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Investment Attraction vs. Government Benefits: Balancing Stakeholder Interests in Mining

This document examines the interplay between investment attraction and government benefits in the mining sector, focusing on the expectations of various stakeholders, including the government, investors, the general public, and environmental groups. It discusses the legal framework supporting investment initiatives, the treatment of investors post-investment, and the protection of investor rights amid potential conflicts. Additionally, it highlights government revenue strategies, community protection issues, and the challenges in tax administration impacting the sector’s efficiency.

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Investment Attraction vs. Government Benefits: Balancing Stakeholder Interests in Mining

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  1. Group 2 -Investment Attraction vs Government Benefits -Expectant Stakeholders: Government (revenue/expenditures) Investors/Mine Companies (profit, growth etc) General Public (employment, compensation, business motives) Environmental Groups e.g CSOs (environmental protection,

  2. Attracting Investment 1 a : Potential Investors in setting up new initiatives • No difficulties, law supports it and is conducive • Legal entity, prove of fin. and tech capacity • Stages/time for license application (30 days), but…. 1b: Treatment of investors after investment (Taxation) • Exemptions for exploration, but only 3 years for exploitation • Flat rate contributions at set rate – fairness & equity issues 1c:Protection of Investors (Resolving Conflict) • State declares intention not to…on expropriation but is vague (gives state room to do otherwise) - weak • Friendly resolutions, with arbitration for any further conflicts • International Decree (CIDIR 1996, ACICP - Mali is francophone)

  3. Maximizing Benefits 2a: Government Ensuring constant flow of revenues - For exploitation, 10% free-carried share belongs to state; - Tax on corporate income during exploitation - Flat rate contributions at set rate for exploration 2b: Community protection by Government - state can purchase additional 10% stake ( in cash)….but to public?? - No more than 3 licenses per company within the same district - Law does not adequately address issue of community protection regarding (compensation, relocation costs, customs, employment), EMP, EIA needs 2c: Government Difficulty in Tax administration - Complexity of managing Multiple taxes; if mine ores get finished before paying taxes (reclamation fees); - Housing taxes and statistical fees ???

  4. Summary – comparisons with other countries • Complexity and difficulty to administer e.g from application process to exploitation processes– encourages corruption at different levels • Environmental issues are not covered • Validity of license and termination not adequately specified • Full document was not available for deeper reference

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