Investing in Africa: How Algeria’s mining reform is reshaping the investment landscape

In brief

Algeria has embarked on one of its most comprehensive economic and legal reforms in decades. This process began with a comprehensive overhaul of the Investment Code in 2022 (the first such reform since 2016), and was followed, in August 2025, by the adoption of a new Mining Code, replacing the framework that had been in place since 2014.

For decades, Algeria’s economy has been heavily dependent on oil and gas. Hydrocarbons have historically accounted for over 80% of its export revenues. Recent volatility in global energy markets has exposed the risks of this reliance, prompting the government to explore alternative sources of long-term growth.

Mining is emerging as Algeria’s new priority. Despite its substantial geological potential, the sector remains structurally underdeveloped, having contributed approximately 1% of the country’s GDP in recent years. The 2025 Mining Code seeks to unlock this potential for economic growth by modernising the legal framework, lowering barriers to entry, and creating conditions more conducive to sustainable and long-term capital investment.

An evolving investment landscape for foreign investors

The Mining Code reform represents the latest milestone in a broader cycle of economic liberalisation that began in 2019. That year marked a major turning point with the adoption of the new Hydrocarbons Law (Law No 19 13), which introduced more flexible contractual structures and a more competitive fiscal regime aimed at revitalising upstream investment.

In 2020, as part of broader efforts to improve the investment climate, the government abolished the long‑standing “51/49” rule – under which majority Algerian shareholding was required – for most non‑strategic sectors. This liberalisation, introduced by the 2020 Supplementary Finance Law (Law No 20-07), explicitly excluded activities deemed strategic, notably energy, mining, pharmaceuticals, transport infrastructure and defence, in respect of which the majority local ownership requirement was retained. 

Since then, any transfer of shares or equity interests to foreign nationals in Algerian companies operating in strategic sectors has been subject to prior ministerial authorisation, replacing the former State preemption regime. The procedural framework governing this authorisation was subsequently clarified and formalised by Executive Decree No 25-304 in November 2025.  

Reform momentum continued with the adoption of the 2022 Investment Code (Law No 22-18), which enhanced Algeria’s attractiveness to foreign investment. The new framework introduced strengthened investor guarantees – notably regarding the transfer of foreign currency, including capital and dividends – while also seeking to ensure greater regulatory stability. It further improved transparency through the establishment of three defined incentive schemes, structured according to the economic interest of the investment, and provided dedicated administrative support for foreign investment projects through a one-stop shop mechanism.

Despite substantial mineral potential – including iron ore, phosphates, zinc, gold and rare earth elements – the mining sector had remained an outlier within Algeria’s reform agenda until recently. The legal framework established under the 2014 Mining Law had become outdated and was widely regarded as a constraint on sectoral development. For example, the Gara Djebilet iron ore project, the world’s second-largest such iron deposit, was only brought into industrial exploitation in 2022, despite having been discovered in the 1950s. With the adoption of the new Mining Code in 2025 (Law No 25-12), mining has now been fully integrated into Algeria’s broader economic diversification strategy. 

Key changes introduced by the 2025 Mining Code

• Expanded foreign ownership for mining operations. Foreign investors may now hold up to 80% of the share capital of a mining company, subject to a mandatory 20% participation by a State-owned enterprise. This represents a significant departure from the previous 49% foreign ownership cap and stands in clear contrast with the hydrocarbons sector, where the 51/49 rule remains in place. Quarrying activities, however, remain subject to a 49% limit on foreign ownership.
• Longer permit durations. Mining exploitation licences may now be granted for up to 30 years, renewable for successive 20-year periods, replacing the previous maximum duration of 20 years applicable to both mines and quarries. Quarry permits may be issued for up to 15 years, with successive renewals of 10 years. These extended permit durations are better suited to capital-intensive mining projects and are expected to facilitate long-term investment planning and project financing.
• Local content requirements. The new regime introduces local content obligations, including the prioritisation of Algerian suppliers, the employment of local workers, and the training of Algerian personnel from the start of development works. These requirements reflect a broader policy objective of ensuring that mining investment generates tangible domestic economic benefits. While such local content obligations are common in mining legislation worldwide (e.g. Mali, Burkina Faso, Cameroon), they require careful planning by investors, as they may affect procurement strategies, workforce planning and project timelines.
• Application to existing mining licences. Licences granted under the 2014 Mining Law remain valid until their expiry, but may not be renewed under the former regime. Licence holders may, however, elect to transition to the new framework within 24 months of the publication of the new Code, subject to the surrender of their existing rights. In practice, operators must therefore choose between allowing their projects to run to term under the old regime or proactively migrating to the new one. Remaining under the 2014 framework ensures regulatory and fiscal continuity for the remainder of the licence term and may be advantageous for operators that secured favourable stabilisation provisions. Conversely, opting into the new regime would enable investors to take advantage of the liberalised rules introduced by the 2025 Mining Code, including expanded foreign ownership thresholds and longer permit durations.

A new approach to fiscal terms

One of the most consequential reforms introduced by the 2025 Mining Code concerns taxation.

Under the 2014 regime, taxes, royalties and fees were set out in annexes to the Mining Code itself. These annexes have now been repealed. Going forward, all fiscal provisions applicable to mining activities are to be determined through the annual Finance Law. This approach differs markedly from the hydrocarbons sector, where fiscal terms remain embedded in sector-specific legislation, and confers significantly greater flexibility on the government to adjust tax and royalty rates on a year-by-year basis, without amending the Mining Code itself.

To avoid a regulatory gap, the 2025 Mining Code provides for the continued interim applicability of the fiscal provisions of the 2014 Mining Code until dedicated mining fiscal measures are adopted through a Finance Law. The 2026 Finance Law, published on 31 December 2025, does not introduce any mining-specific fiscal provisions. As a result, the 2014 fiscal parameters remain applicable for the time being, pending their revision through a future Finance Law.

What this means for foreign investors

The recent reforms signal a clear shift in Algeria’s strategy, elevating the mining sector to a central role in the country’s economic agenda and actively seeking to attract foreign investors. For market participants, this offers new and significant opportunities to tap into Algeria’s rich mineral resources under a regulatory framework that is substantially more open and welcoming than previously available.

At the same time, the shift to fiscal regulation through the annual Finance Law introduces a degree of uncertainty for investors. While this approach affords the government increased flexibility to respond to market conditions and public revenue needs, it also increases the potential for year on year changes to the economic equilibrium and long-term predictability of mining projects.

Against this backdrop, foreign investors should consider:

• Carefully negotiating mining conventions and project agreements, incorporating stabilisation, renegotiation or economic equilibrium clauses to manage fiscal risk.
• Closely monitoring Finance Laws and implementing regulations, as these will now play a central role in shaping the mining investment environment.
• Engaging early with the authorities to align project structures with evolving regulatory and policy priorities.

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