Thursday, June 29

Morocco plans new mining law to boost investment

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By Souhail Karam

RABAT (Reuters) – Morocco plans to enact a new mining law next year, overhauling rules that are 60 years old, to help attract investors, boost exports and ensure companies respect its labour and environmental laws, official sources told Reuters.

The reform will not affect phosphates, the country’s top export earner and a resource that is monopolized by state-controlled Office Cherifien des Phosphates (OCP).

The move follows a surge in Morocco’s current account deficit to a three-decade high and a series of protests by residents in mining sites, some of which evolved into riots and threatened to bring local mining operations to a halt.

“The new law is the first step of a national strategy that aims to boost the role of the mining sector in the economy,” Mines and Energy Minister Fouad Douiri told Reuters, adding that mining activity, excluding phosphates, contributes less than 1 percent of the country’s $100 billion gross domestic product.

He declined to provide details on the strategy, which he said would be divulged before the end of the summer.

Morocco has the potential for mining activity mostly in magnesium, zinc, silver and cobalt, but outdated legislation, a lack of incentives, poor mapping, bureaucracy and the inaccessibility of the most promising sites have hampered development.

“Mining in Morocco needs transparent and even-handed processes and roads,” a private industry operator said, who noted that little over 30 percent of the country’s area has been mapped for mineral deposits.

Mining activity has been dominated by Managem, which is majority-owned by an investment vehicle controlled by the country’s ruling monarchy. Managem and its affiliates extract gold, copper, silver and other metals.

In emailed replies to Reuters questions, the Mines and Energy Ministry said a draft for the new law would soon be submitted to a council of ministers and then to parliament.

PROTESTS

A senior government source said the law would be enacted next year to replace the existing one, issued in 1951.

“The goal is to unleash the mining potential of the country to create jobs and boost exports under a socially responsible framework,” the source said.

“The new law should link the award of exploitation permits to objective-oriented requirements, transparent tender processes and the enforcement to the letter of labour and environmental regulations,” the source added.

The reform aims to endow the mining sector with “a modern, competitive and attractive legal framework”, the ministry said.

“It will simplify the management of national mining resources and encourage their development … by boosting mining research to discover new deposits and consolidate the mining sector’s contribution to economic and social development,” it said.

The new law will, for example, require miners to produce environmental impact studies, the ministry said.

A subsidiary of Managem, silver miner Imiter, has cut production by as much as 40 percent after residents living near its mine in the arid southwest have interrupted its supply of water since August last year.

Their grievances include depleted water resources in the area and a lack of basic amenities, which they blame partly on Imiter, the biggest single employer in the region.

Earlier this year, the phosphate monopoly OCP launched its biggest recruitment campaign after a series of youth protests on the lack of jobs. Around a third of Moroccans under age 35 are unemployed.

 

 

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