The Regulation abolished the former Mining Regulation dated 21 September 2017 (the “Former Regulation”).

Amendments in respect of Licences

The Regulation introduces several novelties regarding licences which were not part of the Former Regulation.

Under the Former Regulation, it was sufficient to obtain an exploration certificate for certain mining sites or exploitation certificate in relation to particular exploitation activities. The Regulation makes it now compulsory to obtain a licence for all exploration and exploitation activities.

Significant amendments have also been introduced with respect to the extension of the licence period. The initial exploitation licence period for Group V[1] mines has been set as 5 years. The initial exploitation licence period of Group I (b)[2], Group II[3], Group III[4] and Group IV mines[5] can no longer be less than 10 years.

Upon expiry of the licence period, exploitation licences that fulfil the conditions stipulated in the Regulation may be extended for a period of 10 years and, under certain circumstances, for a period of 20 years.

However, the total licence periods are:

• 30 years for Group I mines;


• 40 years for Group II mines; and


• 50 years for any other Groups.

In addition, the shipment of minerals is subjected to the approval of the General Directorate of Mining and Petroleum Affairs (“MAPEG”).

One point of further significance is that, despite the absence of the consent of the relevant licensee, it may be decided to carry out joint projects for more efficient utilisation of the mining reserves with the approval of the Ministry of Energy and Natural Resources (the “Ministry”). For such purpose, the operation permit areas within the joint licence areas may be re-arranged.

Right to Develop Proved Reserves

The concept of a “right to develop proved reserves” has been introduced. Briefly, ores that are discovered in three-dimensional form are referred to as proved reserves within the context of the Regulation.

The right to develop proved reserves grants natural and legal persons who discovered such reserves the right to receive a pre-agreed interest from licensees or MAPEG in lieu of such discovery.

Pursuant to the Regulation, this right cannot be divided into shares as is the case for other licences and activities. 

Persons who have the right to develop the proved reserves will be able to transfer such right together with the relevant licence. However, licence transfers are subject to the approval of the Ministry.

This is a registrable right and will be annotated in the mining registry.

Royalty Obligations

Under the Former Regulation, agreements between licensees and royalty owners were subject to the consent of the Ministry. Under the Regulation, MAPEG is henceforth the authorised institution to grant such consent. Royalty agreements will be annotated in the mining registry and so will be changes to royalty agreements, such as the extension of the term or changes to the coordinates of the site, subject to the consent of MAPEG.

Pursuant to Article 101 (5) of the Regulation, more than one royalty agreement can be executed within the same licence area. Particular attention should be paid to ensure that the areas do not overlap and the coordinates are notified to MAPEG.

Legal entities wishing to operate as royalty holders are required to fulfil a new set of criteria in addition to the financial qualification requirements stipulated in the Former Regulation. At least 30% of the amounts specified in the table of financial adequacy amounts in the annex to the Regulation must be covered by equity and 70% may be covered by bank financing.

According to Article 79(11) of the Regulation, share transfers of more than 10 per cent, which may lead to a change in the shareholding structure of legal entities operating in mining areas, are subject to MAPEG’s approval.

If licence areas which are under the responsibility of public institutions and organisations are divided and transferred, it is now possible to issue licences to private entities and persons for such areas.

Administrative Fines

The Regulation regulates the procedures and principles regarding administrative fines in the mining market.

Administrative fines are paid to MAPEG within 1 month from the date of notification to the relevant person. For payments made within the said 1-month period, a discount of 25% is applied. Market participants who face financial difficulties may pay administrative fines in 4 equal instalments within 1 year.  

Under the Former Regulation, administrative fines were imposed separately for each administrative offence. Pursuant to Article 92 of the Regulation, if there is more than one violation for which more than one administrative fine applies, then the higher administrative fine will be imposed. However, if administrative sanctions are stipulated for the violation in question, then these sanctions will be applied separately.    

Royalty fees

If unprocessed minerals are processed into semi-finished or finished products which provide added value, then half of the share of the State will not be collected by the State.

If metallic minerals, except for gold, silver and platinum, are converted into metals by using them in integrated facilities owned by licensees or if a mine is sold so that such conversion can be effected in integrated facilities, then three thirds of the  share of the State will not be collected by the State.

Permanent Supervision

The Regulation stipulates that a permanent supervisor for each underground mine must be appointed and that the books in relation to such mine must be kept electronically. In this context, a mining engineer can only be appointed as a permanent supervisor three times within the same calendar year. The mining engineer is subjected to certain professional qualification criteria depending on the specifications and production capacity of the mines

Pursuant to Article 126(ç) of the Regulation, the permanent supervisor is responsible for identifying, recommending and taking measures regarding issues that may jeopardise the operational safety of mines. In the Former Regulation, this was expressed as the duty to identify 'deficiencies and defects related to the activities at the workplace'. This responsibility has now been widened, with the aim to prevent mining accidents.