Algeria opens door to larger foreign role in mining projects

Algeria’s parliament approved legislation allowing foreign companies to own as much of 80% of mining projects, a step change for the OPEC country seeking to diversify its economy.

A majority of lawmakers in attendance voted in favor of the new law on Monday. Authorities say it will streamline the investment process, boost extractive industries and allow the North African nation to trim billions of dollars worth of costly imports.

A key natural gas supplier to Europe, Algeria borders countries that are significant mineral exporters, including phosphate-rich Morocco and gold-mining Mali, but ships relatively little itself. It’s developing substantial finds of phosphate, iron ore, lead and zinc.

Bolstering the mining sector would help Algeria shift away from its historic dependence on hydrocarbons, which make up more than three-quarters of exports and about half of state revenue. That’s left it particularly vulnerable to volatile energy prices.

The International Monetary Fund, which sees the economy growing 3.5% this year, has urged authorities to seek other income streams and attract more private capital.

Under the new laws, companies will be able to secure a single mining permit that’s valid for as long as 30 years and would cover both exploration and extraction.

The law will now proceed to Algeria’s senate, which typically doesn’t oppose the lower house’s decisions.

Bloomberg