The International Finance Corporation (IFC), the private sector arm of the World Bank, has signed an agreement with Yemen’s ministry of oil and minerals, to strengthen the country’s framework for mining policy. The project aims to increase the private sector development of high-value minerals industries.

Managed by PEP-MENA, IFC’s technical assistance facility in the Middle East and North Africa, the project will help review and reform Yemen’s mining laws, regulations, and fiscal regime. The project team will also map and redesign the sector’s administrative procedures, develop a national mining policy, and review the geological survey and minerals resources board.

Syed Gulrez Hoda, IFC’s manager of the project, notes: “Yemen’s mining sector has outstanding potential. An improved policy framework will help attract new investment and improve the country’s economy.”

Yemen’s mineral legislation and draft regulations reflect the government’s desire to liberalise the industry, but the country does not have a comprehensive mining policy. The current fiscal regime leaves Yemen in a less favourable position versus other mining countries, and administrative practices to obtain licenses, permits, and approvals are not standardised.

Attracting major mining companies requires an overall framework, with clear definitions of what private investors can do, what the operating conditions are, and what the requirements are for establishing operations.

The one-year project follows upon a workshop organized by PEP-MENA in collaboration with IFC’s oil, gas, mining, and chemicals department in December 2005. The workshop displayed international best practices in mining.

PEP-MENA is IFC’s technical assistance facility that supports private sector development in the Middle East and North Africa. PEP-MENA focuses on improving the business enabling and regulatory environment; strengthening the financial sector; promoting the growth of small and medium enterprises and their support services, such as business organisations and consulting firms; helping restructure and privatise state-owned enterprises; and developing viable private sector and public-private partnership projects, especially in infrastructure.