New Mining Act enters into force - International Law Office

Introduction
Exploration of mineral resources
Exploitation of mineral resources
Mining book
Elimination of administrative burdens

Introduction

On August 10 2010 a new Mining Act,(1) which replaced the previously valid Mining Act,(2) came into force. The new act sets forth renewed conditions for:

• the exploration and exploitation of mineral resources;
• the termination of their exploitation; and
• health and safety in mining-related works.

Applicable from January 1 2011, the new act:

• lays down more transparent arrangements for the granting of concessions;
• provides a clearer definition of 'mineral resources'; and
• removes unnecessary administrative barriers.

Exploration of mineral resources

One of the main solutions implemented by the new act is that it will now suffice to obtain a permit for the exploration of mineral resources. Hence, concession is no longer necessary, as was previously the case under the old act. In principle, the exploration of mineral resources is free,(3) but before it may commence in a given research area in the manner and under conditions determined by law, an exploration permit must be obtained.

An exploration permit may be issued only on the basis of a public tender. The decision to perform a public tender is taken by the Ministry of the Economy. The ministry acts either (i) on the basis of an assessment of whether there exists a need to establish the existence of certain types of mineral resource in an area and its subsequent economic exploitation, or (ii) on the initiative of the interested legal entities or natural persons, but only if the initiative relates to mineral resources that are determined to be in the public interest.(4)

The exploration permit is issued for a period of five years. The duration of an exploration permit cannot be extended, except in cases of force majeure. In such cases the validity of the exploration permit is extended for the duration of the force majeure event.(5)

In relation to the termination of exploration permits, the mining right to explore may not be transferred to another legal entity or natural person. In eventual bankruptcy proceedings, such mining right is not included in the bankruptcy estate. Moreover, the mining right to explore may not be sold or leased; any transaction contrary to this obligatory rule is null and void.(6)

Exploitation of mineral resources

An exploitation concession remains a prerequisite for the exploitation of mineral resources.(7) An exploitation concession may be obtained on the basis of a concessionary act and subsequent to a public tender. In exceptional cases the exploitation concession may be granted only on the basis of a previously issued concessionary act without a public tender.(8)

After performance of the tender procedure, the Ministry of the Economy issues a decision on the selection of concessionaires with which the state will enter into concession contracts. The mining right is granted with the conclusion of the concession contract.

As a rule, the duration of the exploitation period set by the concession contract may not be extended. Extensions are possible only in exceptional cases (eg, if in certain cases, due to force majeure, it was not possible from the outset to exploit the mineral resources in a given area within the determined timeframe).(9)

Unlike the exploration mining right, the exploitation mining right may be transferred, provided that all conditions determined by the Mining Act are fulfilled and the Ministry of the Economy approves such transfer.(10)

Mining book

With respect to the management of mineral resources, the new act introduces a mining book, which aims to provide an updated record on mineral resources sites. The mining book is composed of a mining cadastre and a mining register, which are both publicly available.(11) The mining cadastre contains data on exploitation areas and limited areas defined in the concessionary act, while the mining register contains data on legal entities and natural persons that hold exploration and exploitation mining rights.(12)

Elimination of administrative burdens

Other issues in the new act relate to the elimination of administrative burdens. For example, the mining project for exploitation must be part of the concession contract, which means that the beneficiary may commence mining work immediately after signing the concession contract; further mining permits are no longer required.

For further information on this topic please contact Živa Južnič or Nina Šelih at Odvetniki Šelih & partnerji, op, dno by telephone (+386 1 300 7650), fax (+386 1 433 7098) or email (ziva.juznic@selih.si or nina.selih@selih.si).