Only three and a half months following the issuance of the guidelines for drafting the amendments to the Law on Mining and Geological Explorations[1] / initiation of the official procedure for amendment of the said law, the Law on Amendments and Supplements to the Law on Mining and Geological Explorations[2] entered into force on 30 April 2021 (“Amendments to the Mining Law”), following its adoption earlier that month.

Some of the solutions proposed by the Ministry of Mining and Energy (“Ministry”) in the form of the draft law have not remained in the adopted Amendments to the Mining Law. These are, among others, the awarding of the concession for exploitation of mineral resources of strategic importance for the Republic of Serbia, issuance of the approval for geological explorations to the investor who first submits complete request (i.e. containing the complete supporting documentation), and delivery of proof of relevant rights over land designated for performance of exploration works (drill hole, excavation, etc.) along with the request for issuance of geological exploration approval.

We present below the summary of the most notable novelties introduced by the Amendments to the Mining Law.

Geological exploration and exploitation of uranium, nickel and cobalt to be performed with prior approval of the government

The Amendments to the Mining Law foresee that the geological exploration and exploitation of uranium, nickel and cobalt may only be performed with prior approval of the Government of the Republic of Serbia, upon proposal of the Ministry and in line with the law which governs the nature protection.

Investment agreement with the Republic of Serbia

An early draft of the Amendments to the Mining Law envisaged that the exploitation of mineral resources of strategic importance for the Republic of Serbia, such as oil, gas, coal, copper, gold, lithium and others, should be awarded through the concession framework. However, this approach faced a strong opposition from the investor community’s side due to the fact that it would open some material uncertainties. Eventually, it was replaced by the investment agreement concept.

Investment agreement is an option available to the investors who acquired right to exploit mineral resources. Investment agreement should regulate matters concerning the construction of missing infrastructure, environmental protection, pre-emption right of domestic processors and producers, fiscal/financial incentives and other matters relevant for the investment. The Government of the Republic of Serbia will define the framework governing various matters for the conclusion of the investment agreement (e.g. negotiation procedure, content of the agreement). It remains to be seen in practice how the investment agreement will be structured and will it help investors to secure their investment.

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 Amendments to the Mining Law have introduced. However, this procedure requires further regulation through a special ruling that should be adopted by the Ministry and it also necessitates introduction of the appropriate software for the functioning of the new system.

Transfer of certificate on mineral resources’ reserves

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

Foundation of Chamber of Mining and Geological Engineers of Serbia

The Amendments to the Mining Law prescribe that the Chamber of Mining and Geological Engineers of Serbia will be established and that it will be competent for issuance of various licences necessary for the design and performance of geological explorations and exploitation, instead of the Ministry.

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 Amendments to the Mining Law kept the solution from an early draft of this law whereby, 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 and Tamara Zejak

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

[2] Official Gazette of the Republic of Serbia, Nos. 101/2015, 95/2018 and 40/2021.