MUSCAT, March 18 - Oman’s newly enacted Law of Mineral Wealth comes into force today (March 19), 30 days after its issuance and publication in the Official Gazette on February 17. The new law, which is a detailed and comprehensive one, strengthens the role of the Public Authority for Mining (PAM) in harnessing the potential of the Sultanate’s abundant mineral resources in supporting the national economy.
INCENTIVES FOR SECTOR
Hilal bin Mohammed al Busaidy, CEO of the Authority, said: “The law is based on the results of a comprehensive assessment study on the mineral sector and is guided by a number of relevant national and regional legislations and regulations. PAM has ensured that the law includes incentives for developing the mineral sector, boosting its investment appeal, and facilitating and expediting the procedures for obtaining mining approvals.”
Al Busaidy mentioned that the law will help address challenges facing the sector. It includes a number of provisions designed to safeguard Oman’s mineral wealth, while supporting its prudent and sustainable exploitation in advancing economic development.
“The law specifies the rights and obligations of investors in the sector. It also obligates investors to contribute to the development of the local community. It sets out criteria for identifying, appropriating and exploiting mining areas of economic feasibility and offering them for investment and development in a competitive tender based on the principles of transparency and fairness.”
Under the new law, PAM has the sole prerogative to offer mining concessions through public tenders based on competition, merit and fair play, he said.
According to Ziyad bin Ali al Balushi, Director of the Legal Affairs Department, the new law effectively introduces a new methodology governing the licensing of mining areas.
“We are currently preparing the procedures and regulations for the tendering and award of mining concessions, as well as guidelines designed to encourage investment in downstream and value-added processing industries,” he said.
PAM is also working at an accelerated pace to prepare the executive regulations in support of the new Mining Law, the official said.
The executive regulations will set out the rights and obligations of the investors, developers and other stakeholders that are party to any concession. The regulations will also spell out the tenures of concession agreements, royalties and other levies payable, and developmental commitments to the local community.
“While the law features many provisions to encourage investment in the sector, it also stipulates penalties for actions detrimental to the sound commercialisation of Oman’s mineral wealth,” Al Balushi added.
For example, those found engaging in mining activities without a valid license are liable to prison terms ranging from 1 to 3 years, in addition to fines extending from RO 20,000 to RO 100,000.
It stipulates that all mineral resources, quarry materials and other related mineral wealth within Omani territorial limits, encompassing even Exclusive Economic Zone (EEZ) and continental shelf areas, are the property of the state, which shall be safeguarded, and only lawfully exploited for economic development.
Ownership, possession, exploitation and disposal of this wealth shall be governed by the provisions of the new law, he added.