Mining Legislation and Regulations

2. The objectives of minerals and mining legislation 

In new or emerging markets, the role of legislation is particularly critical to underscore predictability and build market confidence.

Well-drafted minerals and mining legislation will help operationalise government policy for the sector. Legislative governance objectives should be well-defined and typically include:

  • Defining institutional roles and responsibilities

  • Providing the legislative context for minerals development

  • Enabling mineral sector development to be optimised

  • Establishing a clear minerals investment environment

  • Addressing stakeholder concerns

More detail on actions to meet these objectives is given in the sections that follow.


Defining institutional roles and responsibilities

Legislation provides government with an opportunity to set out clear institutional roles and responsibilities with respect to the mining and minerals sector.

Governments typically abide by Constitutional provisions and/or adopt “Civil Service” and “Government Structure” laws. However, especially in new and emerging mineral markets, where institutional emphasis and portfolios may be evolving, legislative clarity on the institutional roles and responsibilities of various government offices can reduce the likelihood of confusion and disputes.

Issues for consideration in relation to institutional roles and responsibilities include the government and institutional framework, the lead government agency or institution and the role of civil society and non-state actors.

The Mining Institutions Topic provides a more detailed overview of this area.

Government/State Institutional framework

In describing the institutional framework that will facilitate mineral activities, it is useful to break down the levels of government/state institutions. While not essential, it is also useful to include some legislative confirmation of these formal government institutions in minerals-specific legislation.

Examples are included in this table.

To note, some jurisdictions simplify the categorisation of government institutions into “national” and “sub-national”. The latter encompasses regional/provincial, district/state/tribal.

Lead government agency/institution

Government’s lead agency or institution responsible for the regulation of the minerals sector is typically a ministry or government department, often referred to as the line ministry.

Within such ministry or department, internal institutional structures determine how mineral and related investments are managed. While not essential, it is useful to include some legislative confirmation of these internal structures. Examples are included in a document that can be found here.

Civil society/non-state actors

It is not essential to legislate the role of civil society and non-state actors in the minerals sector. However, especially in many new and emerging minerals markets, some legislative clarity that goes beyond policy and programmes to represent in concrete terms how government will regulate sector operations throughout the course of mine development has proven to be of great value. Examples are provided in this table.


Providing the legislative context for minerals development

The legislative system should provide the overall context for investment, labour, land environment and social protection requirements. The extent of issues to be addressed in minerals and mining legislation depends on the status of the legal framework and the level of development of supporting legislation in which the sector is being developed, as illustrated in this table.


Optimising mineral sector development

The ultimate objective of all sector legislation should be to optimise mineral development but with the essential caveat that development should not take place at the expense of people or environment. The role of legislation in optimising mineral development can be critical where stakeholders understand and can abide by the legislation and where government has enforcement mechanisms in place to ensure legislative compliance.

Areas where legislation can frame sector operations for optimal results are included in this document.

Establishing a clear minerals investment environment

Legislation should provide investors and those impacted by mineral investments with a clear set of objectives, guidelines, and penalties relevant to each phase of mineral development.

Examples are given in this table.

For each aspect of the law presented in legislation, there typically exists an opportunity for investors to circumvent the rule. Legislation should take into consideration any gaps that may result from incomplete legislative guidance.

Most gaps occur in under-regulated markets. Typical examples are given here along with guidance on how to address them in legislation.


Addressing stakeholder concerns

Virtually all segments of society may be categorised as stakeholders with respect to the development of minerals. Mining impacts affect not only mine workers, license holders and mine communities but can have wider in society, politics and the economy.

Examples of stakeholder groups that are typically considered in the preparation of legislation include:

1. Government

At all levels of government, there is pressure to develop minerals in a way that generates revenues for the benefit of government operations. Government looks to legislation as a tool through which to communicate its primary objectives and “rules of the game” for start-to-finish mine operations. Globally, governments have acknowledged that stand-alone minerals laws do not suffice and that a comprehensive legal framework must be prepared to address the broad array of issues relevant to minerals development.

2. Licence holders

Licence holders are typically, but not always, mine operators. Particularly with respect to small, medium and large-scale mining operations, licence holders are often investors seeking to generate profits from mining. These stakeholders seek legislative guidance on rights and requirements of license categories, revenue management and reporting obligations. They will also be concerned with dispute resolution mechanisms that will minimise the need to file court actions.

3. Mine operators/companies

Operators typically look at legislative guidance on specific operational issues including mine safety and worker health requirements, reporting requirements, equipment standards and community interactions.

4. Mine workers

While some mining jurisdictions have trade unions or worker associations, others do not. Mine workers will benefit from clearly legislated work environment requirements, notice provisions and fair wages, where these are laid out in legislation. Legislation guiding contract and grievance processes as well as entitlements relevant to extremely dangerous working conditions and disability promotes a work environment in which legitimate investors will seek to operate.

5. Mine communities

Legislative impacts on mine communities affected by locally-based minerals development vary, but fundamentally they should address issues of resettlement, benefits sharing, environmental protection and safety. Increasingly, mining jurisdictions require community development agreements to be entered into by mine operators/companies and communities. Legislative certainty on the basic terms for these agreements and their enforcement mechanisms is necessary. Mine community concerns relating to the potential of mining activity to change local culture as a result of mining activity (e.g. due to the influx of outside investments and/or workers) are not easily protected in legislation. These concerns are more adequately addressed through well-regulated investments (e.g. those with provision or local employment, local content, benefit sharing, language requirements, etc.

6. Civil society

There may be mining impacts to consider for citizens resident outside mining areas, for example including environmental impacts to running water, soil and air as well as offshore mining impacts. Many citizens are also concerned with the financial and development benefit of harnessing mineral resources and whether the benefits will be captured locally, in-country, or translate to gains for international investors. An array of legislative protections may address these concerns through clear legislative guidelines on financial requirements, revenue management, environmental protection and investment legislation.

7. International community

Even where foreign investors are not directly involved in mineral development, the international community may take an ongoing interest in how a mining jurisdiction operates. Concerns relating to environmental impacts, the treatment of mine workers and overall investment transparency are topics that the international community closely monitors. The Extractive Industries Transparency Initiative (EITI) is an example of an international program that has taken on policy and even legislative confirmation in mining jurisdictions throughout the world.

A checklist of the potential legislative concerns of these stakeholder groups is provided in a table that can be accessed here.