This post was originally published
July15, 2011
MENA Mining (V): Morocco (2)
Looking at
the issue of investment attractiveness of Morocco, let is first trace the
country-specific concerns.
This page
from TMCNET provides some information: Morocco risk: Legal & Regulatory Risk – a bit outdated
data from THE ECONOMIST INTELLIGENCE UNIT that among other, cites: “The
1995 investment code established a level playing field for local and foreign
investors for most sectors of the economy. Foreign investors do not need a
joint venture to operate in Morocco and can set up wholly owned subsidiaries. A
local lawyer, or a local lawyer found through an international firm practising
in Morocco, is a necessity for any foreign investor given the continued
weakness of local commercial law.”
In
November 2009 Morocco joined the OECD Declaration on International Investment and
Multinational Enterprises. As an adherent to the Declaration, Morocco commits to providing national
treatment to foreign investors and to promoting responsible business conduct.
However,
according to the World Bank data, the measures to protect investors in the
country are moving at a rather slow pace:
Source: Doing Business 2011: Morocco
In recent years,
the Government executed the following:
DB2011: Protecting
Investors: Morocco strengthened investor protections by requiring
greater disclosure in companies’ annual reports.
DB2010: Getting
Credit: Access to credit was strengthened with a new private
credit bureau that began operating in March 2009.
DB2009: Getting
Credit: The right of borrowers to inspect data on their
creditworthiness was guaranteed, increasing their ability to control the
accuracy of the information used by financial institutions in assessing their
risk profiles.
Paying Taxes: The
corporate income tax rate was reduced from 35% to 30%, effective 2008.
Trading Across Borders: Document
requirements for importing and exporting were simplified, reducing the time to
import by 1 day.
DB2008: Dealing
with Construction Permits: The time needed to obtain new licenses
for construction firms was reduced by 10 days, by establishing a one-stop shop
in Casablanca to provide better communication between the relevant agencies.
Registering Property: The
property registration process was complicated by adding the requirement to
check several tax agencies, rather than just one, in order to obtain a tax
clearance certificate. The reform is being implemented nationwide, and adds
three procedures to the process of transfer.
Trading Across Borders: A new
risk-based inspections system was introduced, causing the time to export to
decrease by 2 days, and import by 4 days.
Source: Business Reforms
in Morocco
The Moroccan
Investment Development Agency Web-site Invest in
Morocco is a
descriptive source of information on the subject, however, there is no material
on investment in mining. But you may find details of investor incentives and
protection of investors (however, the site does not allow to download
“Investment Incentives Factsheet” and there is no access to the Website of
CNEA):
·
The contribution
of the state to certain investment expenses: Investment Promotion Fund;
·
The contribution
of the state to certain expenses for the promotion of investment in specific
industrial sectors and the development of modern technologies: the Hassan II
Fund for Economic and Social Development;
·
Exemption from
customs duties under Article 7.I of the Finance Act No. 12/98;
·
Exemption from
import VAT under Section 123-22 °-b of the General Tax Code.
·
Treatment of permitted investments
·
Free
transfer of capital and income
·
The
non-expropriation of investment, except for public utility reasons and
following a court decision (on a nondiscriminatory basis and to pay a prompt
and adequate compensation)
·
Disputes
with recourse to domestic courts or international arbitration at the choice of
the investor
A
look at the Industry-Specific features:
As I
mentioned in the previous post, the mining sector in Morocco has a long history, but it is clear that in
the past the emphasis was made on the phosphate mining (93% of mining
production in 2009).
The mining
business in the country is governed by the Mining Law (1951) and
by the executive orders under supervision of the Directorate of Mines. ( Morocco Investment Charter 1995) . Lately
there had been a number of initiatives reported on revising the legal framework
on the mining sector, but very little data is available on the progress.
Morocco is
in the process of privatizing state-owned mining assets and has opened
investment opportunities to foreign companies. This can be done in two ways:
Joint Ventures with the government; or 100% foreign-owned ventures.
Morocco is
characterized by abundance of small scale mining entities. In fact this is very
distinctive for Africa, as this UN report states: “Artisanal and small-scale mining (ASM) - ASM
is an integral part of rural Africa. The number of artisanal and small-scale
miners is very large, the skills and finances limited, and the operations
technologically deficient. The result is often catastrophic in economic,
social, environmental and health terms.” Morocco has
between 12,000 and 15,000 ASM, (mostly in underground or open pit mines,
producing less than 5,000 tons of products annually) – this is about 40% of
domestic production. The government is supporting the development of
small-scale and artisanal mines with a program designed to integrate artisanal
mining activity in the mining system, provide technical assistance, training of
staff of small companies; develop relevant financial schemes. One of the
objectives is to increase the chances of exploitable deposits on an industrial
scale.
A brief overview
of Tax Incentives:
Mining taxes:
• Are payable on
mining permits (rates fixed by decree).
• Payable upon
the issuing or renewal of exploration and mining permits, and at the beginning
of each year for extended operating concessions and permits.
Incentives for
mining companies
• Customs duty
and tax exemptions on imported equipment.
• A 50%
reduction on company tax or income tax for mining companies that export their
mining products, whether directly or indirectly.
• The mining
company may set up a tax-exempt reserve fund for exploration and development
investment equal to as much as 50% of fiscal profits, with a ceiling of 30% of
turnover.
• The Moroccan
Parliament enacted a new Mining Code. It took effect at the beginning of 2005.
The government’s
incentives for mining industry are summarized in this slide from Maya Gold and
Silver Inc. in its corporate
presentation:
According
to news and analysts’ reports, the Government is expected to continue to
establish joint ventures with international companies; to increase the mining
sector investments by both minor and major mining companies. Significant
attention is provided to improvements of Morocco's physical infrastructure.
There are plans develop infrastructure that would benefit mining sector,
including The Moroccan High-Speed Rail Master Plan . The government stepped up its spending on basic infrastructure
to MAD400bn (US$47.26bn) for 2008-2012, up from just MAD80bn (US$9.45bn) for
the previous period. (This document provides a brief overview for the subject: YOUR GUIDE TO MOROCCAN INFRASTRUCTURE ).
I would like to
conclude this short overview with a specific example that I think illustrates
potential of the country:
To demonstrate
the mineral capacity of Morocco, here is the table from the TECHNICAL REPORT AND RESOURCE ESTIMATE ON THE ALOUS COPPER-SILVER PROPERTY MOROCCO For ODYSSEY RESOURCES LIMITED - there still undeveloped sites for silver-copper deposits
in this particular area
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Interested applicants should Contact us via email: PergoCF@qualityservice.com
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Interested applicants should Contact us via email: PergoCF@gmail.com
We work with individual investors and the company that provides merchant cash advance, asset based lending, commercial real estate refinancing, lines of credit, hard money loans, business acquisition financing, debt consolidation loans, and more. For more information, We encourage you to contact us and learn more about the financing services we offered. If you have any questions or want more information about our company, please feel free to email: Please, contact us for more information: PergoCF@qualityservice.com
Interested applicants should Contact us via email: PergoCF@qualityservice.com
Interested applicants should Contact us via email: PergoCF@cheerful.com
Interested applicants should Contact us via email: PergoCF@gmail.com
Personal loans may not be right for every borrower looking for a home improvement loan. For example, if you have significant equity in your home and are looking to borrow a large amount, you might be able to save money with lower interest rates on a home equity loan. Also, interest payments on home equity loans and lines of credit can be tax deductible under certain circumstances – that’s not the case with personal loans.
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*Smaller home improvement loans (e.g., bathroom or kitchen as opposed to full remodel)
*Borrowers in lower home value markets (if your home value has barely budged since you moved in, you may not have much equity to draw on for a home equity loan)
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