1. REPUBLIC OF IRAQ Ministry of Industry and Minerals The State Company of Geological Survey and Mining

2. Iraqi Legislations in the Mineral Investment Sector

3. Iraq is rich in mineral resources which required legislations and legal instruction to organize investment and exploitation of these resources. Iraq is rich in mineral resources which required legislations and legal instruction to organize investment and exploitation of these resources.

4. The Quarries Investment law No. (139) for the year 1981 was issued. After seven years the Law was updated by the presently valid Law no. 91 for the year 1988 to achieve better monitoring, preserve natural resources, activate different industries in the public sector, facilitate the procedures and secure the rights of the State and the environment. The Quarries Investment law No. (139) for the year 1981 was issued. After seven years the Law was updated by the presently valid Law no. 91 for the year 1988 to achieve better monitoring, preserve natural resources, activate different industries in the public sector, facilitate the procedures and secure the rights of the State and the environment.

5. 1.Valid legislation (The Law No. (91) for the year 1988, and its modifications).

6. The most important items cited in this Law are: 1. It is concerned with the extraction part only of the whole mineral investment stages.

7. 2. A committee from different ministries is responsible to allocate lands suitable for mineral investment and the prohibited areas where investment is unlawful as: oil and gas fields, oil pipelines, electricity lines … etc.

8. 3. Geosurv-Iraq is entitled (by law) to monitor the implementation of this law, being the only professional government authority in this field.

9. 4. GEOSURV grants licensing of quarries according to the required specifications, but contracting is done with the local government where the quarry is located.

10. 5. Mines licensing are done with Geosurv after the approval of the Ministry.

11. 6. The investor pays the fees, investment rates (Royalty) and also pays for the services offered by Geosurv as cited in the Law and according to the mineral commodity.

12. 7. The Law has placed penalties for non obeying cases through a specialized committee and after the approval of the Minister.

13. 8. The Governor is given the rank of a misdemeanor judge to look into issues arising from the application of the Law.

14. 9. Any extracted material whether from the quarries or from the mines can be exported after obtaining the approval of the Ministry of Industry & Minerals.

15. * Pursuant to this Law, Geosurv has issued five legal instructions, the last is modification No. (1) For the year 2005 which implies reviewing royalty of quarry and mining materials according to the prices of the local market and as shown in the following table:

16. Royalty per ton / (USD) Material 5.8 Native Sulfur 5 Phosphate rocks 2 Sodium Sulphate 2 Sedimentary iron 2.9 Sodium chloride 1.6 Silica sand 1.6Bauxite 1.6Kaolin 1.6Bentonite 1.6 Palygorskite (attapulgite) 1.6 Flint - clay 3.3Porcelanite 3.3Celestite 3.3 Feldspathic sand 6.6 Bitumin (seepages) 6.6 Asphalt Rock Table : (1)

17. Table : (2) Royalty per one cubic meter (USD) Raw Material and purpose of use 0.2 Limestone and dolomite for construction. 0.8 Limestone and dolomite for ballast and filling. 1.6 Limestone and dolomite for industrial purposes. 6.2 Marble and its substitutes for construction. 0.6 Primary gypsum for industrial purposes (plaster). 0.2 Subase for construction.

18. Exchange rate :- 1 US $ ≈ 1200 ID 0.4 Subase for ballast and filling. 0.6 Subase for precipitators. 0.2 Sand for construction 1.6 Sand for precipitators. 0.2 Secondary gypsum for industrial purposes. 0.2 Loam for filling. 0.2 Loam for industrial purposes. 0.2 Alluvial sediments for agriculture and gardens.

19. II. Legislation in progress A draft of a new Law has been prepared to meet the political and economic changes which took place during the last decade in Iraq and in order to be up to the requirements of free market economy. It is expected that the new law will be put into effect within the few coming months.

20. The new law bear the following advantages:- 1. The provisions of this law are applied upon all nationalities whether being individuals or companies.

21. 2. The mineral resources include: a) Metallic mineral resources. a) Metallic mineral resources. b) Nonmetallic and semimetallic b) Nonmetallic and semimetallic mineral resources. mineral resources. c) Radioactive mineral resources. c) Radioactive mineral resources. d) Organic mineral resources. d) Organic mineral resources. e) Mineral water resources and e) Mineral water resources and geothermal energy. geothermal energy. f) Precious and semiprecious stones. f) Precious and semiprecious stones.

22. 3. All mineral investment aspects are covered by the new law, including: prospecting, exploration, mining, processing & marketing.

23. 2 4. License fees (suggested): a) Mineral prospecting: one million a) Mineral prospecting: one million ID/km ID/km b) Mineral exploration: five millions b) Mineral exploration: five millions ID/2.25km. ID/2.25km. c) Mining fees and royalty to be c) Mining fees and royalty to be defined according to the raw defined according to the raw material by later instructions. material by later instructions. 2

24. 5. Privileges and exemptions: The investor, regardless of his The investor, regardless of his nationality, has the following nationality, has the following exemptions: exemptions:

25. a) Local governments bear up to a) Local governments bear up to 50% of the expenses of the basic 50% of the expenses of the basic infrastructures. The investor has infrastructures. The investor has to take upon the remaining to take upon the remaining expenses. expenses.

26. b) To lease lands owned by the State for b) To lease lands owned by the State for the purpose of this law are dealt with the purpose of this law are dealt with according to the provisions of the according to the provisions of the Law of Industry No. (20) for the year Law of Industry No. (20) for the year 1988 1988

27. c) The investor is exempted from c) The investor is exempted from auction procedures. auction procedures. d) Taking out the capital with its returns and according to the returns and according to the instructions issued by the Iraqi instructions issued by the Iraqi Central Bank. Central Bank.

28. e) To open bank accounts in the e) To open bank accounts in the reliable banks of Iraq. reliable banks of Iraq. f) Exemption of imported fixed f) Exemption of imported fixed assets for the project from all assets for the project from all taxes and fees for long term taxes and fees for long term licenses within three years from licenses within three years from the date of the validity of the the date of the validity of the investment license. investment license.

29. g) To exempt the specialized spare parts for the project from rates g) To exempt the specialized spare parts for the project from rates and fees, yet the amount should and fees, yet the amount should not exceed 20% from the value not exceed 20% from the value of the fixed assets. of the fixed assets.

30. h) Exemption of imported fixed assets h) Exemption of imported fixed assets required for the expansion, required for the expansion, development or upgrading of the development or upgrading of the project from rates and fees on a project from rates and fees on a condition that these procedures will condition that these procedures will increase the designing capacity up increase the designing capacity up to no less than 10%. to no less than 10%.

31. 6. There is a brief procedure for the investors to get investment license investors to get investment license where the following document are where the following document are needed: needed: * Profile of investor (person or co.). * Profile of investor (person or co.). * Similar job done. * Similar job done. * Bank Guarantee. * Bank Guarantee. * The request depends on the kind of * The request depends on the kind of investment as follow: investment as follow:

32. Kind of investment Mine Geosurv (Allocate the area technically) Ministry of Industry and Minerals (Approval) Geosurv (Sign contract) Quarry Local Government Geosurve (Approval) Local Government (Sign contract) Geosurv (Monitoring & technical consultation)

33. This will be in parallel to issue of a certification of registration from the Director General of Industrial Development, Ministry of Industry & Minerals for an industrial plant construction.

34. 7. Penal clauses Anyone who performs investment works, prospecting or extracting minerals contrary to the provisions of this Law, is considered as transgressor. The penalty is either a fine or an imprisonment and according to the kind of transgression.

35. 8. Any arising issues from the application of this Law will be handled by the specialized Iraqi courts.

36. All present and future laws of mineral investment are a complementary part for the Law of the National Commission for Investment All present and future laws of mineral investment are a complementary part for the Law of the National Commission for Investment No. (13) for the year 2006.

37. Thanks for the audience