Mining in Afghanistan - Legal Framework

Legal Framework

A new mining law was passed in 2006 and as of 2006 regulations were being developed to provide the framework for more formal exploration for and mining of minerals. The process of applying for mineral rights was also being revised as of 2006. All minerals located on or under the surface are the exclusive property of the Government, except for hydrocarbons and water, which are regulated under separate laws. The principal role of the Government with respect to minerals is to promote the efficient development of the mineral industry by the private sector. The Ministry of Mines and Industries is responsible for the administration and implementation of the Mining Law. The Law provides investment security to the holder of a mineral right. The Government cannot expropriate mineral rights without adequate compensation in accordance with international norms. The Law also gives the mineral royalty rates, which range from 5% of gross revenue for industrial minerals to up to 10% for gemstones. Other changes in Government policy in 2006 included the legalization of the gemstone trade, Government control of the gemstone industry, and encouragement of investment in mining.