Mining
Mining
To promote the development, strategically manage and safeguard the rational and sustainable exploration and exploitation of mineral resources in Somaliland in an environmentally responsible manner to benefit the nation’s economic and social development.
Function and Objectives
1. Issue and manage various mineral permits including prospecting, exploration and mining minerals licenses.
2. Oversee and monitor all mining exploration and exploitation operations to ensure adherence to licensing terms and compliance with the Mining Act as well as environmental regulations.
3. Carry out geological investigations and promotional activities to attract investment in the exploration and development of Somaliland’s mineral resources
4. Establish a national geoscience database by collecting, interpreting, preserving and disseminating the information for the development of the country’s mineral resources and for public and private use.
5. Provide effective and reliable analysis and assaying services in support of the mining sector for institutional, public and private use.
6. Promote the development and technical training of Somalilanders in all areas of the mining sector to assume key positions in the industry by gradually replacing expatriate personnel.
Mining Sector Operations
Somaliland is currently witnessing the birth of its mining sector, starting with the inauguration of its first mine. A Beryl Ore mine has been established in the Simodi Hills, which was previously confirmed to hold potentially viable minerals by internationally recognized senior geologists.
The mining sector in Somaliland has been in state of stagnation for an extended period of time, and extraction of minerals has been limited to artisanal mining and similar procurement activities. Fortunately, now it seems the tide has turned in favour of the people of Somaliland;
Ministry of Energy and Minerals (MEOM) lead by Minister H.E, Ahmed Jama Barre on behalf of Somaliland Government, has achieved what has not been by any other minister and has strategically managed to attract international foreign mining companies to come to the country
and develop its mining sector. A massive step for the fledgling industry. African Resource Corporation (ARC), a Chinese firm with its head office in the capital city, Hargeisa has recently started a first phase mining project in the Simodi Hills. MOEM and ARC signed a production sharing agreement based on international standards.
MOEOM and ARC optimistically expect to achieve great success from the project and hope to successfully explore the Simodi Hills, whilst setting a good example for other foreign companies interested in the sector. The mine currently employs 50 local staff and 15-20 Chinese engineers. A positive and welcoming environment has been established on the mining site among the employees, and ARC are working hard in establishing close relationships with the community. MOEM and ARC have also established a very professional standard of work in order to facilitate the progressionof the project. At present MOEM and ARC are engaging the community and through development programs such as inaugurating schools, hospitals and wells for water.
"Types of Mining Licences in Somaliland: Conditions, Application Procedures, and Maximum Processing Time”.
Quarry Permit
Quarry means is the process to extract rocks, sand, gravel, or other minerals from the ground to use them as a construction materials or other uses. Quarry is any such working on the surface of the earth where minerals to extract.
Terms and Conditions
A quarry permit shall be granted to an individual or company
A quarry permit is valid for a period of up to 1 years and can be renewed annually
A quarry permit can be transferred, mortgaged another stakeholder
Holders of quarry permit are required to comply public standards of work safety, protection, rehabilitation of the environment as determined by the Minister
Application letter
Articles of association both English and Somali
Company profile (company Name &address, mission and vision, core values, strategic plan and its background etc.)
Chamber of commerce.
Public notary showing ownership of the company
Identification Cards for Shareholder holding more than 5% of the share capital
Step two
Registration letter from MoEM
Registration letter from the Attorney General
Bank Statement (Min $ 20,000 USD)
Identify type of mineral in respect which the permit sought
The person has competent Technical Expertise’s (CVs)
Geological report of the site
Environmental Impact Assessment
Work plan of the company
Approved letter from Djibouti government.
Fiscal Regime for Quarry Permit
Quarry Permit Application Fees – The permit holder shall pay $ 1,000 USD for Quarry Permit application fee and renewal fees $ 1,000 USD.
5% of Royalty tax
$10 export Tax Per Load.
DEALER LICENCE
Description
A dealership Licence is a document issued by the Department of Minerals which allows you to purchase or sell a mineral (either gemstone or industrial mineral).
Term and conditions
No person is allowed to engage in such business without legal permission.
Dealership Licence is only for local citizens.
Dealership Licence are not transferable.
Dealership Licence is valid for only one year.
Dealership Licence can be renewed for each successive year as long as conditions met.
All Dealer licences should be expired on
e 
year
The Dealer License Should Report to the mineral department in every three months (January, April, July &October)
Step One
Application Letter
Articles of association both English and Somali
Company profile (contains company address, mission and vision, core values, strategic plan and its background etc.)
Identify the qualification of the person responsible for supervising the Dealer program
Chamber of commerce
Public notary showing ownership of the company
Identification cards for shareholders.
Step Two
Registration letter from MoEM
Registration letter from Ministry responsible for the Trade, Attorney General
Bank Statement (Min US$20,000)
Registered office in Somaliland
Step Three
Pay non-refundable Licence fee
Submit completed Form one (Attached here)
Issued the Dealer Licence within 14 days.
Fiscal Regime for Dealership License
Dealership License Application Fees – The license holder shall pay $ 700 USD for Dealership license application fee and renewal fees $ 500.
RECONNAISSANCE LICENSE
Description
Reconnaissance means the operations and works to carry out the non-intrusive search for mineral resources by geophysical surveys, geochemical surveys, photo-geological surveys or other remote sensing techniques and surface geology in connection therewith but excludes drilling and excavations
Term and conditions
The applicant can be any person, national or foreign, with legal capacity, who is able to carry out the operations required by such license
Reconnaissance Licence are not transferable.
The duration of a Reconnaissance Licence shall be valid for up to two years
The mandatory Reporting requirements includes but not limited yearly work-plan, geological reports and geochemical analysis.
Reconnaissance license holder is not allowed to engage in drilling, trenching, excavation or other subsurface techniques
Step one
Application letter
Articles of association in both English and Somali
Company profile (contains company address, mission and vision, core values, strategic plan and its background etc.)
Identify the technical qualification of the person responsible for supervising the reconnaissance Activity
Chamber of commerce
Public notary showing ownership of the company
Identification cards for shareholders.
Step Two
Registration letter from MoEM
Registration letter from the Attorney General office
Bank Statement (Min US$80, 000)
A statement giving particulars of the technical and financial capability including investment plan of the applicant for the Reconnaissance operations CV, employment of agreement and Certificate.
Registered office in Somaliland
Site investigation by geologist from the Mineral department (blocking system)
Work plan of the company (including Environmental protection plan)
A letter from the local elders, approved by the head of the district.
Step Three
Pay non-refundable Licence fee
Submit completed Form one (Attached here)
Issued the Reconnaissance License within 36 days
Fiscal Regime for Reconnaissance License
Reconnaissance License Application Fees – The contractor shall pay 3,000 USD for mining license application fee and renewal fees $3,000.
Surface rent – The license holder shall pay 20 USD per mined square km as a surface rent annually.
Payroll Tax: local people 6%, while Foreigners 10%
Joint Adventure/Transfer Mineral Right: the transfer for mineral right and joint venture for Mining license is $300.
Personal Income Taxes (PIT) and Corporate Income Taxes (CIT): 10%
Goods and Services Tax (GST)): 5%
EXPLORATION LICENCE
Description:
Exploration means the search for Minerals and Deposits by any geological, geochemical, geophysical or related methods including trenching, drilling and sampling.
Terms and Conditions
Exploration licence shall be granted to both local and international companies
The duration of an Exploration Licence is up to three years from the date of issuance.
An Exploration Licence applicant must have the technical and financial capacity to fulfil the licence requirements
Applicants must adhere the relevant environmental obligations and other occupational health and safety standards as defined in the regulation.
Step one
Application letter
Articles of association in both English and Somali
Company profile
Chamber of commerce registration.
Legal certification of ownership (Sign in front of certified public notary)
Identification cards for Shareholder of more than 10 percent (10%)
Step two
Registration letter from the Attorney General office
Bank Statement (Local Min US$ 100,000 joint /foreign Min US$ 150,000)
A statement giving particulars of the technical and financial capability including investment plan of the applicant for the Reconnaissance operations CV, employment of agreement and Certificate.
To provide Geological Reports and Geochemical analysis.
Site investigation by geologist from mineral department
Work plan of the company (including environmental protection plan)
Registered office in Somaliland
A letter from the local elders, approved by the district.
Pay non-refundable License fee
Submit completed from one (Attached here)
Issued the Exploration licence within four Weeks
Fiscal Regime for Exploration License
Exploration Application Fees – The Contractor shall pay 5,000 USD for the Exploration Period.
Surface rent – The Contractor shall pay 25 USD per square km as surface rent for first year and shall pay 50 USD for second year (first renewal year).
Capacity building fund – The Contractor shall pay 5,000 USD for local to the Ministry as capacity building quarterly throughout the Term and 10,000 USD for foreigners.
Joint Venture/Transfer Mineral Right: the transfer for mineral right and joint venture for Exploration license is $2,000.
Personal Income Taxes (PIT) and Corporate Income Taxes (CIT): 10%
Goods and Services Tax (GST)): 5%
Production Sharing: 10%
Payroll Tax: local people 6%, while Foreigners 10%
SMALL-SCALE MINING LICENCE
Small scale mining means the intentional winning of minerals in mechanized operations not exceeding twenty meters in depth or involving the sinking of shafts, driving of adits, or other various underground openings.
Terms and Conditions
- A small-scale mining licence shall be granted to an individual or company
- A Small-scale Mining Licence is valid for a period of up to 5 years and can be renewed
- A Small-scale Mining Licence can be transferred, mortgaged or pledged
- Holders of a Small Mining Licence are required to meet acceptable public standards of work safety, and protection and rehabilitation of the environment as determined by the Minister
- Application letter
- Articles of association both English and Somali
- Company profile (company Name &address, mission and vision, core values, strategic plan and its background etc.)
- Chamber of commerce.
- Public notary showing ownership of the company
- Identification Cards for Shareholder holding more than 5% of the share capital
Step two
- Registration letter from MoEM
- Registration letter from the Attorney General
- Bank Statement (Min US$ 250,000)
- Identify the mineral in respect of which the license is sought
- The person has competent Technical Expertise’s (CVs) and Certificate and Employment of Agreement.
- Detailed technical report (i.e. geological, geophysical and geochemical report)
- Business plan including community engagement initiatives paticipitation
- Work plan of the company
- Environmental Impact Assessment
- Registered office in Somaliland
- A letter from the local elders, approved by the head of the district.
-
Step three
- Pay non-refundable License fee
- Submit completed from one (Attached here)
- Issued the Reconnaissance License within 36 days
-
Fiscal Regime for Small-scale Mining License
- Small-scale mining License Application Fees – The contractor shall pay $ 4,000 USD for Small Scale mining license application fee and renewal fees $ 3,000 USD as applicable.
- Government share of Mineral Value – The Government shall be entitled to 10% of the full market value of the minerals produced. This full market value shall be calculated on an arms-length basis and paid FOB.
- Royalties: The contract shall pay royalties 3-5 % of the mineral produced at Mine Gate or FOB.
- Import taxes – The contractor is exempted from import taxes of mining related equipment for the first two years of Mining operation.
- Corporate taxes – with comply of Applicable Somaliland Investment law, the company is exempted the corporate tax from the first three years.
- Income taxes for expatriate personnel – All taxes are payable as defined by the relevant regulation and laws in Somaliland
- Surface rent – The contract shall pay 100 USD per mined square km as a surface rent annually.
- Capacity building fund – the contractor shall pay 10,000 USD for local and 15,000 USD for foreign to the Ministry as capacity building per quarter.
- Community Development fund: The contractor shall pay a minimum of forty thousand (40,000 USD) or (1% of the profit of the production) whichever is more; for the purpose relating to developing the following but not limited to health care, education and empowering local government as the Mining Operation commenced.
- Payroll Tax: local people 6%, while Foreigners 10%
- Contract Taxes: Sub-sub-contractors; Foreign & Local employee of contactor and its subcontracts are General contractors and Sub-contractors 10%.
- Joint Adventure/Transfer Mineral Right: the transfer for mineral right and joint venture for Mining license is $20,000.
- Personal Income Taxes (PIT) and Corporate Income Taxes (CIT): 10%
- Goods and Services Tax (GST)): 5%.
MINING LICENSE (Large scale mining)
Description
Mining means to undertake all acts necessary to develop and extract Minerals, Construction Materials, Gemstones or Art stones from a deposit for treatment, processing or sale pursuant to a Licence or Permit.
Term and Conditions
Mining License is only grant to a Company with credible technical and financial capacity
Mining License is valid for five years and may be renewed based on the Economic Life of the Mine and the Mineral Resources.
The Mining License Holder Should Report the following
Technical Report,
Financial Report and
Financial statements to the Ministry
The Holder of a valid Exploration License or Retention License has the exclusive right to apply for the grant of a Mining License where all conditions are met.
Step One
Application form
Articles of association both in English and Somali
Company profile (contains company address, mission and vision, core values, strategic plan and its background etc.)
Chamber of commerce
Public notary showing ownership of the company
Identification cards for shareholders.
Step Two
Registration letter from MoEM
Registration letter from Attorney General
Bank Statement (Min US$500,000)
The Company should give full program of proposed Mining Operations including: -
The estimated date by which the applicant intends to work for profit.
The estimated capacity of production and scale of operations.
The estimated overall recovery of ore and mineral products.
The nature of the products.
Proposals for the prevention of pollution, the treatment of wastes, the safeguarding of natural resources, the progressive reclamation and rehabilitation of land disturbed by mining and for the minimization of the effects of mining on surface water and ground water and on adjoining or neighbouring lands.
The residual effects on the environment of the mining operations and proposals for their minimization.
Any risks (whether to health or otherwise) involved in mining the mineral, and proposals for their control or elimination.
A CV and Certificate of Mine Manager responsible for supervising Mining Operations
The Company should submit detailed feasibility study
An Environmental Impact Assessment report conducted by accredited third party and approved by the relevant authority.
A letter from the local elders, approved by the head of the district.
Step Three
Pay non-refundable License fee
Submit completed Form one (Attached here)
The contract between government and company
Issued the Mining License within four weeks.
Fiscal Regime for Mining/Large Scale Mining License
Mining License Application Fees – The contractor shall pay 15,000 USD for mining license application fee and renewal fees $10,000.
Government share of Mineral Value – The Government shall be entitled to 10% of the full market value of the minerals produced. This full market value shall be calculated on an arms-length basis and paid FOB.
Royalties: The contract shall pay royalties 3-5 % of the mineral produced at Mine Gate or FOB.
Income taxes for expatriate personnel – All taxes are payable as defined by the relevant regulation and laws in Somaliland
Surface rent – The contract shall pay 150 USD per mined square km as a surface rent annually.
Capacity building fund – the contractor shall pay 20,000 USD for locals and 25,000 USD for foreign to the Ministry as capacity building per quarter.
Community Development fund: The contractor shall pay a minimum of One Hundred and Twenty thousand (120,000 USD) or (1% of the profit of the production).
Payroll Tax: local people 6%, while Foreigners 10%
Contract Taxes: Sub-sub-contractors; Foreign & Local employee of contactor and its subcontracts are General contractors and Sub-contractors 10%.
Joint Adventure/Transfer Mineral Right: the transfer for mineral right and joint venture for Mining license is $50,000.
Personal Income Taxes (PIT) and Corporate Income Taxes (CIT): 10%
Goods and Services Tax (GST)): 5%
Production Sharing: 10%
Note: Lizence Application Process takes 39 days maximum.
Further information Contact: [email protected]
