- The substratum of the Senegalese territory offers great varieties of mineral substances including the noble metals (gold and platinum), the base metals (iron, copper, chromium, nickel), industrial minerals (industrial phosphates, limestone, salts, barytine etc.) heavy minerals (zircon and titanium), decorative stones and building materials etc.
- Senegal has a wealth of diverse and unexploited mineral deposits which until recently have lain dormant. Previously Senegal’s mining industry was dominated by the exploitation of phosphates, industrial limestone and attapulgite. Phosphates in particular formed one of the key components of the Senegalese economy since the time of independence in the 1960’s.
- However, thanks to a new mining Code adopted in 2003 and to the significant investment promotion driven by the Senegalese government and its development partners, the diversification of mining activity is growing through the exploration and the exploitation of gold, iron ore, uranium and copper in the south-east of Senegal as well as the development of zircon and titanium in the littoral zone.
SENEGAL SET TO BECOME ONE OF AFRICA’S LEADING GOLD PRODUCERS
- The production of the first ingot from the Sabodala gold mine in 2009 celebrates the exploitation of a discovery made nearly 50 years ago; previously it had small levels of production, now it can make a real contribution to the Senegalese economy. Today the exploitable resources are estimated to contain 1.63 Moz of gold, with resources of 3.55 Moz.
- A company had been awarded an exploration license for the surrounding area of 230km2. Twenty pockets of mineralization had been found, with four potential fields, current resources are valued to 2.24Moz.
- Adjacent to these two aforementioned projects are 25 gold research permits, occupied by eight foreign companies and nine domestic companies.
LAW No2003-36 of 2003,CONCERNING THE MINING CODE, INTRODUCED SEVERAL INNOVATIONS, INCLUDING
Fiscal incentives allowing the holder of a mining concession to benefit from exemptions for a seven- year period, with the aim of encouraging the prompt realization of investments and commencement of production.
- Total exemption of all taxes for the holder of a research permit during the period of validity of the permit and any renewals.
- Exoneration of all Customs duties and taxes, including VAT and the Conseil Sénégalais des Chargeurs (Senegalese Council of Shippers, COSEC) withholding tax on:
- Equipment, materials, supplies, machines, equipment and utility vehicles included in the registered program, and replacement parts and functional items not produced or fabricated in Senegal, which are specifically destined to be used in mining research operations and which are vital to the realization of the research program.
- Fuels and lubricants for fixed facilities, drilling instruments, machines and other equipment destined for research operations under the permit granted.
- Petrol products for producing energy used during the research program.
- And Spare parts and pieces for machines and equipment, specifically used in the realization of the research program.
Upon the certified presentation of a research permit, the equipment, materials, supplies, machines, equipment and utility vehicles specifically destined for mining research operations, machines and construction vehicles, which can be re-exported or sold after use, temporarily qualify with the total suspension of duties and taxes on importation and exportation. Specific benefits granted during the development phase are during the period of the realization of investments and the commencement of an exploration or the expansion of the production capacity of an existing mine, the exploration permit holder or the beneficiary a small mine exploration authorization and the contractors working on its behalf benefit from exemption from taxes and duties including VAT and COSEC;
- On materials, equipment, supplies, machines and utility vehicles included in the registered program and equipment directly destined for mining operations.
- Fuels and lubricants for fixed facilities, materials and drills, machines and other equipment destined for mining operations.
- And spare parts and pieces for machines and equipment, specifically destined for mining operations. Financial benefits are granted in the development phase. Throughout the duration of the exploration, holders of exploration or concession contracts or the beneficiaries of a small mine exploration authorization are exempted from the exploration tax on products issuing from their exploration activities within the scope of the awarded title.
The holder of an exploration permit is exempted for three years, and the holder of a mining concession is exempted for seven years from company tax until recovery of all bans and exploration expenses, as well as exemptions from:
- VAT on goods and services purchased from local or foreign suppliers
- Entrance fees
- Minimum basic tax
- Property taxes except for residential property
- Basic tax payable by employers; and from duties and taxes when setting up a new company or raising capital
Located in West Africa, Senegal has an estimated population of 13 million people and a total area of approximately 197,000 km2.
Of the country’s population, 94 percent are Muslim and 5 percent are Christian (mostly Roman Catholic). While French is the official language, the Wolof, Pulaar, Jola and Mandinka dialects are also spoken. The capital, Dakar, is on the most westerly point of the coastline of Africa. Senegal gained its independence in 1960, following about 75 years of French rule. It is a democratic republic governed under multiparty rule based on the French civil law system, making the country a location of choice for many foreign embassies and international banks as the headquarters for the West African region.
Senegal lies within the Sahel, the semi-desert, or savannah region that forms a broad band across Africa between the Sahara desert to the north and the forested countries to the south. The landscape is generally low, rolling plains rising to foothills in the southeast. The climate is tropical, with a hot and humid wet season (May-October) and a dry season (November-April) dominated by hot Harmattan winds. Senegal’s economy is based on agriculture, primarily groundnuts, cotton, grain crops, livestock and fishing; industry, primarily food processing, gold, iron ore and phosphate mining, fertilizer and cement production and downstream petroleum products; and services, which are the main contributor to Senegal’s GDP.
The estimated 2011 GDP breakdown by sector is: agriculture 15.4%; industry 22.6% (minerals industry approximately 20%) and services 61.9%. The minerals industry is responsible for approximately 20% of Senegal’s export earnings. Foreign exchange is also derived from tourism. Agriculture supports over three quarters of the labor force. The government is generally pro-mining and passed a new Mining Code in November 2003. Under the Mining Code, appropriate governmental authorization is required to undertake any form of mining activity. In this regard, the right to explore minerals is conferred only by a permit of exploitation or a mining concession. An exploration permit for mineral exploration activities is granted for a period not exceeding three years, and is renewable. During the exploration phase, the permit holder is exempt from sales tax and duties on imported equipment and supplies necessary for exploration activities, as well as on fuel used for operation of stationary installations.
Following exploration success, the permit holder may enter into a mining contract agreement with the State, which provides the State a free carried interest of 10% of the project. Under the Senegalese Mining Code, numerous fiscal incentives are offered to mining license holders, including a minimum seven-year exemption from income tax, amongst other tax exemptions, and the opportunity to secure a lease of up to 25 years for a major project. All mining activities are subject to a royalty of 3% of the value of the mine site payable to the Government. Foreign mining companies are allowed to expatriate profits.