By: Mining focus Africa

Algeria is undergoing a major economic shift as it implements sweeping reforms aimed at reducing its long-standing dependence on hydrocarbons and unlocking new growth sectors. With oil and gas historically accounting for more than 80% of export revenues, recent global market volatility has pushed the country to prioritise diversification, placing mining at the centre of its future economic strategy.

The government has introduced a series of reforms to improve the investment climate, including the updated Investment Code in 2022 and the adoption of a new Mining Code in 2025. These changes form part of a broader liberalisation process designed to attract foreign capital, improve regulatory transparency, and create a more competitive environment for long-term investment.

Despite its vast mineral resources, Algeria’s mining sector has remained underdeveloped, contributing only around 1% to GDP. However, the country holds significant deposits of iron ore, phosphates, gold, zinc, and rare earth elements, presenting strong potential for expansion. The new Mining Code aims to unlock this potential by modernising regulations and reducing barriers for investors.

One of the most notable changes is the expansion of foreign ownership in mining projects. Investors can now hold up to 80% of mining ventures, provided a state-owned entity retains a 20% stake. This marks a significant departure from previous restrictions and signals a more open approach to international partnerships.

The reform also introduces longer permit durations, with mining licences now granted for up to 30 years and renewable for additional 20-year periods. This provides greater certainty for investors and aligns with the long-term nature of mining projects, which require substantial capital and extended development timelines.

At the same time, the government has introduced local content requirements to ensure that mining activities contribute directly to the domestic economy. These include prioritising local suppliers, employing Algerian workers, and investing in skills development. While these measures aim to maximise economic benefits, they also require careful planning by investors to align procurement and workforce strategies with regulatory expectations.

Another key shift is the restructuring of the fiscal framework. Instead of being fixed within the Mining Code, taxes and royalties will now be determined annually through the national Finance Law. While this approach offers the government flexibility to adjust policies based on economic conditions, it also introduces a degree of uncertainty for investors, who must now monitor potential year-to-year changes.

Overall, Algeria’s reforms represent a clear move toward positioning mining as a core pillar of economic growth. The new regulatory environment offers improved access and incentives for foreign investors, but also requires a more strategic approach to managing regulatory and fiscal risks.

As the country continues to integrate mining into its broader development agenda, it is emerging as a potentially significant destination for investment in Africa’s resource sector, balancing opportunity with evolving policy dynamics.