ALGERIA’S parliament approved legislation allowing foreign companies to own up to 80% of mining projects, marking a significant policy shift for the OPEC nation as it seeks to diversify its hydrocarbon-dependent economy, Bloomberg News reported.
A majority of lawmakers 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 reduce billions of dollars worth of costly imports.
Algeria, a key natural gas supplier to Europe, borders countries that are significant mineral exporters, including phosphate-rich Morocco and gold-mining Mali, but ships relatively little itself. The country is developing substantial finds of phosphate, iron ore, lead and zinc, said Bloomberg News.
Strengthening the mining sector would help Algeria reduce its historic dependence on hydrocarbons, which comprise more than three-quarters of exports and about half of state revenue. This dependence has left the country particularly vulnerable to volatile energy prices, the newswire said.
The International Monetary Fund, which projects the economy will grow 3.5% this year, has urged authorities to seek alternative income streams and attract more private capital.
Under the new legislation, companies will be able to secure a single mining permit valid for up to 30 years, covering both exploration and extraction phases. The law now proceeds to Algeria’s senate, which typically supports the lower house’s decisions.
