Oman’s much-awaited new mining law came into effect last month, raising hopes that it will help attract new investments and revitalise the sultanate’s mining industry.
Speaking at a media briefing organised at its premises last week, H E Eng Hilal al Busaidi, CEO of PAM said the new mining law has been framed keeping growth of the sector in mind and also with an aim to encourage investments in the sector by removing bottlenecks.
Some of the biggest advantages the new legislation could provide to mining companies include; licenses granted for much longer period, an increase in concession area provided under the license, and makes it easier for mining operators to obtain bank finances, said H E Busaidi.
Agreeing to this, Mohammed Shabibi, vice chairman, Gulf Mining Group said, the new mining law has many provisions that are going to be very helpful for serious miners in the country. Earlier a mining license was granted for one year only, and after that the license was renewed for a similar time up to three years only.
“Now, this has changed and licenses will be given for much longer period and that will help companies operating in the sector to avail reliable financial help from baking institutions,” said Shabibi while explaining that the new legal framework is backed by concession agreements ranging from 20-30 years and this will make it possible for investors obtain bank finance by showing them as collateral.
H E Busaidi further explained that there are three key advantages linked to the new legislation; first it expedites the process of obtaining mining licenses, the awarding of concession blocks against competitive bidding, and the processing of applications for no-objection certificates in a time-bound fashion. Second it outlaws illegal mining activities and demands that all mining operations be carried out in a professional manner. And the third one is that it greatly strengthens the ability of the authority to manage the sector in a supportive way.
He also highlighted that under the new law, mining license holders are liable to forfeit their rights to their concessions if they fail to make the requisite initial investments in exploration or prospecting activities.
Besides these factors, under the new companies engaged in mining activities are required to pay the equivalent of one per cent of their royalty towards a CSR fund, which will be administered by a professionally-run government agency on behalf of the investors, said Shabibi.