The Ministry of Mining and Energy (“Ministry”) initiated in mid-January the process of preparation of a draft law on amendments to the Law on Mining and Geological Explorations[1] by issuing guidelines for drafting the amendments to the said law. Soon thereafter, the Draft Law on Amendments to the Law on Mining and Geological Explorations (“Draft Law”) was presented to the general public for comments. Public debate was finalized on 9 February 2021. As reported by the Ministry, the Draft Law will be presented to the Government of the Republic of Serbia in the coming weeks.

So far, the Ministry has not officially published the results of the public debate, and therefore we present below the summary of the most notable amendments proposed by the initial Draft Law.

Exploitation of mineral resources of strategic importance for the Republic of Serbia to be awarded in the form of a concession

The Draft Law foresees that the exploitation of mineral resources of strategic importance for the Republic of Serbia, such as oil, gas, coal, copper, gold, lithium and others, would be awarded through the concession. However, the Draft Law foresees that the company which finalized the geological explorations and holds a mineral resources’ reserves certificate will have the right of first refusal to sign the concession agreement. However, this right of first refusal is not envisaged in case of holders of exploration rights who have not finalized their explorations and not obtained the certificate of mineral resources’ reserves.

E-administration procedure for issuance of the relevant approvals necessary for the performance of geological explorations and mining

This is arguably the most practical novelty that the Draft Law is aiming to introduce. However, the electronic procedure will be further regulated by the special ruling to be adopted by the Ministry.

Transfer of certificate on mineral resources’ reserves is transferrable

The Draft Law enables for the certificate on mineral resources’ reserves to be transferred to another entity, pursuant to the procedure similar to that envisaged for the transfer of other approvals/acts issued by the Ministry.

New conditions for obtaining of the approval for applied geological explorations

The Draft Law introduces new conditions for obtaining of the approval for applied geological explorations:

• delivery of letter of intent from the bank confirming that such bank will issue a bank guarantee within 30 days as of the day of issuance of the decision on approval for applied geological explorations. Bank guarantee should be issued for each year separately and should cover at least 10% of the value of geological exploration works for the year in question;
• confirmation from the local authority in charge of urbanism that proposed explorations are in line with the local planning documents; and
• proof of relevant rights over land designated for performance of exploration works (drill hole, excavation, etc.) in the form of ownership, right of use, lease, or easements.

Priority rule in case of issuance of approval for geological explorations

The Draft Law foresees that the approval for geological explorations will be issued to the investor who first submits complete request (i.e. comprising the complete supporting documentation).

Carbonate raw materials, tuff, zeolitized tuff and peat used in industry are to be classified as non-metallic raw materials for derivation of construction materials

Through such status, it will be easier to obtain the relevant approvals for exploration and exploitation from the Ministry for the materials in question.

Costs for remediation and recultivation in case of a bankruptcy or liquidation of a holder of approval for performance of mining works are to be reimbursed as bankruptcy/liquidation estate costs

The Draft Law provides that, in case the holder of an approval for performance of mining works that is undergoing bankruptcy or liquidation has not performed remediation and recultivation of degraded land, costs for such remediation and recultivation will be reimbursed from bankruptcy/liquidation estate. This solution is in line with relevant goals of environmental preservation.

For further information please contact Branislav Marić, Partner, and Tamara Zejak, Senior Associate,.

[1] Official Gazette of the Republic of Serbia, Nos. 101/2015 and 95/2018 – other law.