Mining (State Participation) Regulations, 2022.

These Regulations consisting of 13 articles organized into six Parts, outline the framework for the Government's involvement in mining operations through non-dilutable free carried interest shares. They apply to all mining companies or individuals holding a Mining Licence or Special Mining Licence. The Government is entitled to at least 16% non-dilutable free carried interest shares in the equity capital of any mining interest, potentially increasing based on factors such as tax expenditures and public infrastructure contributions. The Treasury Registrar, in consultation with various Government bodies, manages the acquisition and control of these shares. The Government, by holding these shares, enjoys rights such as receiving dividends, participating in company meetings, and appointing directors, without the obligation to contribute equity capital. The Regulations also mandate regular reviews and adjustments of tax expenditures and shares held, disclosure of relevant information by mining companies, and detailed principles for joint venture arrangements between the Government and mining entities. Additionally, reversionary mineral rights, which revert to the Government by law, are incorporated into the framework, ensuring a structured approach to state participation in the mining sector.
Key points include (i) the Right of First Refusal (ROFR) allows an offeror to sell their interest to a third party if an offeree shareholder does not respond within a specified period; (ii) Companies are required to submit balance sheets and profit and loss accounts, signed by two directors, along with a director's report on the company's affairs and dividend recommendations; (iii) the conduct of meetings is specified, including the appointment of a chairman and the preparation of minutes by the Company Secretary; (iv) the company is classified as a private entity, limiting membership to fifty individuals (excluding employees) and prohibiting public invitations to subscribe for shares.
The six Parts are entitled as follows (1) preliminary provisions; (2) reversionary mineral rights; (3) State participation in mining; (4) free carried interest shares; (5) principles of mining joint venture arrangements; (6) management of mining joint venture entities including, among other things, the Shareholders Agreement to establish the terms for the governance and ownership of the Company and its Shares, as well as the rules for any Share transfers.