Algeria is set to introduce a new mining law aimed at attracting foreign investors. To achieve this, the draft law on mining activities, approved by the Council of Ministers on February 9, proposes removing the mining sector from the list of strategic sectors where foreign investment is subject to the 49/51 rule.
This rule limits foreign capital to a maximum of 49% in projects within sectors classified as strategic in Algeria. The list of strategic sectors subject to the 49/51 rule was established by an executive decree on April 17, 2021, published in the Official Gazette.
Algeria: Foreigners Could Own Up to 80% of Mining Projects
Facing low investment in the mining sector, Algeria has decided to act as part of its economic diversification policy, where mining is seen as a key driver to reduce the country’s dependence on hydrocarbons.
On Tuesday, March 4, the bill was presented by the Minister of Energy and Mines, Mohamed Arkab, to the Economic Affairs, Development, Industry, Trade, and Planning Committee of the National People’s Assembly (APN).
The new law aims to simplify administrative procedures for granting licenses, enabling faster responses to investor requests.
According to Minister Arkab, this draft law seeks to:
- “Simplify administrative procedures for issuing licenses,” allowing quicker responses to investors.
- Strengthen legal and financial guarantees for investors, improving the business climate.
- “Facilitate access to geological and mining information through modern digital platforms.”
- “Encourage public-private partnerships to support technology transfer and create added value.”
- “Comply with environmental and technical standards in resource exploitation, with stricter oversight to ensure sustainability.”
Algeria: What Will Change for Foreign Investors in the Mining Sector
To attract foreign investors, the draft law proposes repealing provisions that classified mineral and fossil resources as strategic, which previously prevented private investors from obtaining mining titles directly. Instead, they had to sign contracts with a public company holding a mining permit under the 51%/49% rule.
However, Algeria is not fully opening its mining sector to foreigners. The draft law suggests increasing the foreign ownership cap in mining projects to 80%, but foreign investors must partner with a national company holding a 20% stake.
To attract foreign direct investment, the bill includes:
- “The possibility of granting exploitation licenses to foreign investors under conditions ensuring national companies retain a 20% stake in project capital, while offering tax incentives for large-scale, high-value-added projects.”
- Extending the validity period of mining obligations, making them transferable and financeable, which would improve financial liquidity and encourage long-term investments.
Algeria: Mining Activities Currently Subject to the 49/51 Rule
- Extraction and preparation of iron ore
- Extraction and preparation of bauxite
- Extraction and preparation of non-ferrous common metal ores
- Extraction and preparation of ores for ferroalloys
- Extraction and preparation of precious metal ores
- Extraction and preparation of various metallic ores
- Extraction and preparation of uranium and radioactive ores
- Extraction and preparation of pyrite, sulfur production
- Extraction and preparation of various mineral products
- Coal extraction
- Quarrying of dimension stone for construction and industry
- Extraction and preparation of various quarry products not intended for construction materials
- Extraction and preparation of potassium salt
- Extraction and preparation of salts, including salt marshes
- Extraction and preparation of phosphate
