Overview of Sierra Leone’s mining legislation

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The legislative framework governing Sierra Leone’s mining sector includes, among others: the Mining Act, 2022; the Mines and Minerals Development Regulations, 2023; the National Minerals Agency Act, 2012; the Extractive Industries Revenue Act, 2018; the Sierra Leone Mines and Minerals Development and Management Corporation Act, 2023; and the Environment Protection (Mines and Minerals) Regulations, 2013. These instruments collectively regulate the sector’s administration, revenue collection, state participation, environmental protection and social responsibility obligations.

Licence types

Sierra Leone’s principal mineral rights, their durations and extent of rights are summarised below.

Reconnaissance licence. This applies to an area not exceeding 10,000 square kilometres, is available only to corporate entities, and is valid for a maximum of one year, renewable. The holder is granted non-exclusive rights, including: (1) to enter or overfly the reconnaissance area to conduct approved survey operations; and (2) to collect and remove samples from the area, provided the quantity does not exceed the limit reasonably required for reconnaissance.

Exploration licence. This licence is for discovering economically viable and extractable mineral deposits, defining their quality and volume within the licensed area, and assessing the feasibility of production. Available solely to corporate entities, it is valid for a maximum initial term of three years. It may be renewed twice for periods of up to two years each, in respect of not more than 125 sq km of the exploration licence area.

The licence holder is granted exclusive prospecting rights within the licensed area, including: (1) access to and overflight of the area to conduct authorised prospecting operations; (2) drilling and necessary excavation activities; (3) collection and removal of samples for analysis, within reasonable quantities required for prospecting; (4) use of water and timber for prospecting activities; and (5) establishment of camps and temporary installations (including within water bodies), without conferring any claim to land rights.

Small-scale mining licence. This licence applies to mining areas of 50 to 200 hectares. Applicants must be either: a legal entity registered or incorporated under Sierra Leonean law with at least 30% of its shares held by Sierra Leonean citizens; or a co-operative registered under Sierra Leonean law with at least 30% of its members being Sierra Leonean citizens. The licence is valid for a maximum initial term of four years and may be renewed in four-year increments until the commercial lifespan of the deposit is exhausted.

The licence holder is granted exclusive mining rights within the licensed area, including: (1) small-scale mining operations; (2) reasonable mineral exploration, extraction and processing; (3) sale or export of minerals and tailings (including those extracted under the mining plan, or extracted in early stages and remaining within the licensed area); (4) construction of equipment, plants, machinery and buildings for exploration, extraction, transport, storage and processing of minerals; (5) stockpiling or depositing of minerals and waste materials; and (6) use of water and timber.

Large-scale mining licence. This licence applies to mineral extraction operations exceeding 200 hectares in area, involving either open-pit mining deeper than 20 metres, or underground mining activities including shaft sinking, tunnel boring, and other excavations wider than 20 metres. It is available only to legal entities, with an initial validity of up to 25 years. The licence may be renewed in increments of up to 15 years until the commercial lifespan of the deposit is exhausted.

The licence holder is granted exclusive mining rights within the licensed area, including: (1) large-scale mining operations; (2) reasonable mineral exploration, extraction and processing; (3) sale or export of minerals and tailings (minerals and tailings from early-stage extraction remaining within the licensed area are state-owned, but may be sold or exported by the licence holder under directives from the minister of mines); (4) construction of equipment, plants, machinery and buildings for exploration, extraction, transport, storage and processing of minerals; (5) stockpiling or depositing of minerals and waste materials; and (6) use of water and timber. Additional mining licence categories include the artisanal mining license, the dealer licence and the exporter licence.

State participation

The Mining Act, 2022 establishes clearer requirements for state participation in mining projects. For holders of large-scale mining licences, the state shall participate in the form of a corporate entity, acquiring a 10% non-dilutable free carried interest. Additionally, it may acquire up to 35% further equity under terms agreed with the holder.

Transfer and charging of licences

As stipulated by Sierra Leonean law, the exploration licence, the small-scale mining licence and the large-scale mining licence may be assigned, transferred, leased, pledged or mortgaged, subject to the approval by the minister of mines, provided the transferee is an eligible applicant. Conversely, the reconnaissance licence, the artisanal mining licence, the dealer licence or the exporter licence shall not be subject to assignment, transfer, lease, pledge or mortgage.

Licence holder obligations

Sierra Leonean law imposes a range of fiscal, environmental and social obligations on mineral right holders including: the payment of royalties, mineral resource rent tax, annual licence fees and other charges; ensuring safe production practices and a healthy working environment; conducting environmental impact assessments and obtaining relevant approvals; and fulfilling community contribution commitments and rehabilitation obligations to ensure sustainable development.