A law of June 26, 2024, on mining and quarry operations is in effect after its promulgation in the official gazette on July 24. It introduced changes including tougher penalties which are intended for offense or fault deterrence, according to the government.
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Here are five major things you should know about the 2024 law:
1. Government exclusive rights on strategic minerals
The competent organ may designate certain strategic minerals for which the Government exercises exclusive rights in the public interest.
The law of 2018 provided that a holder of a mineral licence enjoys exclusive mineral rights covered by his or her licence.
For quarries, similar to the 2018 law, the competent authority may designate certain quarries for exclusive exploitation by the Government for the purposes of carrying out projects in the public interest.
2. New requirement on transfer of a mining licence
A mining licence holder has the right to transfer the licence through assigning all or part of his or her shares.
While this is the same as the previous law, the new one introduced a provision specifying that the licence holder cannot transfer the licence through assigning all or part of his or her shares before totalling investment cost of at least 30 per cent of investment commitment he or she pledged by the time of the grant of licence.
Upon registration of the mining licence in the name of the new holder following a transfer, the rights, responsibilities and other obligations of the transferor immediately pass to the transferee.
3. Registration of land to the State
The 2024 law, like that of 2018, stipulates that a landowner or any other lawful occupier has full rights on that land in accordance with the law governing land.
In case there is a discovery of mineral deposit on any land, before the licence holder commences the mining operations, he or she provides the land owner or a lawful occupier with fair compensation.
The 2024 law brought about a new provision stipulating that when a licence holder provides the land owner with fair compensation, the acquired land is registered to the State [government].
In case the land is subject to an exploration or quarry operations licence, its holder concludes a written lease contract with the land owner or a lawful occupier. When mineral exploration or quarry operations are completed, the land is handed back to the owner, it adds.
4. Government may get free shares in a mining or quarry operations
Similar to the provision of the previous law, the new law stipulates that the Government may acquire on such terms as agreed upon between the holder of a licence and the Government, shares in mining or quarry operations.
The new law came up with a new provision stating that the grant of a mining licence may entitle the government with free carried interest [holding shares in a company or entity without contributing financially for them].
It specified that an order of the minister in charge of government investment determines the number and modalities for issuance of free carried interest.
5. Offences and penalties relating to mining operations
For both individuals and legal entities, penalties for offences range from a minimum Rwf25 million to Rwf150 million alongside possible imprisonment terms ranging from two months to 10 years for individuals, and dissolution of legal entities (such as companies or cooperatives), depending on the implicated offences.
These penalties are far tougher than those in the law of 2018 which provided that any person who undertakes mineral exploration, exploitation, processing or trading without a licence, commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than two months and not more than six months and a fine of not less than Rwf1 million and not more than Rwf5 million, or only one of these penalties.
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Some of the specific offences and penalties in the law:
Allowing mining activity on land without permission
A person who allows mining activity on his or her land to a person without a license commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than one year but not more than two years and a fine of not less than Rwf25 million but not more than Rwf50 million or one of these penalties.
When the offence is committed by a company, a cooperative, a subsidiary, a partnership or any other legal person, upon conviction, they are liable to a fine of not less than Rwf60 million but not more than Rwf80 million.
Undertaking mining operations without a licence
A person who undertakes mineral operations without a licence, commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than two years but not more than five years and a fine of not less than Rwf25 million but not more than Rwf50 million or one of these penalties.
When the offence is committed by a company, a cooperative, a subsidiary, a partnership or any other legal person, upon conviction, they are liable to a fine of not less than Rwf60 million but not more than Rwf80 million.
Possessing illegally extracted minerals
A person who possesses illegally extracted minerals commits an offence. Upon conviction, he or she is liable to imprisonment for a term of not less than 1 year but not more than three years and a fine of not less than Rwf30 million but not more than Rwf60 million or one of these penalties.
Trading in illegally extracted minerals
A person who trades in illegally extracted minerals commits an offence. Upon conviction, he or she is liable to imprisonment for a term of more than five years but not more than 10 years and a fine of not less than Rwf60 million but not more than Rwf120 million or one of these penalties.
When the offence is committed by a company, a cooperative, a subsidiary, a partnership or any other legal person, upon conviction, they are liable to a fine of not less than Rwf130 million but not more than Rwf150 million.