice license;
for a period not exceeding one year each.
b) apply for and be granted a mining
The Licensing Authority may further allow license;
extension of renewal to be made on each c) remove and transport minerals or bulk
year Provided that such period shall not samples found during the course of
exceed five years. exploration
3/ The licensee shall have the right to renew the
2/ the holder of an exploration license shall
license provided he has
have the obligations to:
 Fulfilled the obligations specified in the
license, d) commence with exploration activities
within 60 days from the date on which the
 meets all the requirements for application
exploration license becomes effective;
and
 is not in breach of any provision of this b) comply with the terms and conditions of
Proclamation, regulations or directives which the license;
constitute grounds for suspension or c) keep duplicates of samples removed and
revocation of the license transported for tests or any other analysis.
 Exploration License
Variation of Work Program Relinquishment of Portion of License
1/ The holder of an exploration license may at Area
any time apply to vary the approved work
program.
1/ In applying for each renewal of an
exploration license,
2/ Any application for variation shall:
 the licensee shall indicate the
a) demonstrate the events that prevent portion of the license area, to be
the licensee from carrying out the relinquished
approved work program; and
 this shall not be less than one
b) be accompanied with the intended
amendments of the work program. fourth of the license area.

3/ The Licensing Authority shall, after 2/ The form, orientation and other
examining the application for variation: details regarding relinquishment shall
be specified by directives.
a) approve the variation if it finds it
acceptable; or

b) if it rejects the application, it shall

notify, in writing, the applicant the
reasons for refusal.
 Retention License
3. Granting Retention License Duration and Renewal of Retention License
1/ The Licensing Authority shall grant an 1/ A Retention License shall be valid for the period
exclusive retention license to the applicant specified in the License, however, that such period
where: shall not exceed three years.
a) the applicant has demonstrated the 2/ The retention license may be renewed once for a
discovery of a mineral deposit within the period not exceeding three years
exploration area which is potentially of
commercial significance; and Rights and Obligations of the Holder of Retention
b) the mineral deposit cannot be developed License
immediately because of adverse market 1/ The holder shall have the right to be granted a
conditions, other economic factors, or mining license, in respect of the retention area
unavailable processing technologies, and mineral in question prior to expiry of the
which are of a temporary character. license.
2/ The holder shall submit an annual progress report
2/ The Licensing Authority may refuse to grant
to the Licensing Authority indicating:
a retention license if it is established that:
a) the prevailing market conditions and
a) the required processing technology is
available and the mineral deposit can be 
 technical factors, the effect thereof and
mined profitably;  the need to hold such retention license
b) it may prevent fair competition; or over the mineral and land in question; and
c) it may result in the concentration of b) efforts undertaken by it to ensure that mining
mineral resources in the hands of the operations commence before expiry of the
applicant. duration of the license
 Large Scale Mining
4. Granting Large Scale Mining License Duration of Large scale Mining License and
Renewal
1/ The Licensing Authority shall grant an
exclusive mining license to an applicant 1/ A large scale mining license shall be valid
where: for the period specified in the license;
provided however, that such period shall
a) the proposed work program is
not exceed 20 years.
approved;
b) the applicant has access to financial 2/ A large scale mining license may be
resources and technical ability renewed for a period not exceeding 10
years each subject to sub-article (3) of this
 to conduct the proposed mining Article.
operations optimally and in a safe
manner; 3/ The licensee shall have the right to renew
a) the environmental impact assessment the license provided that he
has been approved; and  can demonstrate the continued
economic viability of mining the
d) the applicant is not in contravention of deposit,
any obligations of the exploration
 has fulfilled the obligations specified in
license, if any.
the license, and
2/ If the Licensing Authority refuses to grant a  is not in breach of any provision of this
mining license, it shall notify, in writing, the Proclamation, regulations or directives
applicant of the decision and the reasons for which constitute grounds for suspension
refusal or revocation of the license.
Small Scale Mining
5. Granting Small Scale Mining License Duration of Small scale Mining License and
1/ The Licensing Authority shall grant an Renewal
exclusive small scale mining license to an 1/ A small scale mining license shall be valid
applicant where: for the period specified in the license;
a) the proposed work program is provided however, that such period shall
approved; not exceed 10 years

b) the applicant has access to financial 2/ A small scale mining license may be
resources and technical ability to renewed for a period not exceeding five
conduct the proposed mining years each subject to sub-article (3) of this
operations optimally and in a safe Article.
manner; 3/ The licensee shall have the right to renew
c) the environmental impact assessment the license provided that he
has been approved; and  can demonstrate the continued
d) the applicant is not in contravention of economic viability of mining the deposit,
any obligations of the exploration  has fulfilled the obligations specified in
license, if any. the license, and
2/ If the Licensing Authority refuses to grant a  is not in breach of any provision of this
mining license, it shall notify, in writing, Proclamation, regulations or directives
the applicant of the decision and the which constitute grounds for suspension
reasons for refusal. or revocation of the license.
 Large &SS mining
Rights and Obligations of Holders of Small Variation of Work Program
and Large Scale Mining Licenses
1/ The holder of a small scale or large scale
1/ The holder of a small scale or large scale mining license may at any time apply to
mining license shall have vary the approved work program.

the rights to market and sell minerals 2/ Any application for variation shall:
produced. a) demonstrate the events that prevent
the licensee from carrying out the
2/ The holder of a small scale or large scale approved work program; and
mining license shall: b) be accompanied with the intended
a) commence mining operations within amendments of the work program.
one year from the date on which the 3/ The Licensing Authority shall, after
license becomes effective; and examining the application for variation:
a) approve the variation if it finds
b) comply with the terms and conditions acceptable; or
of the license.
b) if it rejects the application, it shall
notify, in writing, the applicant the
reasons for refusal.
 Artisanal Mining
6. Artisanal Mining License
6/ The Licensing Authority shall give
1/ The Licensing Authority shall grant an
preferential treatment
exclusive artisanal mining license where the
applicant is eligible for such license.  to the licensee where the latter shows
that he has the necessary technical and
2/ The holder of an artisanal mining license shall:
financial resources
a) be obliged to undertake the mining  to engage in the advanced exploration
operations in accordance with the environment, and mining as prescribed by the
health and safety standards; Licensing Authority.
b) comply with the terms and obligations of 7/ Where preferential treatment is not
the license.
accorded to the licensee,
3/ An artisanal mining license shall be valid for
the period specified in the license; provided  the Licensing Authority shall at the
however, that such period shall not exceed option of the licensee grant him another
three years. area of mining operation or
4/ The license may be renewed twice for three  determine the amount of compensation
years each. which shall be paid to the licensee
5/ The License can be revoked where it is • for the loss incurred due to the
considered that
revocation of the license.
 the deposit requires more advanced
exploration and mining method • Such compensation shall be paid to
 for the best development of its economic the licensee promptly.
potential.
 Special SS mining
7. Special SS mining license Granting Special Small Scale Mining License
 The Licensing Authority shall grant an
special small scale mining' is exclusive special small scale mining license
where:
 mining operation of gemstones or a) the proposed work program is
placer resources of gold. silver, approved;
platinum or tantalum of which the b) the applicant proves that he has
annual run-of-mine does not exceed the financial capacity to conduct the
limit of small scale mining, proposed mining operation;
c) the environmental impact assessment
 It is carried out by individuals or small has been approved; and
and micro-enterprises who were d) the applicant was holder of artisanal
mining license that engage in the
 the holders of artisanal mining mining of gemstones or placer gold.
license and silver, platinum or tantalum and
e) is not in contravention/ violation of
 have sufficient financial capacity any obligations related to it.
to employ modern machineries Special small scale mining license shall be
valid for the not exceed 10 years.
and equipment in such operation.
The license may be renewed for a period
not exceeding five years each
 Large &SS mining
Small-scale and large scale mining operations are Unlike the other types of license, small-

scale and large-scale mining license
Both mining operations relatively require
advanced technical ability and better financial – renewed without any limitation on the
resources
frequency of renewal.
While reconnaissance and exploration licenses are
granted for activities aimed at searching for – This give investors of the right to
minerals,
• continue their mining operations
artisanal, small-scale and large-scale mining
licenses are granted for without any limit.

 activities directed at extracting already – Such rights are important to promote

discovered mineral deposits.
mining investment by
Hence, a holder of a reconnaissance or an – guaranteeing to investors unlimited
exploration license, period of operation
– the investments may not be
 if he is successful in the discovery of minerals,
discontinued without good cause.

 should apply to get either an artisanal, small-

– Such security of mineral tenure is
scale or large-scale mining license as the case
may be. important

• to boost the confidence of investors

• help the country to be a favorable
 Mineral Licenses
Mineral rights may be suspended when The notice should specify the grounds for
considering
– it is believed that the activity of the licensee is to likely cause
danger to – suspension or revocation, or direct the
licensee to take measures to remedy any
 the local community, the environment and employees of contravention or breach and
the licensee

 with the condition that suspension is the only remedy

– the date the licensee is willing to submit
available under the prevailing circumstances. any matter in writing that may prevent
suspension or revocation.
Licenses may also be revoked due to grounds mentioned
under Article 44(2) of the Mining Proclamation. Any person whose application for
 fails to comply with the financial obligations
– exploration or exploitation has been
 conducts mining operations in a grossly negligent or rejected or
intentionally improper manner;
– any licensee whose license has been
 breaches any material term or condition of his suspended or revoked can appeal
License;
 is not conducting his mining operations in
• to officials of the Licensing Authority in
accordance with the work program
order of their hierarchy.
 is in breach of the approved environmental impact
assessment, and safety and health standards etc
• However, the Licensing Authority has The person upset by the decision of the
Authority may also apply
– the duty to give notice in writing before taking action
on suspension or revocation of licenses. – to the competent court provided that
all administrative remedies are
exhausted.
Licensing Procedure
• An application must be submitted • If the parties fail to resolve the
application to the Licensing Authority
objection,
(LA). 
– the LA hears the presentations
• Where the latter is satisfied with the of both parties and
application,
– it registers the application and gives a – decides on the upholding or
receipt to the applicant.  rejection of the objection within
fifteen (15) working days.
• after registering the application, the LA
publishes it to third parties through • If no objection to the application has
widely accessible mass media: been filed at its office, the LA,
– following verification of all
• If a person objects to the granting of the
information submitted in
license within seven (7) days as from the
connection with the application,
date of publicity,
and
• the LA initiates negotiations between the – upon payment of the fees and
parties concerned in order to resolve the rentals,
objection. 
– The LA grants the license to the
applicant
 Ownership Requirements and Restrictions

Licenses Transfer
• Reconnaissance operations may only • in order to transfer a LSM license,
be conducted by Ethiopians who have the prior consent of the LA is
a license required.
• foreigners are not permitted to
• the application to transfer or assign
conduct reconnaissance operations at
a LSM license must include specific
all. 
information and documents listed
• Further, only Ethiopian nationals can under article 40 as, for example,
apply for, and obtain, artisanal mining
– the nature, nationality, legal
licenses
form, and capital of the
proposed transferee, etc. 

– Other than that, there is no

change of restriction control
applicable under the mining
laws.
Ownership Requirements and Restrictions

• the government may acquire a free • there is no restriction on the type of

participation interest of 5% of any legal entity that may hold rights in
large-scale or small-scale mining the mining sector. 
investment. 
• mining activities may be carried out
• An additional equity participation of by a legal entity in the form of
the government may also be
provided by agreement.   a sole ownership,

• The latter will specify

 partnership or
• the percentage, the timing, the  company (whether share or
financing, the resulting rights and private limited company)
obligation, and any other details
of the government participation.