A practical reading of Article 18 of the Sudanese Mineral Wealth and Mining Development Act 2015 for international law firms and foreign investors‍

Why Licence Termination Is the First Question Investors Ask

When international investors assess foreign investment in Sudan, their first concern is rarely mineral potential. It is legal certainty.

In the mining sector, certainty means one thing above all: security of tenure. Investors and lenders need to know when, how, and under what circumstances a licence or mining contract can be cancelled by the regulator.

Article 18 of the Sudanese Mineral Wealth and Mining Development Act 2015 addresses this issue directly. It grants the Minister the power—on the recommendation of the Technical Committee—to cancel licences, mining contracts, and agreements. For foreign investors, understanding this provision is not optional. It is central to investment structuring, risk allocation, and project bankability.

What Article 18 Actually Says

Article 18 provides that the Minister may, based on a recommendation from the Technical Committee, cancel licences, contracts, or agreements in two defined situations:

1. Breach of any condition of the licence, contract, or agreement, or
2. Failure to exploit the licence or contract for the purpose for which it was granted.

At first glance, this may appear broad. In practice, however, these two triggers reflect a regulatory logic seen across many mining jurisdictions: licences are conditional rights, not permanent property, and they must be actively used and complied with.

From a foreign investor’s perspective, Article 18 introduces two key legal concepts:

• Compliance risk (breach-based termination), and
• Performance risk (non-use or under-use of granted rights).

Both concepts are familiar in international mining law, but their application depends heavily on how regulators exercise discretion in practice.‍

‍ How Article 18 Compares with International Mining Practice

Article 18 of the Sudanese Mineral Wealth and Mining Development Act 2015 is broadly consistent with international norms.

Most modern mining regimes—whether in Africa, Latin America, or Asia—allow regulators to cancel licences where:

• contractual obligations are breached, or
• licence holders fail to carry out agreed work programmes within defined timelines.

What distinguishes investor-friendly jurisdictions is not the existence of cancellation powers, but how they are framed and applied. International best practice typically includes:

• clear notice of default,
• a defined cure period to remedy breaches,
• proportionality between the breach and the sanction,
• and, in some cases, access to administrative or judicial review.

Article 18 itself is concise and does not detail procedural safeguards. Instead, those safeguards are usually developed through regulations, contractual drafting, and administrative practice.

For foreign investors considering foreign investment in Sudan, this means that risk management does not stop at the statute. It continues into:

• mining contracts,
• investment agreements,
• and dispute resolution clauses.

The Story Behind the Rule: Why This Article Exists

From a policy perspective, Article 18 exists to prevent two systemic risks:

1. Licence hoarding, where investors acquire rights without meaningful development; and
2. Regulatory non-compliance, which can undermine safety, environmental protection, and community relations.

By reserving the power to cancel unused or non-compliant licences, Sudan signals that its mineral resources are intended for active, responsible development.

This aligns with a broader trend in resource-rich states seeking to convert mineral potential into real economic value, employment, and fiscal revenue—an essential objective for the long-term success of foreign investment in Sudan.

What This Means in Practice for Foreign Investors and Counsel

Article 18 should be read as a planning and drafting provision, not merely a sanction.

For foreign investors, practical risk mitigation includes:

1) Clear work programme commitments
Ensure that exploration and development milestones are realistic, properly phased, and defensible. Over-ambitious timelines increase termination risk.

2) Strong compliance systems
Many cancellations globally arise from technical or administrative breaches rather than bad faith. Internal compliance tracking is essential.

3) Contractual cure mechanisms
Mining contracts and related agreements should include notice and cure provisions aligned with international practice, even if not expressly stated in the statute.

4) Force majeure and stabilisation protections
Given Sudan’s operating environment, well-drafted force majeure and change-in-law clauses are critical to managing performance risk.

5) Dispute resolution planning
Article 18 decisions should be assessed in light of available administrative review and arbitration mechanisms, particularly where foreign investment treaties apply.

For international law firms advising on foreign investment in Sudan, Article 18 is a key reference point for due diligence, transaction documentation, and lender discussions.

What Article 18 Signals About Sudan’s Economic Potential

Far from deterring investment, a clearly articulated cancellation framework can enhance confidence—provided it is applied transparently and proportionately.

Article 18 of the Sudanese Mineral Wealth and Mining Development Act 2015 signals that Sudan is seeking:

• disciplined development of mineral assets,
• accountability from licence holders,
• and alignment between legal rights and economic outcomes.

For serious investors, this can be a positive signal. It indicates that the legal framework is designed to support real projects, not speculative holding, which ultimately strengthens the investment environment.

Conclusion

Article 18 sits at the heart of mining risk allocation in Sudan. It defines when rights can end—and, by implication, how investors must structure projects to ensure they do not.

For foreign investment in Sudan, understanding this provision is essential to protecting value, ensuring compliance, and maintaining security of tenure.

At Sudanese Commercial Law Office (SCLO), we regularly advise international law firms, multinational companies, and foreign investors on licence risk, contract structuring, and regulatory strategy under the Sudanese Mineral Wealth and Mining Development Act 2015, helping projects move from paper rights to sustainable operations.