Senegal revokes 71 mining licences and steps up its reform efforts

Prime Minister Ousmane Sonko announced, during a press briefing at the end of last week, a wide-ranging plan to clean up Senegal’s mining sector. Key measures include the imminent revocation of 71 mining and quarrying licences, as well as the possible non-renewal of concessions held by Industries Chimiques du Sénégal (ICS). This initiative is part of a wider regional trend, with several West African states regaining control of their natural resources.

The authorities have identified serious irregularities at several operators. The case of ICS, which operates several phosphate deposits, is particularly telling. According to the Prime Minister, the company’s failure to meet its tax and royalty obligations – the company was acquired in 2014 by the Indonesian group Indorama – is estimated to have cost the state around 1,075 billion CFA francs (nearly 1.88 billion dollars) between 2014 and the present day.

The 71 licences in question include 14 gold mining licences and one licence relating to mineral sands. The licence holders are accused of failing to meet their investment commitments and regulatory requirements. The head of government did not specify whether these were exploration or production licences, nor did he reveal the names of the companies concerned. He did, however, indicate that future licences would be awarded to ‘much more serious’ partners.

This move comes against a backdrop of mounting fiscal pressure. According to the International Monetary Fund, Senegal’s actual public debt could reach 132% of GDP. In 2023, the extractive sector (mining, quarrying and hydrocarbons) accounted for 31.89% of national exports and 4.7% of GDP, according to the Extractive Industries Transparency Initiative (EITI).

Senegal is thus joining a trend set by its neighbours. Last year, Guinea revoked more than 100 mining licences. Mali withdrew more than 90 exploration licences last October and renegotiated several contracts. In Niger, the authorities have regained control of the SOMAIR mine (operated by the French company Orano) and withdrawn the licence for the Madaouela project held by GoviEx, as part of a move to rebalance profits.

These initiatives are all aimed at protecting national interests, promoting more balanced partnerships and maximising tax revenues. In Senegal, the reform extends beyond the mining sector alone: contracts in the hydrocarbons and infrastructure sectors are also being subject to a thorough review.

The government is also drafting a new Mining Code to replace the 2016 version. The precise details of this legislation, as well as the actual impact of the announced revocations, will become clear in the coming months.

The experience in Guinea, however, calls for caution: following the revocation of certain licences, the Emirati company Axis Minerals initiated arbitration proceedings seeking $28.9 billion in damages. Several major foreign operators are active in Senegal, including the French company Eramet and the gold producers Endeavour Mining, Resolute Mining and Fortuna Mining.

By asserting its sovereignty over its resources, Dakar hopes not only to make up for a historic shortfall in revenue, but also to lay the foundations for a mining sector that is more transparent, more accountable and more profitable for the national economy. The course of events will be closely watched by both international investors and regional partners engaged in the same reform process.