The Algerian authorities are considering reforming the mining law in order to stimulate investment in the sector, diversify the economy and meet the environmental and social challenges related to the exploitation of mining resources. Although this initiative is commendable, several aspects of the new law deserve a critical analysis to ensure that it achieves its objectives while avoiding potential pitfalls. All that has just been said above is true for a country whose authorities want to develop their country. However, it is legitimate to ask the question why it is now (the timing) that they have woken up to dust off the mining law. The hidden side of this reform comes to us from Washington where the former Minister of Foreign Affairs and current Ambassador of Algeria to the United States, Mr. Boukadoum, seeing the Americans discussing with the Ukrainians about rare earths, saw an opportunity for the Algerian authorities to move closer to Washington, as they are disappointed by the Russians on several issues (membership in the Brics, the absence of support for the Western Sahara issue, the presence of the Wagners in the Sahel,…), and to offer them Algerian rare earths in a country that is not at war. After several contacts with senior American officials, it became obvious that no investor would venture under the old mining law; therefore, a reform was essential. To that end, a law was drafted and presented to the National Assembly on the morning of 16 June 2025 and voted on the afternoon of the same day. A law that commits the subsoil of a country not only of the current generation but also of future generations, which is being treated in this way, can only be described as villainous. The examination of this law brings out points that are presented as positive but above all many negative points that we will discuss below, along with proposals for improvement.
Positive Points of the New Mining Law
- Attractiveness for Investors
The new law offers tax and customs incentives to attract foreign and local investors. This could indeed stimulate the exploration and exploitation of mining resources, particularly in under-exploited areas. Moreover, the simplification of administrative procedures for granting permits is a step in the right direction, as it reduces delays and costs for companies.
- Focus on Transparency
The introduction of a public register of mining contracts is an important measure to promote transparency and fight corruption. This aligns Algeria with international standards, notably those of the Extractive Industries Transparency Initiative (EITI). The strengthening of control and monitoring mechanisms is also a positive point for ensuring equitable management of resources. However, this point must be nuanced because corruption in Algeria is rampant as a scourge and is systemic, and Algeria’s ranking by the organization Transparency International (107 out of 180 countries) only confirms what is already known.
3. Protection of the Environment
The obligation to carry out environmental impact studies (EIS) before the start of mining projects is a significant step forward. This will make it possible to minimize ecological impacts and to better plan the rehabilitation of sites after exploitation. The creation of a fund for the restoration of abandoned mining areas is a proactive measure to manage long-term impacts.
Negative Points and Potential Risks
- Lack of Clarity on Royalties and Economic Spin-offs
Although the law provides for tax incentives, it does not specify sufficiently how mining royalties will be calculated and redistributed. There is a risk that the economic spin-offs will not benefit the State and local communities enough. Consequently, clarification is necessary on how mining revenues will be used to support local and national development.
- Weak Involvement of Local Communities
Although the law mentions consultation of local communities, it does not provide for concrete mechanisms to guarantee their active participation in decisions concerning mining projects. In this regard, there is also a lack of clear provisions on the redistribution of benefits to local populations, which could lead to social tensions and conflicts.
3. Risk of Overexploitation and Non-Compliance with Environmental Standards
Although environmental impact studies are provided for, there is no guarantee that companies will comply with environmental standards once the projects are approved. Moreover, the control and sanction mechanisms in the event of non-compliance with standards are not sufficiently detailed, which could lead to abuses and environmental degradation.
4. Dependence on Foreign Investment
The new law seems strongly focused on attracting foreign investment, which could expose Algeria to excessive dependence on international capital. However, it is crucial to ensure that foreign companies do not dominate the sector to the detriment of local players, and that technologies and skills are transferred in order to strengthen national capacities.
5. Absence of a Strategy for Small-Scale Operators
The law does not provide for specific measures to regulate and support small-scale mining operators, who nevertheless play an important role in the local economy. Without an adapted regulatory framework, these players risk remaining in the informal sector, with negative impacts on the environment and working conditions.
Recommendations to Improve the Law
- Clarify the Mechanisms for Revenue Redistribution
It is essential to clearly define how mining royalties will be redistributed among the State, the regions and local communities. This could include the creation of a local development fund to finance infrastructure, education and health projects.
- Strengthen the Participation of Local Communities
The law should include mandatory mechanisms for the consultation and participation of local communities in decisions concerning mining projects. In addition, specific clauses should be added to guarantee that local populations benefit from the economic spin-offs, notably in terms of employment and training.
- Set Up Control and Sanction Mechanisms
It is crucial to strengthen the capacities of the control institutions to monitor compliance with environmental and social standards. In this regard, strict sanctions should be provided for in the event of non-compliance with obligations, including fines and the suspension of permits.
- Regulate and Support Small-Scale Operators
The law should include measures to regularize and support small-scale mining operators, notably through training, tax incentives and facilitated access to equipment. This would make it possible to reduce informality and improve working conditions and environmental impacts.
5. Balance Foreign and Local Investment
It is important to ensure that foreign investment does not dominate the sector to the detriment of local players. The law should encourage partnerships between foreign and local companies in order to promote the transfer of technologies and skills.
Conclusion
The new Algerian mining law represents an important opportunity to stimulate the economy and modernize the mining sector. However, it has several shortcomings that could limit its effectiveness and lead to negative impacts on the environment and local communities. To maximize the benefits of this reform, it is essential to clarify the mechanisms for revenue redistribution, strengthen the participation of local communities, and set up robust control and sanction mechanisms. By integrating these recommendations, Algeria could position itself as a regional leader in the sustainable and equitable management of its mining resources.