PROCLAMATION NO. 68/1995 A PROCLAMATION TO PROMOTE THE DEVELOPMENT
OF MINERAL RESOURCES....................................................................................................................1

PART I GENERAL.....................................................................................................................................1
1.
2.
3.

Short Title ....................................................................................................................................1
Definitions ...................................................................................................................................1
Scope of Application ...................................................................................................................3

PART II MINING RIGHTS.......................................................................................................................3
CHAPTER 1 GENERAL ..................................................................................................................................3
4.
Requirements of mining Rights ...................................................................................................3
5.
Eligibility for mining Rights........................................................................................................3
6.
Reserved and Excluded Areas and Minerals ...............................................................................4
7.
Government Mining Operations ..................................................................................................4
CHAPTER 2 PRE-DEVELOPMENT RIGHTS ..................................................................................................4
SECTION 1 PROSPECTING AND EXPLORATION ..............................................................................................4
8.
Prospecting License .....................................................................................................................4
9.
Exploration License .....................................................................................................................410.
Duration And Renewal...............................................................................................................5
11.
Relinquishment of Portion of License area................................................................................5
SECTION 2 DISCOVERY ..................................................................................................................................7
12.
Notification of Discoveries ........................................................................................................7
13.
Discovery system .......................................................................................................................7
CHAPTER 3 DEVELOPMENT RIGHTS ...........................................................................................................7
SECTION 1 ARTISANAL MINING.....................................................................................................................7
14.
Artisanal Mining License...........................................................................................................715.
Duration and Renewal................................................................................................................8
SECTION 2 MINING ........................................................................................................................................816.
Mining License ..........................................................................................................................817.
Duration and Renewal................................................................................................................9SECTION 3 MINERAL WATER, GEOTHERMAL DEPOSITS AND CONSTRUCTION MINERALS ...........................918.
Mineral Water and Geothermal Deposits ..................................................................................919.
Construction Minerals................................................................................................................9CHAPTER 4 RIGHTS AND OBLIGATIONS OF LICENSEE ............................................................................10
20.
Possession and Use of Land.....................................................................................................1021.
Use of Construction Minerals, Water and Timber...................................................................10
22.
Other Occupants.......................................................................................................................1123.
Infrastructure and Other Construction .....................................................................................1124.
Conduct of Mining operations .................................................................................................1225.
Employment, Training and Local Supply ................................................................................13
26.
Delimitation of Areas...............................................................................................................13
27.
Books, Records and Reports ....................................................................................................13
CHAPTER 5 COMMON PROVISIONS FOR LICENSES..................................................................................14

28.
29.
30.
31.
32.
33.

Applications .............................................................................................................................14
Surrender..................................................................................................................................14
Boundaries ...............................................................................................................................14
Granting Licenses ....................................................................................................................14
Title to Sale and Export of Minerals........................................................................................14
Liability on Surrender ..............................................................................................................15

PART III FINANCIAL REGIME ...........................................................................................................15
34.
35.
36.
37.
38.
39.
40.
41.
42.

Royalty .....................................................................................................................................15
Taxes ........................................................................................................................................15
Fees ..........................................................................................................................................15
Rentals......................................................................................................................................15
Customs Duties and Taxes.......................................................................................................16
Exchange Control.....................................................................................................................16
Other Incentives .......................................................................................................................17
Participation .............................................................................................................................17
Guarantee .................................................................................................................................17

PART IV ADMINISTRATION ...............................................................................................................18
43.
44.
45.
46.
47.
48.
49.
50.

Responsibility of the Licensing Authority...............................................................................18
Inspection of Mining Operations .............................................................................................18
Registration and Representation of Licensees .........................................................................19
Registration of Licenses & Leases..........................................................................................19
Confidentiality .........................................................................................................................19
Settlement of Disputes .............................................................................................................20
Termination of Mining Rights .................................................................................................20
Infractions and Sanctions .........................................................................................................21

PART V MISCELLANEOUS ..................................................................................................................21
51.
52.
53.

Existing Mining Right..............................................................................................................21
Inapplicable Laws ....................................................................................................................22
Effective Date ..........................................................................................................................22

PROCLAMATION NO.69/1995 PROCLAMATION TO PROVIDE FOR PAYMENT OF TAX ON
INCOME FROM MINING OPERATIONS ..........................................................................................23
1.
2.
3.
4.
5.
6.
7.

Short Title ..................................................................................................................................23
Definitions .................................................................................................................................23
Tax .............................................................................................................................................24
Determination of Taxable Income .............................................................................................24
Determination of Gross Income.................................................................................................24
Determination of Costs ..............................................................................................................24
Revenue Expenditure.................................................................................................................25

8.
9.
10.
11.
12.
13.
14.
15.
16.

Depreciation...............................................................................................................................25
Reinvestment Deduction............................................................................................................25
Permitted Losses ......................................................................................................................26
Transfer of Interest...................................................................................................................26
Dividend Tax............................................................................................................................26
Taxes on Services, Leases and Licenses..................................................................................26
Application of other Laws .......................................................................................................27
Power to Issue Directives.........................................................................................................27
Effective Date ..........................................................................................................................27

LEGAL NOTICE NO.19/1995 REGULATIONS ON MINING OPERATIONS ...............................28

PART I GENERAL...................................................................................................................................28
1.
2.

Short Title ..................................................................................................................................28
Definitions .................................................................................................................................28

PART II LICENSES RELATING TO MINING OPERATIONS .......................................................28
CHAPTER I APPLICATIONS FOR LICENSES ...............................................................................................28
3.
Application For a Prospecting License......................................................................................28
4.
Application for an Exploration License.....................................................................................29
5.
Application for Mining License.................................................................................................29
6.
Fees to accompany applications for Licenses............................................................................30
CHAPTER II ISSUING OF LICENSE .............................................................................................................31
7.
Registration, Notice and Verification of Applications ..............................................................31
8.
Lodging of Objections ...............................................................................................................31
9.
Grant and Registration of License .............................................................................................31
10.
Rejection of License ................................................................................................................32
11.
Shape of Licenses and Discovery Certificate Areas ...............................................................32
12.
Size of License and Discovery Certificate areas......................................................................33
13.
Excluded Areas ........................................................................................................................33
14.
Replacement and Issuance of Copies of Licenses ...................................................................33
CHAPTER III RENEWAL, TRANSFER AND REVOCATION OF LICENSES ..................................................34
15.
Renewal of an Exploration License .........................................................................................34
16.
Renewal of a Mining License ..................................................................................................34
17.
Renewal of an Artisanal Mining License.................................................................................35
18.
Transfer., Assignment, Encumbrance and Inheritance ............................................................35
19.
Revocation and Suspension .....................................................................................................37
PART III DISCOVERY ..........................................................................................................................37
20.
21.
22.

Notice of Discovery .................................................................................................................37
Verification and certification ...................................................................................................37
Rights and Obligations of a Holder of a Discovery Certificate ...............................................38

PART IV RIGHT AND OBLIGATIONS OF LICENSEES .................................................................38
CHAPTER I RIGHTS ....................................................................................................................................38
23.
Infrastructure and Other Construction .....................................................................................38
24.
Disposal of Minerals obtained During Prospecting and Exploration ......................................39
25.
Aerial Photographs and Data ...................................................................................................40
CHAPTER II OBLIGATIONS ........................................................................................................................40
26.
Delimitation of Boundaries......................................................................................................40
27.
Work Programmes and Expenditure ........................................................................................41
28.
Development and Production Programmes..............................................................................41
29.
Employment and Training........................................................................................................42
30.
Health, Safety end Environmental Protection..........................................................................42
31.
Books, Records and Reports ....................................................................................................43
32.
Presentation of License ............................................................................................................44
PART V FEES, RENTALS, ROYALTIES AND OTHER PAYMENTS ...........................................44
33.
34.
35.
36.
37.

License Fees.............................................................................................................................44
Rentals......................................................................................................................................45
Royalty .....................................................................................................................................45
Other Payments ........................................................................................................................46
Penalties ...................................................................................................................................46

PART VI INFRACTIONS AND SANCTIONS......................................................................................46
38.
39.
40.
41.

Primary Infractions...................................................................................................................46
Secondary Infractions ..............................................................................................................47
Administration Infractions .......................................................................................................47
Sanctions ..................................................................................................................................47

PART VII MISCELLANEOUS...............................................................................................................48
42.
43.
44.
45.
46.
47.

Forms to Be Used.....................................................................................................................48
Dispute Settlement Procedures ................................................................................................48
Reduction or Extension of Time ..............................................................................................49
Government Assistance to Licensees.......................................................................................50
Powers and Duties of the Controller........................................................................................50
Effective Date ..........................................................................................................................50

PROCLAMATION NO. 68/1995
A PROCLAMATION TO PROMOTE THE
DEVELOPMENT OF MINERAL RESOURCES
WHEREAS, all mineral resources are public property which can make a significant
contribution to the economic development of the country and that the state shallensure the conservation and development of the resources for the benefit of thepeople;WHEREAS, prospecting, exploration and exploitation of mineral resources should be
carried out in accordance with appropriate technology and sound principles ofresource management and to develop national expertise in the mining industry;
WHEREAS, recognizing the significant role of private investment in the capitalformation, technology acquisition and marketing of minerals; andWHEREAS, to achieve these ends it is essential to promulgate a new law on mining
operations;
NOW, THEREFORE it is hereby proclaimed as follows:

PART I
GENERAL
1.

SHORT TITLE
This proclamation may be cited as the “Mining Proclamation No. 68/1995”

2.

DEFINITIONSIn this Proclamation unless the context provides otherwise:
1.

“agreement” means a contract between the Government and a licensee inorder to prospect, explore and/or mine for minerals;

2.

“artisanal mining” means, unless otherwise specified by directive issued by
the Minister, non-mechanized mining operations of, an essentially manual
nature carried out by Eritrean individuals or groups of such persons;

3.

“construction
minerals”
means sand, gravel, stone (marble, granite,basalt etc) clay, including non-metallic minerals used for construction
1

purposes and such other minerals as the Minister may, by directive so
designate;4.

“controller” means an officer authorized by the Licensing Authority to control
Mining Operations;5.

“deposit” means any natural concentration of minerals found on or within a
specified area of the earth's crust;6.

“to explore” means to undertake all acts to search for, appraise and evaluate adeposit, by using different methods of studies (geological, geochemical andgeophysical) relating to surface and subsurface geology and structure,
excavation, boring and drilling, analysis of the physical and chemical
properties of minerals and examination of the economic feasibility ofdeveloping and exploiting a deposit;

7.

“Government” means the Government of Eritrea;

8.

“License” means a license issued pursuant to this Proclamation to prospectand explore or mine for minerals;

9.

“license area” means any area which is the subject of a license;10.

“licensing Authority” means the Ministry of Energy, Mines and Water
Resources;11.

“to mine” means to undertake all acts to develop, extract and remove minerals
from a deposit, including their storage, treatment, processing (excluding
smelting and refining),transportation and/or disposal;

12.

“mineral water” means water containing minerals with healthful properties
and water such as brines from which minerals may be extracted on an
economic basis;

13.

“minerals” means any naturally occurring mineral substance of potential
economic value forming part of or found on or within the earth's crust,
including salt, mineral water and geothermal deposits, but excluding
petroleum, natural gas and oil shale as defined in Articles 5 and 7 ofProclamation No. 40/1993;

14.

“Minister” and “Ministry” means the Minister and the Ministry of Energy,
Mines and Water Resources;15.

“mining operations” means all acts carried out to prospect, explore and minefor minerals;

16.

“person” means any natural or legal person;

2

3.

17.

“precious minerals” means precious metals such as platinum, gold and silver
and precious stones such as diamonds, rubies, emeralds and sapphires andsuch other minerals as the Minister may, by directive so designate;18.

“to prospect” means to undertake on or above the surface of the earth all acts
to search for mineral occurrences in order to ascertain the possible presence ofminerals including the geological and structural characteristics of the land;

19.

“Regulations” means the Mining Regulations No.19/1995.

SCOPE OF APPLICATIONThis Proclamation shall apply to and govern the conduct of all mining operations andrelated activities within the territory of Eritrea.

PART II
MINING RIGHTS
CHAPTER 1
GENERAL
4.

5.

REQUIREMENTS OF MINING RIGHTS
1.

Without prejudice, to Article 21(1) and 22 of this proclamation and subject to
sub-article 2 of this Article, no person may prospect, explore or mine unless heis the holder of a granted license.

2.

Any Eritrean may prospect without a license provided the land is not the
subject of an existing license or application thereof.

ELIGIBILITY FOR MINING RIGHTS
1.

Without prejudice to sub-article 2 of this Article, any person, who satisfies therequirements of license set out in this Proclamation, Regulations, andDirectives to be issued under this proclamation may acquire a license provided
that he possesses the required financial resources, technical competence,
professional skill and experience necessary to fulfil the obligations under the
license.

2.

No person is required to possess financial resources, technical competence,
professional skill and experience in order to acquire an artisanal mining
license.

3

3.

6.

No person whose license has been revoked except as provided for under
Article 16(2) of this Proclamation may hold another license for 5 years
following such revocation.

RESERVED AND EXCLUDED AREAS AND MINERALSThe Government may designate any area or mineral as reserved or excluded forparticular mining operations and exclude any area from mining operations particularly
as it regards sites of historical, cultural or religious interest and public buildings,
infrastructure and other installations.

7.

GOVERNMENT MINING OPERATIONSThe Government may undertake some mining operations that are vital for overall
economic growth either by itself or in partnership with private investors.

CHAPTER 2
PRE-DEVELOPMENT RIGHTSSECTION 1
PROSPECTING AND EXPLORATION
8.

9.

PROSPECTING LICENSE
1.

A prospecting license grants an exclusive right to prospect for the minerals
within the license area. Prospecting license may not be transferred, assigned,
encumbered or inherited.

2.

A prospecting license is valid for a period of one year and may not be renewed.

3.

Upon his discovery of indications of minerals within the license area, thelicensee shall have the right to be granted an exploration license, provided that,a.

he has fulfilled all obligations under the prospecting license;b.

meets all requirements in connection with the application for an
exploration license; andc.

he is not in breach of any provisions of this Proclamation, Regulations
or directives issued hereunder which constitute grounds for suspension
or revocation of the prospecting license.

EXPLORATION LICENSE

4

10.

11.

1.

An exploration license grants an exclusive right to explore for all minerals
within the area specified in the license other than construction material,
mineral water and geothermal deposits.

2.

The license area shall, unless the Licensing Authority specifies otherwise, beof rectangular shape as specified in the regulations.

3.

An exploration license, and the licensee's right to obtain a license pursuant to
Article 10 sub-article 3 of this Proclamation may be transferred or assignedwith the prior approval of the licensing Authority if it is satisfied that theincoming party has the financial and technical resources to meet the
obligations of the license.

DURATION AND RENEWAL
1.

An exploration license is valid for an initial period of three years and may berenewed twice for additional terms of one year each. The Licensing Authority
may further allow extension of renewal periods where the licensee documents
the necessity for additional advanced exploration activity or provides
information on other circumstances which justify an extension of the durationof the license.

2.

The licensee shall have the right to renew the license, provided he has fulfilled
the obligations specified in the license, meets all requirements in connection
with the application for the renewal and is not in breach of any provision ofthis Proclamation which constitutes grounds for suspension or revocation of
the license.

3.

The licensee shall have the right to be granted a mining license in the eventthat he determines a mineral deposit within the license area which may bemined on an economically viable basis, provided that, he:a)

has fulfilled all obligations under the exploration license;b)

meets all requirements in connection with the application for such amining license; andc)is not in breach of any provisions of this Proclamation, Regulation or
directives issued hereunder which would constitute grounds for
suspension or revocation of the exploration license.

RELINQUISHMENT OF PORTION OF LICENSE AREA
1.

In applying for each renewal of an exploration license, the licensee shallindicate the portion of the license area, to be relinquished, which shall not beless than one quarter of the original license area unless the minimum size
specified in the Regulations has been reached.

5

2.

The form, orientation and other details regarding relinquishments shall be
specified in the Regulations.

6

SECTION 2
DISCOVERY12.

NOTIFICATION OF DISCOVERIES
Any person who discovers indications or existence of minerals shall immediately
notify the controller in writing the location and nature of such discovery as required by
Article 20 of the Regulations.

13.

DISCOVERY SYSTEM
1.

Any person who, while prospecting on land that is not the subject of a license
or of an application for a license, discovers indications of minerals or a depositof minerals which had not been previously discovered, shall immediately markthe location of the discovery, and within 7 days notify the Controller about thediscovery.

2.

If the discovery is proven to the satisfaction of the Licensing Authority, thenthe discoverer shall have a preferential right to obtain an exploration license inrespect of an area specified in the regulations with the discovery mark being at
the point where two diagonal lines drawn from opposite corners of the license
would intersect. The period during which such an application can be madeshall be specified in a discovery certificate issued by the Licensing Authority
and shall not exceed 12 months from the notification of the discovery.

3.

Upon receipt of advice of a discovery, the Controller shall indicate on plans
held at the Licensing Authority's office the extent of the discovery area whichshall not include any ground already held under license or the subject of a priorlicense application.

4.

The fees and expenditure obligations for an exploration license obtained as aresult of an application by the holder of a discovery certificate shall be as
specified in the Regulations.

CHAPTER 3
DEVELOPMENT RIGHTSSECTION 1
ARTISANAL MINING
14.

ARTISANAL MINING LICENSE
1.

An artisanal mining license may be granted in respect to part of the surface
area of an existing exploration license provided that:7

15.

a)

the artisanal mining license is restricted to construction minerals to adepth of five metres and/or mineral water and geothermal deposits.

b)

the Licensing Authority is satisfied that the activities of the artisanalminer will not interfere with the operations of the existing license.

2

An artisanal mining license may be granted for minerals other thanconstruction minerals, mineral water and geothermal deposits if the land inquestion is not the subject of any existing license or prior license application
provided that mining in the artisanal license is restricted to a depth of 5 metres.

3.

An artisanal mining license may be transferred, assigned, encumbered or
inherited subject to the approval of the Licensing Authority.

DURATION AND RENEWAL
1.

An artisanal mining license shall be valid for one year and may be renewed
indefinitely for like periods.

2.

The Licensing Authority may, after giving 90 days prior written notice, cancel
an artisanal mining license where it is considered that the deposit requires
more advanced exploration and mining method for the best development of its
economic potential.

3.

The Licensing Authority may at the request of the artisanal licensee, grant an
exploration or mining license provided the artisanal licensee shows that he has
the necessary technical and financial resources to engage in the advanced
exploration and mining as prescribed by the Licensing Authority.

4.

Where an artisanal license is revoked and the artisanal licensee is not granted
an exploration or mining license over the area of the former, the Licensing
Authority shall determine an appropriate amount of compensation which shallbe promptly paid to the licensee for the loss he incurred due to the revocationof the license.

SECTION 2
MINING
16.

MINING LICENSE
1.

A mining license grants an exclusive right to mine for the specified minerals
within the license area. The license shall cover the area reasonably necessary
to carry out mining operations. The form and boundary of the area shall be as
specified in the Regulations.

2.

A mining license may be transferred, assigned or encumbered and inherited
with the prior approval of the Licensing Authority.
8

3.

17.

Suspension of mining operations under the license for more than 180 days
shall be grounds for revocation of a mining license.

DURATION AND RENEWAL
1.

A mining license shall be valid for a maximum period of twenty years or thelife of the deposit whichever is shorter. The license may be renewed subject tosubarticle 2 of this Article for a maximum period of ten years for each renewal.

2.

The licensee shall have the right to renew the license, provided he candemonstrate the continued economic viability of mining the deposit, has
fulfilled the obligations specified in the license and is not in breach of any
provision of this Proclamation, Regulations or Directives issued hereunderwhich constitutes grounds for suspension or revocation of the license.

SECTION 3
MINERAL WATER, GEOTHERMAL DEPOSITS AND
CONSTRUCTION MINERALS
18.

19.

MINERAL WATER AND GEOTHERMAL DEPOSITS
1.

A legitimate occupant of land may produce and use for non-commercial
purpose, without charge and with prior notification to the Licensing Authority,
mineral water from the area he occupies, provided that the area is not reservedor excluded pursuant to Article 6 of this Proclamation and, provided further,that he does not disturb or damage the adjacent occupants' land or property.

2.

A mining license granted for the extraction of mineral water may specify theamount and rate of production, which shall generally be limited to that which
permits the renewal of the water aquifer, and the horizon or depth from which
the water may be extracted. A license for brines may specify conditions of
production and of extraction and disposal of minerals produced and of the use
and disposal of the water remaining.

3.

A mining license granted for a geothermal deposit may limit the volume ofwater and the calorific content which may be extracted, it may also fix
conditions on the extraction and disposal of by-products and on the production,
use and reinjection of water in order to preserve the deposit.

CONSTRUCTION MINERALS.
1.

A legitimate occupant of land, may produce and use for non commercial
purpose, free of charge and without permission of the Licensing Authority,
construction minerals from the area he occupies, provided that the area is notreserved or excluded pursuant to Article 6 of this Proclamation and, provided
9

further, that he does not disturb or damage the adjacent occupants' land orproperty.
2.

Any person may produce and use for non-commercial purpose without charge
and with prior permission of the Licensing Authority, construction minerals
for the construction and maintenance of roads, dams, airports, schools,
hospitals and other non-commercial public works.

3.

The provisions of Articles 22 and 24 Sub Articles (3) and (4) of thisProclamation shall apply to the mining operation of construction minerals
conducted pursuant to Sub Article (2) of this Article.

CHAPTER 4
RIGHTS AND OBLIGATIONS OF LICENSEE
20.

21.

POSSESSION AND USE OF LAND
1.

The licensee may enter and occupy the land covered by the license during its
term.

2.

The licensee may use the land of the license area for activities in support ofmining operations and may grow crops and graze livestock for consumption byhimself, his agents and employees and their dependents.

3.

The holder of a mining license may also request from the appropriate authority
a lease for land outside of the license area which may be required inconnection with mining operations. The terms and conditions of such lease
shall be determined by the appropriate authority and its duration shall be thesame as that of the license including any renewals thereof.

USE OF CONSTRUCTION MINERALS, WATER AND TIMBER
1.

The licensee may remove and use construction minerals required for mining
operations which are found within the license area or within the land coveredby a lease, provided that no other license has been issued to another person forsuch minerals.

2.

The licensee may use surface and subsurface water found in the license area
and the area of a lease for consumption by himself, his agents, employees andtheir dependents. A licensee may also use surface water for mining operations,provided that such use does not result in a substantial reduction of the amountof water available to satisfy the need of other users or, unless authorized
pursuant to directive, result in the pollution thereof. A licensee shall notconstruct a dam or divert any watercourse without the prior approval of theappropriate Government Authority.

10

22.

23.

3.

The holder of an exploration or mining license may cut and use, from thelicense area and the area of lease, timber which is necessary for mining
operations. The licensee shall comply with the applicable laws regarding the
cutting of timber and reforestation and must submit a restoration plan as may
be specified by directive.

4.

The holder of a prospecting and artisanal mining license shall cut and use only
such timber as is strictly necessary for access to the areas in which mining
operations are carried out.

OTHER OCCUPANTS
1.

The licensee shall take proper precaution not to interfere with other legitimate
occupants of the license area, the land covered by a lease and adjacent land.

2.

Notwithstanding the provision of sub-article 1 of this Article, if the licensee's
mining operations require that the other occupant be displaced, the licensee
shall attempt to negotiate the compensation payable to such occupants. If theoccupants refuse to be displaced or to agree on the compensation, theLicensing Authority may cause the expropriation of immovable property, ifany, and the eviction of such occupants from the area of the licenses mining
operations.

3.

A licensee shall, if he damages, injures or destroys any installations or otherproperty of another legitimate occupant of the license area, the land covered bya lease or adjacent land, pay to the occupant compensation representing thevalue of such damage, destruction or injury as agreed by the parties or as
assessed by the Licensing Authority.

INFRASTRUCTURE AND OTHER CONSTRUCTION
1.

The holder of an exploration mining license may construct, operate andmaintain within the license area and the area covered by a lease all
infrastructure necessary for operations including facilities for roads,
communications and power. The licensee may also, with the prior written
approval of the Licensing Authority and in consultation with other authoritiesof the Government, construct such facilities outside of the areas covered by thelicense and a lease.

2.

The licensee may use the existing infrastructure if its use by such licensee shallnot impair the existing and approved use thereof by other persons.

3.

The Licensing Authority may require the licensee to cooperate and contribute
financially in the construction and maintenance of infrastructure to be used
jointly with another licensee or other authorised persons within the areas
covered by his license or lease if such joint use of the infrastructure is deemed
to be to the economic benefit of all parties concerned. The allocation of the11costs of construction and maintenance of such infrastructure shall be
determined by the Licensing Authority on the basis of proportional use.

24.

4.

The Licensing Authority may require the licensee to permit other persons to
use infrastructure of the licensee, provided that such use does not impede
mining operations.

5.

The Licensing Authority may impose on such person stated under sub-article 4
hereof a fee payable to the licensee if the use of such infrastructure is forcommercial purposes. The fee imposed shall be based on the extent of that
person's use in proportion to the total use of such infrastructure by all othersuch persons and the licensee provided that the licensee shall have apreferential right to capacity utilisation of the infrastructure.

6.

Notwithstanding sub-article 4 of this article in circumstances of national
emergency, the Government may also require the licensee to permit anotherperson or the Government to use temporarily the infrastructure of the licensee,
subject only to the payment of compensation in the event of damage including
loss of production thereto.

7.

The licensee may construct within the area covered by the license or a lease allindustrial, administrative, residential, medical and other buildings andfacilities necessary for mining operations.

8.

All constructions by the holder of a prospecting, an exploration or an artisanalmining license shall be of a temporary nature and shall be removed prior to thetermination of the license or to the relinquishment of the area on which such
construction is located unless otherwise required by the Licensing Authority.

9.

Notwithstanding the provisions of Article 49(2) of this Proclamation, allconstructions of a permanent nature built by a holder of a mining license may,upon the termination of the license, either be removed by the licensee or at therequest of the Licensing Authority be abandoned and become the property of
the Government free of charge.

CONDUCT OF MINING OPERATIONS
The licensee shall:
1.

promptly commence and carry out mining operations in a prudent, diligent andefficient manner, in accordance with appropriate technology and goodpractices generally accepted in the international mining industry;2.

comply with all work programmes and expenditure obligations unless adeparture therefrom is justified and receives the prior written approval of theLicensing Authority, and avoid the performance of work or the incurring ofexpenditure which is not required;

12

25.

3.

conduct mining operations in such a manner as to ensure the health and safetyof his agents, employees and other persons, and to minimize damage or
pollution to the environment; and4.

conduct mining operations in accordance with applicable regulations anddirectives.

EMPLOYMENT, TRAINING AND LOCAL SUPPLY
The licensee shall,

26.

1.

give preference to the employment of Eritrean nationals, provided that such
persons have the required qualifications or skills;

2.

give employees the training and education necessary to carry out mining
operations effectively and efficiently and comply with appropriate training
programmes;

3.

give preference to domestic goods and services, where they are readily
available at competitive prices and are of comparable quality.

DELIMITATION OF AREAS
The applicant for a mining license shall delimit by official survey the boundaries of
the area for which the license is sought. The same obligation shall apply with regard to
the application for a lease.

27.

BOOKS, RECORDS AND REPORTS
The licensee shall:
1.

maintain records of mining operations and submit reports and other documents
periodically to the Licensing Authority, the form, content and manner of whichshall be specified in the Regulations;

2.

maintain all financial, accounting, employment, commercial and other books
and records and comply with all other reporting and filing obligations under
the appropriate laws;

3.

make available all books and records for inspection by the Licensing Authority
and other duly authorized officials.

13

CHAPTER 5COMMON PROVISIONS FOR LICENSES
28.

APPLICATIONS
An application for a license or for its amendment, renewal, transfer, assignment,
encumbrance or inheritance shall be in the form and contain the information specified
by Regulations and directives issued to implement this Proclamation.

29.

30.

SURRENDER
1.

A licensee may, upon giving prior notice to the Licensing Authority, surrender
all or any part of the license area, provided that the licensee has fulfilled all
obligations under the license and is in compliance with the provisions of thisProclamation and the Regulations or directives issued thereunder.

2.

Upon surrender of part or the whole of the license, the licensee shall vacate thesurrendered portion of the license area.

BOUNDARIESThe license area shall comprise all of the land within its boundaries and all subsoil
thereunder to an indefinite depth within the vertical planes passing through eachboundary.

31.

32.

GRANTING LICENSES
1.

An artisanal mining license may be granted over a license if the Licensing
Authority considers that the activities of the artisanal miner will not unduly
interfere with the licensee's operations.

2.

A license may be granted over an artisanal mining license on the condition thatthe licensee shall make every reasonable endeavour not to interfere with theartisanal miner's operations.

TITLE TO SALE AND EXPORT OF MINERALS
1.

The holder of a prospecting or an exploration license may remove, transport,
analyze and, with the prior written consent of the Minister, export samples ofminerals for testing, provided that a comparable sample is maintained in
Eritrea. However, such minerals shall remain the property of the Government,
and the licensee shall return such exported samples to Eritrea, unless otherwise
authorized to dispose of them upon the prior written consent of the Minister.

2.

The holder of an artisanal or mining license shall obtain title to the minerals
specified in the license upon their extraction.

14

3.

33.

The holder of a mining license shall have the right to sell the minerals locallyor export all minerals specified in the license.

LIABILITY ON SURRENDER
Any person who surrenders or relinquishes his license or lease shall not be released
from the liability of performing the duties imposed upon him and due to be performedby him prior to the date of surrender or relinquishment of the license or lease.

PART IIIFINANCIAL REGIME
34.

35.

36.

ROYALTY
1

The licensee shall pay royalty for all minerals produced.

2.

The rates and manner of such payment, unless specified by agreement shall be
as determined by Regulations issued hereunder. The Regulation may specify
the conditions under which the rate and manner of royalty payment shall be
determined by agreement.

3.

The Licensing Authority may, in circumstances it deems appropriate, cause thereduction, suspension or waivers of the imposition of royalty by requesting theappropriate Government body.

TAXES
1.

The licensee shall pay income tax in accordance with the Mining Tax
Proclamation No.69/1995.

2.

The compensation received, according to their contract of employment, by
expatriate employees of the licensee or his contractor shall be subject to thepayment of income tax at a flat rate of 20%.

FEES
The licensee shall pay filing fees in connection with the application for a license andfor the renewal, transfer and other dealing thereof. The amount and manner ofpayment such fees shall be determined by Regulations issued hereunder.

37.

RENTALS1.

The licensee shall pay annually in advance to the Licensing Authority rental
based on the surface of the license area. Such rentals shall be specified byRegulations issued hereunder and may be adjusted; such adjustments shall
only apply to licenses issued after the date of the adjustment.

15

2.

38.

39.

The licensee shall also pay annually in advance to the appropriate authority arental for the area covered by a lease. Such rental shall be fixed in the
instrument granting the lease and shall remain fixed during its term, unless the
instrument provides otherwise.

CUSTOMS DUTIES AND TAXES
1.

The holder of a license and his contractor shall pay 0.5 percent duty on allimports into Eritrea of equipment, machinery, vehicles and spare parts(excluding sedan cars and their spare parts) necessary for mining operations.

2.

All goods imported pursuant to, sub-article 1 of this Article may be reexported, free of all export duties and taxes, but may subject to the provisionsof Articles 23(9) and 49(2), be disposed of with payment of duty and tax
thereon in accordance with the applicable laws.

3.

The holder of a license is entitled to export, free of all duties and taxes, allminerals produced pursuant to his license.

EXCHANGE CONTROL
1.

A holder of mining license producing exportable minerals may:a)open and operate a foreign currency account in banks in Eritrea inaccordance with the regulations of the Bank of Eritrea;b)retain abroad in an external account a portion of his foreign currency
earning as may be determined by directives to be issued by the Bank ofEritrea and pay from the retained earnings where foreign currency may
not be readily available by the Bank of Eritrea for the following
purposes;1)

to import equipment necessary for the mining operations;2)

for services, leases and licenses to be paid for in foreign
currency in accordance with agreements entered into;3)

for reimbursement of loans and debt services due legally tofinancial institutions outside Eritrea;

4)

for compensation payable to foreign employees who are notpermanently resident in Eritrea, and5)

for such other activities which contribute to the process andenhancement of the mining operations.

16

2.

3.

40.

A holder of a mining license producing exportable minerals may make thefollowing remittances out of Eritrea in the currency of investment or in an
approved currency at the prevailing rate of exchange on the date of remittance:a)profits and dividends accruing from mining investment;b)principal and interest on a foreign loan;c)fees, royalties or any other payments accruing pursuant to a technology
or management agreement relating to the mining investment;d)proceeds from any sales of assets including those derived upon theliquidation or winding up of the mining business of a foreign investor
or enterprise voluntarily or due to bankruptcy; ande)payment from the sale or transfer of shares of a mining investment or
acquisition in part or in whole of a mining operation by a domestic
investor.

Expatriates employed in a Mining operation may remit salaries and otherpayments accruing from their employment in accordance with the foreignexchange regulations of Eritrea

OTHER INCENTIVES
The rates of royalty and rentals to be determined under Articles 34 and 37(1) of thisProclamation shall be in such a manner as to encourage investment in minerals given
priority of development and mineral development areas.

41.

PARTICIPATION
Without prejudice to the provisions of Article 7 of this Proclamation, the Government
may acquire without cost to it a participation interest of up to ten percent of any
mining investment. Additional equity participation not exceeding a total of 30 per
cent including the ten percent above may also be provided to Government byagreement which shall specify the percentage, timing, financing, resulting rights andobligations and other details of such participation.

42.

GUARANTEEThe Licensing Authority may require the applicant for a license, or renewal or for thetransfer, assignment or encumbrance of a license to provide a cash, bank or otherguarantee to secure the applicant's obligations with regard to rehabilitation of themining area progressively or at the end of mining operations. The conditions of sucha guarantee shall be determined by directives to be issued by the Minister.

17

PART IVADMINISTRATION43.

RESPONSIBILITY OF THE LICENSING AUTHORITY
1.

All types of mining licenses shall be issued by the Licensing Authority.

2.

The Licensing Authority has the power to:

3.

44.

a)

issue, suspend or cancel a License pursuant to this Proclamation andRegulations and directives issued hereunder;b)

ensure that a licensee has the financial resources and technicalcompetence necessary to fulfil the obligations under the license;c)either by competitive bidding or direct negotiation, enter into
agreements on behalf of the Government;d)inspect and ensure that mining operations are carried out in accordancewith this Proclamation, Regulations and directives issued hereunder
and any agreement;e)collect and audit royalties, rentals and other fees payable pursuant tothis Proclamation;f)require an applicant for a mining license to submit an environmental
impact study before the granting of the license; andg)without prejudice to prior commitment of the licensee, require that alicensee sell all or a portion of his minerals to the Government, to alegal person owned by it, or to another Eritrean person subject to thepayment of the international market price prevailing at the time of thesales transaction.

The Minister may issue directives and prepare model contracts to serve as
basis for the negotiation of agreements in order to give effect to the provisionsof this Proclamation.

INSPECTION OF MINING OPERATIONS
An officer, duly authorized by the Licensing Authority may, at all reasonable times
but so as not to unreasonably impede or obstruct the mining operations, enter, inspectand examine any place, works, machinery and equipment occupied or used in or inconnection with mining operations.

18

45.

46.

REGISTRATION AND REPRESENTATION OF LICENSEES
1.

Unless otherwise permitted or determined by the Ministry, the licensee shall be
registered in the Registry of Trade with the appropriate authority and shallmaintain an office in Eritrea during the entire term of the license.

2.

The licensee shall not be required to obtain any other authorization or
permission from any other Government office in order to produce, sell orexport minerals covered by the license or to import any goods or to enter into
contract for the acquisition of licenses of any intellectual property required formining operations.

3.

The provision of sub-article 2 of this Article shall not relieve the licensee fromcomplying with other obligations of customs and bank formalities.

4.

The licensee that is not a natural person shall also maintain, during the term of
the license a representative who is authorized to act on its behalf and shallnotify the Licensing Authority of the identity of such representative or any
change thereof.

REGISTRATION OF LICENSES & LEASESThe Licensing Authority shall establish a Register in which shall be entered details ofeach license applied for and the subsequent grant/refusal of that license. license andany relevant conditions. Every instrument under which such license is transferred,assigned, relinquished, encumbered or otherwise dealt with shall be presented to the
Licensing Authority for registration within 90 days after the date thereof (or withinsuch further time as the Licensing Authority may allow) or it shall otherwise become
null and void. The Licensing Authority shall record in the Register Summary detailsof every such instrument and also record any other action taken which affects thetenure or conditions of the license. The register shall be open for public inspection at
all reasonable times.

47.

CONFIDENTIALITY
1.

Except as provided in Article 46 of this Proclamation all information
submitted in applications reports and other filings pursuant to thisProclamation shall be kept confidential.

2.

Notwithstanding the provision of sub-article 1 of this Article:a)Government officials may request access on a confidential basis tosuch information for their Officialduties, and in such capacity permit
access to accountants professional consultants and legal counsel.

b)

The Government may compile and distribute information, geographic
or geological maps statistics and reports and other documents where
19the identity of licensee is not disclosed or apparent and his interests arein no way adversely affected.
3.

48.

49.

This confidentiality obligation shall end upon the termination of the license towhich information relates or as such otherwise specified by agreement.

SETTLEMENT OF DISPUTES
1.

The Licensing Authority may, in accordance with procedures to be laid down
by regulations, examine and decide disputes between licensees, as well as
between a licensee and a third party concerning rights arising from licenses.
The Licensing Authority shall have the power to determine and enforce
compensation to be paid by one party to the other.

2.

A decision of the Licensing Authority made pursuant to sub-article 1 of this
Article may be appealed to the court of competent jurisdiction; within 60 daysin accordance with the provision of the Eritrean Civil Procedure Code.

3.

The Licensing Authority shall have the power to administer oaths in any
proceeding before it.

4.

Any dispute, controversy or claim between the government and the licensee
arising out of, or relating to the agreement or the interpretation, breach or
termination thereof shall, to an extent
possible, be resolved throughnegotiations.

5.

In the event that agreement cannot be reached through negotiations, the caseshall be settled by arbitration in accordance with the as laid down by theprocedures the Licensing Authority or as specified in the agreement. An
arbitral award shall be final and binding upon the Parties.

TERMINATION OF MINING RIGHTS
1.

2.

The licensee's right to conduct mining operations shall terminate if:a)the licensee relinquishes the whole area or surrenders the license;b)

the license is revoked by the Ministry pursuant to the provisions of thisProclamation or Regulations issued pursuant to this Proclamation;c)the license expires without being renewed; ord)without prejudice to the right of heirs, the licensee dies or where thelicensee is not a natural person, it is liquidated or declared bankrupt.

Upon the termination of a mining license, the Government may, unless anagreement specifies otherwise, acquire all of the immovable and movable
property used in mining operations at a price equal to the then undepreciated20and unamortised value of such assets, as shown in the financial books ofaccount of the licensee. If the Government does not exercise such right, within
90 days the licensee shall be free to dispose of such assets to another person inaccordance with applicable laws.

50.

3.

The Government shall have the option to either take over at no cost to it any
asset that may not have been disposed of by way of sale within a period of one
year from the termination of the mining license or to require the licensee toremove such assets and rehabilitate the mining license area.

4.

The holder of a license or a lease may be required, on surrender or revocation,
to fence and safeguard to the satisfaction of the Licensing Authority, any pits
and such other works in the license and/or lease area so that the health, life andproperty of persons may not be endangered.

INFRACTIONS AND SANCTIONS
1.

If a licensee, or any other person fails to comply with the requirements of thisProclamation, Regulations or directive issued pursuant to this Proclamation orwith the obligations the license applicable to such person, he shall be guilty of
an infraction under this Proclamation.

2.

An infraction may result in revocation or suspension of the license and/or in
the imposition of a fine. The classification of infractions and the sanctions
applicable to each category, in addition to those which may be applicable
under the Penal Code of Eritrea shall be specified by Regulations.

3.

Officials of the Licensing Authority or any other person shall report all
infractions to the Controller. A report of any infractions shall include astatement of the facts and all available evidence in support of such statement.

4.

The Controller shall immediately notify the licensee of the infraction reported,and the licensee shall take immediate remedial action, if such infraction iscapable of remedy.

5.

Any person who violates the provisions of this Proclamation or Regulations ordirectives issued hereunder is guilty of an offence and liable, upon conviction,
to punishment under the provisions of the Penal Code.

PART VMISCELLANEOUS
51.

EXISTING MINING RIGHT
1.

All mining rights existing before entry into force of this Proclamation shallremain valid and shall be governed by the terms of their respective agreements,
21

provided, however, that if such terms are inconsistent with the provisions of
this Proclamation, the Licensing Authority shall undertake negotiations withthe holder of such right so that the terms of such right shall, in so far aspracticable, be revised to conform to the provisions of this Proclamation.
2.

52.

53.

Notwithstanding the provision of sub-article 1 of this Article, the holder ofmining rights issued before entry into force of this Proclamation may beentitled to incentives under this Proclamation, provided, however, the holderof mining rights shall be willing to negotiate with the Licensing Authority
regarding the agreement which is inconsistent with this Proclamation.

INAPPLICABLE LAWS
1.

Unless otherwise provided by agreement, the provisions of the Civil Code of
Eritrea regarding Administrative Contracts shall not be applicable to suchagreements that may be concluded between the Government and the licensee.

2.

Any law, Regulations, directives or practices which are inconsistent with thisProclamation shall not apply with respect to matters provided for in thisProclamations.

EFFECTIVE DATEThis Proclamation shall enter into force on the date of its publication in the Gazette ofEritrean Laws.

Done at Asmara this 20th day of March 1995
Government of Eritrea.

22

PROCLAMATION NO.69/1995
PROCLAMATION TO PROVIDE FORPAYMENT OF TAX ON INCOME FROMMINING OPERATIONSWHEREAS, the payment of tax on income from mining operations calls forparticular tax treatment,
NOW, THEREFORE it is hereby Proclaimed as follows:

1.

SHORT TITLE
This Proclamation may be cited as the "Mining Income Tax Proclamation No.
69/1995".

2.

DEFINITIONSIn this Proclamation unless the context requires otherwise:1.

all definitions set forth in Article 2 of the mining Proclamation No.68/1995
shall apply.

2.

“accounting year” means the year ending on 31 December, according to the
Gregorian Calendar.

3.

“affiliate” means any person who directly or indirectly controls or iscontrolled by or under direct or indirect common control of another person,with "control" meaning the power to direct or administer the management andpolicies of such person, or the ownership of 50 per cent or more of the voting
rights in such persons.

4.

“capital expenditure” means expenditure, other than pre-production costs,
incurred for operations, the useful life or the benefits of which extend beyond
the accounting year in which the expenditure is incurred.

5.

“commencement of production” means the commencement of regular
production for commercial purposes from the license area of the licensee.

6.

“income” means all revenue credited or received from mining operations
within Eritrea, irrespective of where it is credited or received.

7.

“pre-production costs” means all expenditure incurred before the date ofcommencement of production in establishing the mine and other facilities
necessary to carry out mining operations.

23

8.

3.

4.

“revenue expenditure” means an expenditure incurred for mining operations,other than capital expenditure and pre-production costs.

TAX
1.

A holder of a mining license shall pay income tax on the taxable income at therate of 38 percent.

2.

Income tax shall be calculated for each accounting year and shall be paid
within 90 days after the end of such year.

3.

A holder of an artisanal mining license shall pay income tax on taxable incomein accordance with directives issued by the Minister.

DETERMINATION OF TAXABLE INCOME
Taxable income shall be computed on a historical accrual accounting basis bysubtracting from gross income for the accounting year in question all allowablerevenue expenditure, depreciation, reinvestment deduction and permitted losses.

5.

DETERMINATION OF GROSS INCOME
Gross income shall include all revenue actually received from mining operations,provided that such revenue resulted from a transaction with a person who was not an
affiliate. If any revenue was received from an affiliate, the Licensing Authority may
adjust such amount to reflect revenue that would have been received based on market
prices for a similar transaction carried out at the time at arms-length or shall use suchother provisions as may be determined by agreement.

6.

DETERMINATION OF COSTS
1.

All capital expenditure, pre-production costs and revenue expenditure shall beentered in the books of account of the licensee as the actual amount of such
expenditure, provided that they arose as a result of a transaction with a person
who was not an affiliate. If any expenditure was paid to an affiliate, theLicensing Authority may adjust such amount to reflect the proper expenditurethat would have been paid at the time based on market prices for similar armslength transactions or shall use such other provision as may be determined byagreement.

2.

If the licensee has received a contribution to capital in the form of physicalassets, services or expenditure, such contribution shall be valued at the market
value of the assets or services on the date they were contributed.

3.

The value of such assets and services and the amount of such expenditurecontributed to capital shall be treated by the licensee as capital expenditure or
pre-production costs, as the case may be, and shall be depreciated inaccordance with Article 8 of this Proclamation.
24

7.

REVENUE EXPENDITURE
Revenue expenditure shall be comprised of all costs and expenses incurred after thedate of commencement of production which are not capital expenditure, and shall
include the following:

8.

1.

cost of geological, geochemical and geophysical surveys and studies andrelated services carried out anywhere in Eritrea in the context of mineral
exploration and mining operations in general;2.

cost of production, including extraction, storage, treatment, transport and saleof minerals;

3.

cost of restoration of land within a license area and an area covered by a lease,including the cost of filling, closing or blocking or generally rendering safe all
installations used in mining operations;

4.

general administrative expenses and management and professional
commissions and services, lease licensing and other fees incurred within andoutside of Eritrea for mining operations, provided that the amounts expended
were for services actually rendered or property actually provided andcorrespond to amounts normally paid by other persons in similar transactions;5.

interest payments on loans used exclusively to finance mining operations,excluding those to prospect and explore, provided that the interest rate is fixed
on a reasonable commercial basis and reflects that which would normally be
paid by another person with a similar credit rating and equity: debt ratio as thetax payer in question for similar financing and that the loan has beenpreviously approved on this basis by the Licensing Authority;

6.

all fees, rentals, royalties and other taxes paid to the Government, except taxes
payable pursuant to this Proclamation.

DEPRECIATION
All capital expenditure and pre-production costs shall be depreciated. Depreciation ofsuch expenditure and costs for any accounting year shall commence when the related
assets are installed and ready for use and shall be calculated on a historical cost basis
using the straight-line method over a useful life of four consecutive years with noresidual value left at the end of the fourth year.

9.

REINVESTMENT DEDUCTION
1.

The licensee shall be entitled to deduct from his taxable income for eachaccounting year an amount equal to five percent of gross income. This amountis to be reinvested in other mining operations, or in other investments within
Eritrea approved by the Licensing Authority.
25

2.

10.

11.

12.

If any part of such amount is not reinvested by the licensee by the end of thesecond accounting year following that in which it was deducted, it shall be
included in the gross income of that second accounting year.

PERMITTED LOSSES
1.

Any financial, loss, resulting from the mining operations of a licensee in an
accounting year may be carried forward and deducted from gross income in theten accounting years which follow the year in which the loss is incurred.

2.

The amount of any loss or damage to physical assets or other liability, except
fines and penalties, which is not covered by insurance may be deducted fromgross income in the accounting year in which such loss or damage occurred or
became known or such liability was paid.

TRANSFER OF INTEREST
1.

If any licensee transfers or assigns wholly or partially any interest in a license,
the consideration he receives for such transfer or assignment shall be taxable
income to the extent that such consideration exceeds the amount of his
unrecovered expenditure in that part of the interest transferred, regardless ofwhether recovery has been through dividends received or through deduction ofrevenue expenditure, depreciation, reinvestment deduction or permitted losses,
as the case may be.

2.

If a person acquires wholly or partially any interest in a license theconsideration he pays with such acquisition shall represent his cost and shall,to the extent that it represents the transferor or assignor licensee's unrecovered
expenditure, be treated as capital expenditure to be depreciated in accordancewith Article 8 of this Proclamation.

DIVIDEND TAX
There shall be no tax on dividends declared and distributed from taxable income after
deduction of income tax.

13.

TAXES ON SERVICES, LEASES AND LICENSES
1.

The licensee who contracts for services, the lease of movables or the licensingof intellectual property from a person who is not a resident of Eritrea or who is
temporarily present in Eritrea shall pay the taxes on behalf of such person.
Such taxes shall be paid quarterly, within 20 days after the end of the period towhich the payment relates.

26

14.

2.

Expenditure paid under sub-article 1 of this article shall be at the rate of 10%(ten percent) on the amount paid, less all charges for mobilization anddemobilization.

3.

For the purpose of this article, a person is temporarily present in Eritrea if heperforms work in the country for more than 183 days in any accounting year.

APPLICATION OF OTHER LAWS
The tax laws presently in force in Eritrea shall not apply to matters provided for in thisProclamation.

15.

POWER TO ISSUE DIRECTIVES
The Minister of Finance in consultation with the Minister of Energy, Mines and Water
Resources shall have the power to issue directives necessary for the effective
implementation of this Proclamation.

16.

EFFECTIVE DATEThis Proclamation shall enter into force on the date of its publication in the Gazette ofEritrean Laws.

Done at Asmara, this 20th day of March, 1995.
Government of Eritrea.

27

LEGAL NOTICE NO.19/1995
REGULATIONS ON MINING OPERATIONSPART I
GENERAL
1.

SHORT TITLE
These Regulations may be cited as the “Mining Operations Regulations No.19/1995”.

2.

DEFINITIONSIn these Regulations, unless the context requires otherwise:1.

definitions provided in Article 2 of the Mining Proclamation No. 68/1995 shallapply.

2.

"Proclamation" means the Mining Proclamation No.68/1995.

PART II
LICENSES RELATING TO MINING OPERATIONSCHAPTER IAPPLICATIONS FOR LICENSES
3.

APPLICATION FOR A PROSPECTING LICENSE
An application for a prospecting license shall be submitted in the specified form andinclude the following particulars:
1)2)

where the applicant is a natural person:a)his full name, place and date of birth,b)profession; andc)place of residence and address.

where the applicant is a legal person:a)

its name, nationality, legal form, and capital;b)address of its head office, name and address of its representative in
Eritrea;
28

c)

4.

the following documents duly certified by the appropriate officer ofsuch entity:
1)

copies of its memorandum and articles of association;2)

copy of the latest annual report of the board of directors, if any;

3)

copies of the balance sheet, profit and loss statements andauditor’s reports for the previous three years, if any;

4)

a list of the names of the board of directors, showing theaddress and nationality of each, if any; and any other person
authorized to sign on behalf of the applicant in the context ofmining operations and other activities relating to Eritrea;

5)

a plan and description of the proposed area of prospecting;6)

any license, or other mining right the applicant currently holds
or has previously held in Eritrea;

7)

description showing the applicant's financial situation, technicalcompetence and experience;8)

the work programme and expenditure the applicant proposes tocarry out and incur during the term of the license; and9)such other information as the Licensing Authority may
reasonably request.

APPLICATION FOR AN EXPLORATION LICENSE
An application for exploration license shall include the following particulars:

5.

1)

All information specified under Article 3 of these regulations;2)

The identity number of the applicant's prospecting license, if any, on which theapplication is based ; and3)

A report summarizing the geological information known to the applicant
regarding the minerals and the area for which the license is requested.

APPLICATION FOR MINING LICENSE
1)

An application for a mining license shall be submitted in the specified form
and include the following particulars:a)

all information specified under Article 3 of these Regulations;
29

2.

6.

b)

the identity of the applicant's exploration license, on which theapplication is based;c)the period for which the license is sought;d)details of the deposit, including proved, estimated and inferred reserves,and the physical and chemical, mineralogical and technicalcharacteristics of the minerals;e)a description and plan of the proposed license area, at an appropriate
scale, indicating the geographical coordinates of the turning points
along its boundaries and the distance between them as defined by an
official boundary survey, and showing all important landmarks,
buildings, topographic and other physical features;f)proposed development and production programme and otherinformation as reasonably required by the Licensing Authority.

g)a feasibility study indicating estimates of sales, revenues, capital andoperating costs, depreciation and other deductions, estimated profitsand cash flow;h)summary programme of employment and training;i)

details of infrastructure requirements; andj)environmental impact assessment report if requested by the Licensing
Authority.

An application for an artisanal mining license shall be submitted in thespecified form and include the following particulars:a)the applicant’s full name, address, date and place of birth;b)the minerals and the area for which the license is requested; andc)such other information as the Licensing Authority may reasonably
request.

FEES TO ACCOMPANY APPLICATIONS FOR LICENSES
An application for a license under this part shall be accompanied by the specified
Application fee and the specified rental for the first year of the license.

30

CHAPTER IIISSUING OF LICENSE
7.

8.

9.

REGISTRATION, NOTICE AND VERIFICATION OF APPLICATIONS
1)Each application for a license, if complete and in the proper form, shall, in theorder received, immediately be noted in the register maintained in the office of
the Licensing Authority for such purpose, and each applicant shall upon suchregistration be given a receipt indicating the date and number thereof.

2)

Within 14 days following the registration of each application for prospecting,
exploration and mining licenses, a notice thereof shall be published by theapplicant in a newspaper which has wide circulation in Eritrea.

3)

The applicant shall bear all cost necessary for such publication and shall lodge
a copy of the advertisement with the Licensing Authority.

4)

Within thirty days after publication of the notice as specified in sub-article 2 ofthis Article, the Licensing Authority shall verify all information submitted by
the applicant.

LODGING OF OBJECTIONS
1)During the thirty days period specified in Article 7(4) of these Regulations,any person may file at the office of the Licensing Authority a written objection
to the grant of such licence.

2)

The Licensing Authority shall upon the expiry of the thirty days promptly hearand decide upon all objections forwarded to it under sub-article (l) of this
Article.

GRANT AND REGISTRATION OF LICENSE
1)

If, upon the expiry of the thirty days period specified in Article 7(4) of theseRegulations, no objection to the application has been filed at its office, theLicensing Authority shall, following verification of all information submitted
in connection with the application grant to the applicant the license for the areasought, or for that part of the area and the minerals which are not reserved or
excluded in accordance with Article 6 of the Proclamation and Article 12 ofthese Regulations, provided, however, that no license shall be granted unlessthe applicant:a)

has demonstrated to the Licensing Authority in the application that hehas the necessary financial and technical resources to meet the
obligations relating to the license requested; and

31

b)

10.

11.

has proposed or agreed to a work programme and expenditure ordevelopment and production programme, as the case may be, costing
not less than the prescribed minimum expenditure commitment andacceptable to the Licensing Authority.

2)

Where an objection to the application has been filed pursuant to Article 8 ofthese Regulations, the granting of the license shall be deferred pending adecision by the Licensing Authority. If the decision of the Licensing Authority
is against the submitted objection then a license shall be issued to the applicant
subject to sub- article 1 of this Article.

3)

If the Licensing Authority decides to approve the application for a license it
shall enter such decision in a register kept for that purpose, and notify theapplicant in writing.

4)

As specified under Article 43 (1) of the Proclamation the power to issue alltypes of mining licenses shall be vested in the Licensing Authority.

REJECTION OF LICENSE
1)

if the Licensing Authority determines that the application or the information
supplied in connection therewith is materially inadequate, it shall so notify theapplicant, setting out the reasons for its decision.

2)

The applicant shall be permitted to consult with the Licensing Authority inorder to provide all evidence in support of his position, and be afforded a time
not less than thirty days to overcome the objections of the Licensing Authority
and shall be entitled to amend or complete his application, but the boundariesof the land applied for shall not be changed.

3)

If, following such consultation and the expiry of such time, the Licensing
Authority still believes that the application or the information supplied or the
resources available to the applicant are materially insufficient to justify the
grant of a license, it shall so notify the applicant.

4)

In the event of an adverse decision the applicant shall be entitled to therecourse specified in Article 46(2) of these Regulations.

SHAPE OF LICENSES AND DISCOVERY CERTIFICATE AREAS
1)

The shape of an area for an exploration license shall be rectangular with thelonger side not exceeding twice the length of the shorter side and its
boundaries shall run north-south and east-west.

2)

The shape of an area for a mining license including artisanal license shall be,
as far as it is practical, rectangular with the longer side not exceeding twice thelength of the shorter side and its boundaries shall be oriented at the applicant's
discretion.
32

3)

12.

The shape of the area reserved under a Discovery Certificate shall be a square
the boundaries of which shall run north-south and east-west with the discovery
marker positioned in its centre, at the point where two diagonal lines drawn
from opposite corners intersect.

SIZE OF LICENSE AND DISCOVERY CERTIFICATE AREAS
1)

The maximum Area to be covered by a single license shall be:
a)
b)
c)
d)
e)

13.

14.

100 km² for a prospecting license
50 km² for an exploration license;
10 km² for a mining license;
5,000 m² for an artisanal mining license;
1 km² for the area reserved under a Discovery Certificate.

2)

An artisanal mining licensee may not hold more than two licenses at any one
time.

3)

The Licensing Authority may by directive revise and, fix the maximum andminimum sizes of the area to be covered by a license specified in this Article.

EXCLUDED AREAS
1)Unless the Licensing Authority decides otherwise, no license shall be issued
for any area which is within 100 meters of a site of archaeological, cultural or
religious importance or a public building, railway, highway, airport, dam,
reservoir, pipeline, factory or other Government installation.

2)

Unless the Licensing Authority decides otherwise, no person shall prospect onland which is within 100 meters of a municipal area, village community or
cemetery.

REPLACEMENT AND ISSUANCE OF COPIES OF LICENSES
1)

Subject to the specified fee a licensee may request from the Licensing
Authority a copy of the license. Upon receiving such request, the Licensing
Authority shall issue and deliver such certified copy to the licensee.

2)

The licensee may apply to the Licensing Authority for the replacement of alicense which has been lost or destroyed. Upon receiving such request, theLicensing Authority shall issue and deliver replacement of such license to thelicensee.

33

CHAPTER III
RENEWAL, TRANSFER AND REVOCATION OF
LICENSES
15.

RENEWAL OF AN EXPLORATION LICENSE
1)

16.

An application for the renewal of an exploration license shall be made in thespecified form ninety days before the end of its then present term, and shall
include the following particulars:a)any change in the information submitted in applying for the original
license or a prior renewal thereof;b)annual reports containing the information as specified by theseRegulations;c)details of the work programme and expenditure that the applicant
proposes to carry out and incur during the renewal period;d)part of the license area to be relinquished as indicated on the specified
form in accordance with Article 11 of the Proclamation; ande)such other information as the Licensing Authority may reasonably
request.

2)

Unless the Licensing Authority agrees otherwise, an area to be relinquished asstated in subarticle l(d) of this Article shall be comprised as far as practical of
multiples of one square kilometre but not less than one square metre so
designed to maintain a rectangular shape for the license area to be renewed. If
the license area is 1 square kilometre or less then no relinquishment is required.

3)

After verifying the documents attached with the application and upon paymentof the prescribed renewal fees and rental by the applicant, the Licensing
Authority shall renew the exploration license in accordance with Article 10(l)and (2) of the Proclamation.

RENEWAL OF A MINING LICENSE
1)

An application for the renewal of a mining license shall be made in thespecified form one hundred eighty days prior to the expiry of the then-present
term of the License; and shall include the following particulars:a)any change in the information submitted in applying for the original
license or a prior renewal thereof;

34

2)

17.

details, including a plan, indicating the remaining proved, estimatedand inferred reserves of the deposit; andc)such other information as the Licensing Authority may reasonably
request.

After verifying the documents attached with the application and upon paymentof the prescribed renewal fees and rentals by the applicant, the Licensing
Authority shall as appropriate renew the license in accordance with Article 17of the Proclamation.

RENEWAL OF AN ARTISANAL MINING LICENSE
1)

2)

18.

b)

An application for the renewal of an artisanal mining license shall be made in
the specified form thirty days prior to the expiration of the then-present term of
the license and shall include the following particulars:a)any change in the information submitted in applying for the original
license or a prior renewal thereof; andb)such other information as the Licensing Authority may reasonably
request.

After verifying the documents attached with the application and upon paymentof the prescribed fees and rentals by the applicant, the Licensing Authority
shall renew the license in accordance with Article 15(l) of the Proclamation.

TRANSFER., ASSIGNMENT, ENCUMBRANCE AND INHERITANCE
1)

An application for the transfer or assignment of an exploration license, theright to obtain a mining license in accordance with Article 10(3) of the
Proclamation as well as an application to transfer or assign a mining license inaccordance with Article 16(2) of the Proclamation shall be in the specified
form and include the following particulars:a)with regard to the proposed transferee or assignee, all information
required under Article 3 of these Regulations except (2) (C) , 5, and 8;b)an undertaking by the proposed transferee or assignee to comply withall the terms and conditions of the license, including the applicable
work programme and minimum expenditure condition or thedevelopment and production programme and any other undertakings ofthe licensee; andc)all details of the contractual, economic and financial terms andconditions of the proposed transfer or assignment.

35

2)

3)

4)

An application for the encumbrance of a mining license in accordance with
Articles 16(2) of the Proclamation shall be in the specified form and include
the following particulars:a)with regard to the proposed beneficiary of such encumbrance, allinformation required under Article 3 of these Regulations except (2) (c)5, and 8;b)the nature, terms and conditions of the security interest proposed to be
granted; andc)the condition under which the proposed security interest would be
realized, including such safeguards as the Licensing Authority may
require to assure the financial and technical qualifications of theeventual acquirer of the license and his undertaking to respect the terms
and conditions of the license, the development and production
programme and any other undertaking of licensee.

An application for the proposed transfer of a mining license by inheritance inaccordance with Article 16(2) of the Proclamation shall be in the specified
form and contain the following particulars:a)the legal proceedings relating to the determination of the heirs of thelicensee and, with regard to such heirs, all information required under
Article 3 of these Regulations;b)details of the applicant's financial situation, technical competence andexperience; andc)an undertaking by the heirs to comply with all the terms and conditionsof the license, including the development and production programme
and any other undertaking of the licensee.

In accordance with Article 14(3) of the Proclamation:a)an application for transfer, assignment or encumbrance of an artisanalmining license shall be in the specified form and include all
information with regards to the proposed transferee, assignee orbeneficiary of such encumbrance as specified under article 5(2) ofthese Regulations; andb)

an application for proposed transfer of an artisanal mining license byinheritance shall contain the legal proceedings relating to thedetermination of the heirs and, with regard to such heirs, allinformation required under article 5(2) of these Regulations.

36

19.

REVOCATION AND SUSPENSION
1)The Licensing Authority may, in accordance with Article 41 of theseRegulations revoke or suspend any license as a result of infractions committed
by the licensee.

2)

In addition to the provision of sub-article 1 of this Article an artisanal mining
license may be revoked pursuant to Article 15(2) of the Proclamation.

PART IIIDISCOVERY
20.

21.

NOTICE OF DISCOVERY1)

Any person who makes a discovery of minerals or a deposit in an area not the
subject of a license or license application shall immediately place a marker at
the location of the minerals discovered. The marker shall be of 1800
millimetres high and made of durable material such as iron pipe or star picket
and shall bear the name of the discoverer and the date of discovery by meansof a legible note protected from the weather by a thick and durable container
affixed to the marker.

2)

Any person who makes a discovery of minerals or a deposit shall submit a
notice of discovery to the Controller indicating the location and nature of suchdiscovery, and submit samples of the minerals discovered.

3)

The Licensing Authority may, where appropriate, cause the award of prizes toa person who filed a notice of discovery.

4)

All notices required to be filed by this Article shall be in the form and mannerprescribed by the Licensing Authority.

VERIFICATION AND CERTIFICATION
1)Upon being notified of the discovery, the Licensing Authority shall verify thenature of the minerals submitted and the location of the marker placed by thediscoverer, and shall confirm that the area in question for one square kilometre
centred on the marker has not been the subject of a previous discovery
certificate issued for the discovery of the minerals claimed and is not subject toan existing license or application therefore and the area has not been reservedor excluded.

2)

Where the discovery is verified and in accordance with Article 13 sub-articles(1) to (4) of the Proclamation and with sub-article (1) of this article the area isopen for license application, the Licensing Authority shall issue a Discovery
Certificate in respect of land described in Articles 11 and 12 of these37Regulations to the discoverer which is valid for twelve months from its date ofissue.

22.

RIGHTS AND OBLIGATIONS OF A HOLDER OF A DISCOVERYCERTIFICATE
1)

A person who holds a Discovery Certificate shall have the right to be granted
an exploration license if, during the term of validity of such certificate, he files
an application for such license which meets the requirements of the application,
notably as regards the financial and technical capability to explore for theminerals discovered.

2)

During the term of validity of the Discovery Certificate, the discoverer may
prospect for the minerals or the deposit he has discovered, but he may notremove or dispose of such minerals.

PART IVRIGHT AND OBLIGATIONS OF LICENSEESCHAPTER IRIGHTS
23.

INFRASTRUCTURE AND OTHER CONSTRUCTION
1)

All infrastructure and other facilities of the licensee shall conform toappropriate design and technical norms and be constructed, maintained andoperated in a manner to assure their safe and efficient use, in accordance withapplicable directives.

2)

if the licensee requires construction of infrastructure which is to be used byother persons for commercial purposes then as mutually agreed among theparties or as determined by the Licensing Authority any of the following
alternative arrangements may apply:a)

The original licensee funds, constructs and retains ownership of theinfrastructure facility, operates and maintains it and provides services
to the other users under license by the Government for a guarantee fee
payable by the other users sufficient to service interest, depreciationand operating and maintenance costs, which are allocated by the
Licensing Authority on the basis of capacity requirements and use.

b)

The original licensee and the other persons which will makecommercial use of the infrastructure facilities share the cost of
construction, operation and maintenance of the infrastructure on thebasis of their capacity requirements and use, and hold an undivided
38

share of ownership of the infrastructure asset in question under theterms of joint venture agreement for its specific establishment and use.
c)

3)

24.

The original licensee and all other potential users contribute their shareof the cost of construction of such infra-structure to Government on thebasis of their respective capacity requirements. Government will design,build, own, maintain and operate the facility and provide the services
required in return for a user's fee which in aggregate should at aminimum cover the annual maintenance and operation costs of the
facility.

The annual depreciation for infrastructure facilities shall be computed by
dividing the amount of as yet undepreciated capital cost of such infrastructureby the number of years remaining of the term of the licensee's license or four
years whichever the lesser and in particular:a)

if option (a) in sub-article (2) of this article is adopted the infrastructure
facility will be owned by the original licensee who shall account for theother parties’ capita1 contributions, fees and charges received but who
will have the benefit of deducting the total annual depreciation of theinfrastructure facility from his gross income;b)

if option (b) in sub-article (2) of this article is adopted each joint
venture participant shall capitalise the cost of his individual undivided
share of ownership of the infrastructure asset and shall deduct eachyear from his gross income depreciation proportional to his share ofownership as well as his share of maintenance and operating costs; andc)if option (c) in Sub-article (2) of this article is adopted the original
licensee and other users shall capitalise and depreciate their respective
capital contributions to Government for the construction of theinfrastructure facility and expend annually the usage fees and charges
levied by Government.

DISPOSAL OF MINERALS OBTAINED DURING PROSPECTING AND
EXPLORATION
1)

If the holder of a prospecting or an exploration license desires to retain or
dispose of any minerals obtained in the course of operations, he shall so apply
to the Licensing Authority.

2)

The Licensing Authority may authorize the removal of minerals from thelicense area, subject to such conditions as it may impose, and it may authorize
the applicant to retain and dispose of the minerals in respect of whichapplication is made on payment of the prescribed fees or royalties, if any.

39

25.

AERIAL PHOTOGRAPHS AND DATA
1)

If the licensee desires to take aerial photographs, he shall first obtain thewritten permission of the Licensing Authority and other appropriate
Government offices as indicated to him by the Licensing Authority.

2)

The licensee shall promptly file with the Licensing Authority prints of all suchphotographs taken pursuant to sub-article (1) of this Article.

3)

The public shall have access, to all available non-confidential maps and data inthe off ice of the Licensing Authority.

CHAPTER IIOBLIGATIONS26.

DELIMITATION OF BOUNDARIES
1)Prior to applying for a mining license, the applicant shall delimit the area forwhich the application is sought. Delimitation shall be by markers placed ateach turning point along the boundary of the area and along each straightsegment at intervals of not less than 300 metres.

2)

Markers placed at each turning point along a boundary shall be durable
material preferably iron pipes or star pickets and project at least 1800
millimetres above the ground and be securely fixed into the ground. Markers
along each segment of the boundary shall be of durable material preferablyiron pipes or star pickets or metal and shall project at least one meter above theground and be securely fixed into the ground.

3)

To each turning point marker shall be fixed a sign indicating the name of theapplicant and eventually, the registration number of his license.

4)

In the event of a dispute the Licensing Authority may cause the delimitation ofboundaries of an area subject to an application for a license or a license area tobe examined and verified by an official designated for that purpose by the
Licensing Authority and may also require that a Government surveyor confirm
such boundary.

5)

The applicant or the licensee, as the case may be, shall assist the Licensing
Authority in such verification.

6)

If the surveyor determines that the boundaries do not accurately reflect the area
requested in an application or specified in the license, the description of suchboundaries shall be adjusted accordingly to reflect the actual position of theboundary marker and the applicant or licensee, as the case may be, shall pay
for the cost of the survey.

40

7)

27.

28.

For the purpose of this Article an Artisanal Mining License should be regard
as a mining license.

WORK PROGRAMMES AND EXPENDITURE
1)

The work programme and expenditure proposed by the applicant for an
exploration license shall correspond to an appropriate level of operations,taking into account the area for which the application is applied, the type ofminerals and the potential nature of operations and eventual deposits which
may be concerned, and meet minimum work and expenditure requirements.

2)

If the work programme and expenditure proposed meet the specified
requirements, as stated in sub-article 1 of this Article the Licensing Authority
shall approve them. If the Licensing Authority believes that the work
programme is technically inadequate it shall so notify the applicant, stating thereasons for its opinion to improve the work programme.

3)

If the licensee fails in any year to fulfil the minimum work programme or
expenditure obligation, an amount equal to such unfulfilled obligation shouldbe immediately paid to the Government
in order to satisfy the deficiency
as specified by directive. The Licensing Authority may take such amount fromany guarantee provided by the licensee.

4)

If the licensee performs work or incurs expenditure in any year in excess ofthat for which he is obligated, such excess shall be credited towards
expenditure obligations, for the next succeeding annual period, provided thatat least a minimum agreed work programme and related expenditure is carriedout in the succeeding year, if applicable.

DEVELOPMENT AND PRODUCTION PROGRAMMES
1)

The development and production programme proposed by the applicant for amining license shall specify the manner in which the applicant proposes toequip and mine the deposit.

2)

The programmes shall be consistent with the objectives specified in Article 24of the Proclamation, unless a departure therefrom is justified and receives theprior written approval of the Licensing Authority, and shall provide for thedevelopment and production of minerals at the optimum rate consistent with
the nature and characteristics of the deposit, projected market conditions andother economic and technical factors.

3)

If the proposed development and production programme meets therequirements stated in sub-article 2 of this Article the Licensing Authority
shall approve them. If the Licensing Authority believes that the programme ismaterially inadequate taking into account all relevant circumstances, it shall so
notify the applicant, stating the reasons for its opinion to improve the proposeddevelopment and production programme.
41

29.

30.

EMPLOYMENT AND TRAINING
1)

The licensee shall promote the employment of Eritrean nationals as specified
in Article 25(l) of the Proclamation. If an Eritrean national cannot be foundwith qualifications and skills suitable to fill a position the licensee may employ
a qualified foreign national. The Licensing Authority shall assist the licensee
in obtaining all necessary Government permissions for the entry and sojourn offoreign nationals and their dependents in Eritrea.

2)

The level of employment and training shall be commensurate with the natureand extent of operations and shall not impair their efficient and economic
conduct.

3)

The holder of an exploration license shall submit annually to the Licensing
Authority, within thirty days prior to the end of each calendar year, theprogramme for employment and training to be followed during the following
year. Such programme shall not, in principle, be extensive, unless provided
otherwise by agreement.

4)

The holder of a mining license shall submit annually to the Licensing
Authority, within sixty days prior to the end of each calendar year, theproposed programme for employment and training to be followed during thenext year.

5)

The Licensing Authority shall notify the licensee, within thirty days after thereceipt of the proposed programme, if it believes the programme submitted toit pursuant to sub-article 4 of this Article is materially inadequate stating thereasons for its opinion to improve the programme.

6)

All employment and training programmes submitted pursuant to this article
shall be detailed by category of employee; unskilled, skilled, clerical, technicaland management.

HEALTH, SAFETY END ENVIRONMENTAL PROTECTION
1)

The licensee shall provide his agents and employees with appropriate work
clothing and protective equipment and shall ensure that they are properly
trained or otherwise qualified for the work.

2)

The licensee shall also provide appropriate health and medical facilities,
commensurate with the level and nature of operations, and he shall follow allnecessary procedures for the safe and prudent transport, storage, handling anduse of explosive and chemicals.

3)

The licensee shall immediately notify the Licensing Authority of any act or
occurrence which has resulted in loss of life or serious injury to any person or
which may jeopardize any property, the environment or operations and shall42immediately take such steps as are necessary to mitigate the impact of suchsituation.

31.

4)

Prior to expiration or termination of the license, the licensee shall fill, close,
block or otherwise render safe all tunnels, pits and other installations of apotentially dangerous nature.

5)

The holder of a mining license shall progressively restore or reclaim the land
covered by the license and, if applicable, a lease so that, prior to termination of
the license, the area has been completely restored or reclaimed for beneficial
future use, except if such progressive restoration or reclamation is not feasible
as determined by the Licensing Authority in writing or the Licensing Authority
approves otherwise.

6)

The holder of an artisanal mining license shall take all environmental
protection measures commensurate to his operations; in particular he shall fillpits and plant trees and shall not be allowed to use mercury or similarmaterials in his operation.

BOOKS, RECORDS AND REPORTS
1)

The licensee shall maintain in Eritrea during the term of the license:a)b)records with regard to weekly changes pertaining to:i)all operations;ii)

all employees (by category), labour conditions and accidents;iii)

inventories of all minerals produced, stored, treated, transported,
exported and sold; andiv)

inventories of all equipment, machinery and other material
physical assets.

duplicate and or residual or split samples of minerals taken from thelicense area and copies of all assays, other analyses and technical andother reports relating to the minerals in the license area, except for
duplicate samples collected during routine grade control operations inmining.

2)

The holder of a prospecting license shall submit to the Licensing Authority
annually within thirty days after the end of the year a report which documents
all information as specified by directives.

3)

An exploration licensee shall submit annually, within 30 days after the end of
the year, a report which documents all information as specified in theseRegulations.
43

4)

5)

32.

The holder of a mining license shall submit to the Licensing Authority on acalendar-quarter basis, within thirty days after the end of the period to which it
relates, a report which summarizes:a)all operations, including the nature of geological work and the progressand results thereof, and the conditions relating to production ofminerals and any change in the reserves and delineated resources of thedeposit;b)the total number of working days for each category of employee, as
specified in Article 29 sub-article 6 of these Regulations, and labour
conditions and accidents;c)

an inventory of all minerals produced, stored, treated, transported, soldand exported (including f.o.b. or other prices obtained) and destinationand nationality of buyers for all exports; price received for all sales;d)inventory of equipment, machinery or other material physical assets
and any change therein; ande)such other information as the Licensing Authority may reasonably
request.

The licensee shall also prepare and submit to the Licensing Authority annually
within thirty days after the end of the calendar year to which it relates, a reportcontaining a summary of the same information as required under subarticle 3of this Article.

PRESENTATION OF LICENSE
The licensee or his agent or employee shall produce the license or a copy thereof
certified by the Licensing Authority whenever so required by an appropriate public
officer, lawful occupant of the license area or the area covered by a lease or otherinterested person.

PART V
FEES, RENTALS, ROYALTIES AND OTHERPAYMENTS
33.

LICENSE FEES
1)

The license fees to be paid by an applicant for a license pursuant to Article 36of the Proclamation shall be as follows:a)

Prospecting License

Birr
44

500

b)
c)
d)
e)
2)

Birr
Birr
Birr
Birr

1500
6000
100
Nil

The renewal fee to be paid by an applicant for renewal of a license pursuant to
Article 36 of the Proclamation shall be as follows:
a)
b)
c)

34.

Exploration License
Mining Lease
Artisanal Mining License
Discovery Certificate

Exploration License
Mining License
Artisanal Mining License

Birr
Birr
Birr

1000
3000
100

RENTALS
The annual rentals to be paid by a licensee, pursuant to Article 37 (1) of the
Proclamation, for each square kilometre of the license area or any part thereof shall be
as follows:1)
2)
3)
4)
a)
b)

35.

Prospecting license
Exploration license
Mining License
Artisanal Mining License

Birr
Birr
Birr

50
200
600

Precious Minerals
Minerals

Birr
100
Birr 50ROYALTY
1)

The royalty to be paid by a licensee pursuant to Article 34 (1) of the
Proclamation shall be as follows:a)b)c)for precious minerals 5%
for metallic and nonmetallic minerals including construction minerals
3.5%
for geothermal deposits & mineral water 2%2)Royalties payable under sub-article (1) of this Article shall be computed andlevied ad valorem at the production site and shall be paid on a calendar-quarter
basis within thirty days after the end of the period to which they relate.

3)

Notwithstanding sub-article (1) of this Article, a lesser rate of royalty may beprovided by agreement where it becomes necessary to encourage mining
investments in areas given development priority.

4)

The Licensing Authority may, in circumstances it deems appropriate, cause thereduction, suspension or waiver of the imposition of royalty by requesting
Government to take such action.

45

36.

37.

OTHER PAYMENTS
1)

Birr 10 shall be payable, per page, for registration of documents in accordancewith Article 46 of the Proclamation.

2)

Birr 5 shall be payable, per page, for copies of records of cases heard inaccordance with Article 48 of the Proclamation.

3)

Birr 10 shall be payable for services provided in accordance with Article 14 ofthese Regulations.

PENALTIES
Any amount payable in accordance with Article 34 and 35 of these Regulations, which
is not paid when due may be subject to a fine of 1% for each month or part thereof
that such amount remains unpaid, without prejudice to any other recourse that the
Licensing Authority may have for late or non payment under the provision of part VIof these Regulations.

PART VI
INFRACTIONS AND SANCTIONS38.

PRIMARY INFRACTIONS
1)

2)

Any person who:a)without prejudice to subarticle (2) of Article 4 of the Proclamation
undertakes mining operations without having obtained the appropriate
license;b)

makes a false statement or fraudulent misrepresentation in connection
with the application relating to a license or fails to give notice of adiscovery pursuant to Article 12 of the Proclamation and Article 20(2)of these Regulations; orany Licensee who:a)conducts mining operations in a reckless, grossly negligent or wilfully
improper manner;b)commits repeated violations of obligations relating to environment,
health, safety of mining operations; orc)fails repeatedly and materially to meet administrative and fiscal
obligations;shall be guilty of a primary infraction.
46

39.

SECONDARY INFRACTIONS
A licensee who:1)

fails to maintain books and records or other documents or materials required or
maintains books and records which are materially incorrect or incomplete, fails
to file reports or other document or fails to give notices required;2)

conducts mining operations in a negligent manner or in a way which endangers
the health or safety of any person, the environment or a deposit, fails toobserve good mining practices generally, or fails to observe an obligation of alicense;3)

fails to make any payment when due to the Government; or4)fails to grant a duly authorized official of the Licensing Authority entry into
the license area, the area covered by a lease or access to any other site or
premises of the mining operations or to his books, records, other documents ormaterials, or fails to carry out a lawful order or instruction of such official;

Shall be guilty of a secondary infraction.

40.

ADMINISTRATION INFRACTIONS
Any licensee who:1)

fails to maintain books and records in a complete, accurate and current manner,
excluding such deficiencies which are materially incorrect or incomplete;2)

fails in a timely manner to file all reports and other documents or to givenotices required; or3)fails to carry out mining operations in a proper and prudent manner or toobserve regulations or directives, but which failure does not endanger thehealth or safety of any person, the environment or a deposit;

Shall be guilty of an administrative infraction.

41.

SANCTIONS
1)

The sanctions for an act or an omission which constitutes a primary infraction
under Article 38 of these Regulations may include the immediate revocation of
the license to which the infraction is related and fine not exceeding 5,000 birr,
and if the person commits another act or omission which constitutes a further
such infraction, the amount of the fine shall be doubled.

47

2)

If the licensee after being given notice of the infraction immediately takes
remedial action to correct an action or omission which constitutes a secondary
infraction under Article 39 of these Regulations, the applicable sanction shallbe a fine not exceeding 2,000 Birr. If, however, the person concerned cannot
or does not take remedial action, the amount of the fine shall be doubled. In
addition if the licensee does not take remedial action or if the infraction results
in an imminent or continuing danger to the health and safety of any person, theenvironment or a deposit, the Licensing Authority may immediately order the
licensee to suspend his mining operations pending correction of the infraction,and the license shall be suspended until such act, omission or condition isrectified.

3)

if the licensee does not immediately take remedial action after being given
notice of an act or omission which constitutes an administrative infraction
under Article 40 of these Regulations or if the infraction is not capable ofremedy, he shall be subject to a fine not exceeding 500 birr.

4)

If any act or omission which constitutes a secondary or an administrative
infraction is of a continuing or repeated nature, the Licensing Authority may
deem it to constitute a primary or a secondary infraction, respectively and thelicensee concerned shall be subject to the sanctions thus applicable.

5)

Any person who violates the provisions of these Regulations other than thosestated in this Article shall be subject to the penalties provided for under Article
50 (5) of the Proclamation.

PART VIIMISCELLANEOUS
42.

FORMS TO BE USEDThe forms to be used for the purposes of the Proclamation and these Regulations shallbe provided in the first schedule to these Regulations and shall be completed inaccordance with the directions and instructions printed on them.

43.

DISPUTE SETTLEMENT PROCEDURES
1)

The following procedures shall be applicable in hearing and deciding casefalling under the jurisdiction of the Licensing Authority pursuant to Article
48(l) of the Proclamation:a)

The person complaining shall file with the Licensing Authority acomplaint form as specified memorandum summarizing the disputeand supporting his allegations. The form shall state the nature of thecomplaint and the relief sought.

48

2)

44.

b)

Upon receipt of the complaint form the Licensing Authority shall givenotice thereof to the adverse party, forwarding a copy of the form
received, and it shall indicate to both parties the time and place atwhich the dispute shall be heard.

c)

At the time and place designated by the Licensing Authority the parties
shall attend and state their case before it and submit evidence insupport thereof. The Licensing Authority shall take note of allevidence given. The Licensing Authority may adjourn the hearing to
any other time and place and may at the original hearing or any
adjournment thereof proceed in the absence of either party.

d)

The Licensing Authority may, at any time subsequent to the filing of adispute and prior to its decision thereof, cause to be seized, retained
and safeguarded any minerals or other property subject to the dispute or
it may require a party to provide a guarantee for its value.

e)

The Licensing Authority shall inform all parties of its decision
regarding the dispute and shall provide each party with a copy of therecord of such proceedings.

f)

The Licensing Authority may transmit a copy of its decision and therecord regarding the hearing related thereto to the court of competentjurisdiction over the subject matter of the decision, and the court shallenforce the decision to the extent provided by law.

g)Fees and costs in connection with any such proceeding may be
imposed upon the losing party.

h)

The Civil Procedure Code of Eritrea regulating proceedings before acourt of first instance in civil matters shall apply to proceedings before
the Licensing Authority without prejudice to the provisions of this subarticle.

The Licensing Authority shall keep a record of all disputes, their proceedings
and its decisions relating thereto.

REDUCTION OR EXTENSION OF TIME
Notwithstanding any provision of these Regulations which may specify a period oftime within which an act is to be performed, the Licensing Authority may for goodcause provide for a shorter or longer period, provided that such reduction or extension
shall not jeopardize the rights of a licensee or endanger his ability to perform theduties and obligations pursuant to the license or under the proclamation.

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45.

GOVERNMENT ASSISTANCE TO LICENSEESThe Licensing Authority may, where it deems appropriate provide support. andassistance to holders of artisanal and mining licenses and the holders of Discovery
Certificates in the following manner:

46.

47.

1)

identify and delimit deposits and reserve the minerals and the areas concernedfor operations to be undertaken by such licensees;2)

provide technical and administrative assistance, support and training;3)

assist in obtaining financial support for such operations;4)assist in the voluntary formation and the functioning of mining cooperatives;and5)

advise on the treatment, transportation, storage and marketing of minerals
produced by such licensees.

POWERS AND DUTIES OF THE CONTROLLER
1)The Controller shall have the primary responsibility with regard to thetechnical and administrative supervision of mining operation in accordancewith directives issued by the Licensing Authority and such other duties as are
specified under the Proclamation.

2)

Without prejudice to delegations specially given to other officials of theLicensing Authority and the provision of sub-article 3 of this Article theController is hereby vested with all powers necessary to implement theprovisions of these Regulations in accordance with directives issued by the
Licensing Authority. However, any complaint against the decision of theController may be submitted to the Head of the Licensing Authority.

3)

Except where the Controller or any other officer of the Licensing Authority
has been specifically delegated, all disputes submitted in accordance with
Article 42 of these Regulations shall be heard and decided upon by the Head of
the Licensing Authority.

EFFECTIVE DATE
These Regulations shall enter into force on the date of their publication in the Gazetteof Eritrean Laws.

Done at Asmara, this 20th day of March, 1995.
Government of Eritrea.
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