Sharing of mining rents between investors and states.

Active • December 01, 2014

In partnership with the Centre for study and research on international development (CERDI), the International Centre for Tax and Development (ICTD), the Ecole Normale Supérieure de Lyon (ENS Lyon) and the French Ministry of Europe and Foreign Affairs (MEAE), Ferdi works on the sharing of mineral resource rent between States and mining investors in Sub-Saharan Africa. Indeed, the mining sector weighs heavily in the tax revenues of many resource-rich African countries. Mining tax systems must therefore both attract investors and ensure sufficient revenues for States.

After having carried out an inventory of studies on the subject (Laporte and De Quatrebarbes, 2015), Ferdi has built up a large database, which lists the main tax laws and details the main taxes payable by mining companies over a long period of time (Laporte, De Quatrebarbes and Bouterige, 2015). This database has been available to the public since September 2016 and is hosted on its own website since October 2018. Updated annually, it now covers 22 French-, English- and Portuguese-speaking countries and helps improve the transparency of tax information in the extractive sector. 

Since 2020, through the IHEDD, Ferdi has also been offering online training to understand the sector’s issues and learn how to model the sharing of mineral resource rent.

Gold-mining sector – 22 African countries – 1980-today

The Ferdi provides the first legal and tax database that lists the tax system applicable to industrial gold mines in 22 African producing countries since the 1980s and a simulation tool for sharing the mineral resource rent between State and investors.

The tools provided make it possible to: 1) understand the characteristics of the mining taxation, 2) know the evolution of the mining taxation, 3) compare the mining taxation between African countries, 4) compare mining taxation between projects of the same country, 5) assess the sharing of the mineral resource rent between State and investors.

View the database: https://fiscalite-miniere.ferdi.fr/en

The FIMES project aims to strengthen the capacity building of governments in eight resource-rich African countries (Guinea, Liberia, Mali, Madagascar, Niger, Sierra Leone, South Sudan, and Zimbabwe) and to use financial and fiscal modeling for the extractive sector (mining, oil, and gas) projects. 

This project was built in collaboration with the Columbia Center on Sustainable Investment (CCSI) for the African Development Bank.

The project ran for 2 years, from September 2020 to August 2022.  It included a three-part training cycle: 

• A preliminary e-learning training workshop to allow participants to update their knowledge on modeling.
• A second distance learning session on fiscal policy issues and the use of rent-sharing models 
• A week of face-to-face training in each country, to adapt the model to the specificities of each country and allow for experience sharing.

The project benefited 160 participants (20 people for each of the 8 countries). At the end of the scheduled training cycle, the project may be expanded to a wider audience, including other sector actors, depending on the AfDB's desired policy. 

The Institut des Hautes Études du Développement Durable (IHEDD) has supported the development of a learning and sharing platform dedicated to the project.