Laryea, Emmanuel --- "Contractual Arrangements for Resource Investment" [2011] ELECD 405; in Botchway, N. Francis (ed), "Natural Resource Investment and Africa’s Development" (Edward Elgar Publishing, 2011)

Book Title: Natural Resource Investment and Africa’s Development

Editor(s): Botchway, N. Francis

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848446793

Section: Chapter 4

Section Title: Contractual Arrangements for Resource Investment

Author(s): Laryea, Emmanuel

Number of pages: 27

Extract:

4. Contractual arrangements for
resource investment
Emmanuel Laryea

1 INTRODUCTION

Underpinning most foreign investments in resources are contractual
arrangements either with a State (the host State or its agency) or a private
entity (or entities) in which the resources to be exploited are vested.
Ownership of natural resources is primarily determined by domestic law,
though international law also plays an important part, particularly in
resources that transcend international borders1 or in areas with undefined
boundaries.2 Different jurisdictions have varying models of vesting natural
resources, sometimes dependent on the nature of the resource concerned.
In some jurisdictions, such as Western Europe and North America,
private ownership dominates. Natural resources of the extractive kind are
primarily vested in private parties (or entities) in whom the land contain-
ing the resource is vested.3 In other jurisdictions, natural resources are
vested in the State (constituted in a government or monarch, as the case
may be), usually for the benefit of the public at large.4
In most African countries natural resources are vested in the State.5
Thus, the contractual arrangement, which may range from a permit or
licence for exploration and discovery to a substantive contract for devel-
opment, production and distribution, is often between the investor and the
State (or its agencies).
The primary object of the investor is to procure profits, obtaining the
maximum possible risk-adjusted return on its investment over the life
of the investment. This informs issues of interest to the investor when it
comes to ...