Mining royalties and the sector's regulatory risk

The Mining Law (Decree 48-97, 1997) provides for reconnaissance, exploration and exploitation licenses. Its article 63 sets the royalty at 0.5% to the State plus 0.5% to the municipalities (1% in total); the materials in article 5 pay 1% to the municipalities. There have been recurring proposals to raise royalties (to 5%, for instance) that have not been passed. The documented regulatory risk is suspension of licenses for want of prior consultation under ILO Convention 169: the Kappes case (ICSID ARB/18/43) grew out of a license suspended on that ground. Royalties actually paid to the State were not collected; the dossier proposes tracking them in MEM's Mining Statistical Yearbook.

The research is written in English; quoted figures, source names and the titles of legal instruments stay in the language their source published them in.