Digging For Modernisation ' Mining Law

• Published date: 21 January 2021
• Subject Matter: Energy and Natural Resources, Mining
• Law Firm: Maravela, Popescu & Asociatii
• Author: Mr Gelu Titus Maravela and Alina Savastre

1. General context

Since the Mining Law no. 85/2003 ("Mining Law") entered into force on March 27, 2003, the economic and social environment in Romania has undergone a major evolution, marked by the increase of investments, especially with the accession to the European Union, in 2007. However, the legislation did not manage to keep up this fastened pace and the Romanian authorities are now trying to adjust the legal framework to the requirements of this continuously changing economic life. In this regard, after three years of debate in the Parliament, Law no. 275/2020 for amending and supplementing the Mining Law no. 85/2003 ("Law no. 275/2020") entered into force on December 17, 2020.

As anticipated, Law no. 275/2020 aims to overcome certain legal and economic issues, trying to give Romania's mineral resources their deserved value.

Thus, the main purpose of this legislative process was to bring financial benefits to the local communities where the mineral resources are located, by distributing a part of the mining royalty to the local budgets. Nevertheless, Law no. 275/2020 also brings important provisions as regards the approval of the exploitation licenses, as well as their transfer. Last but not least, Law no. 275/2020 additionally provides for the amendment of the National Agency for Mineral Resources' status.

2. Turning mineral resources into a more valuable asset for local communities

The most important amendment implemented by Law no. 275/2020 refers to the royalty paid by the authorized economic operators, holders of a concession right, for their mining activity. Thus, if until now, the mining royalty was paid in full to the state budget, starting with January 1, 2021, the royalty will be divided as follows:

i. 45% to the local budget of the community where the exploitation activity is carried on;

ii. 35% to the local budget of the county where the exploitation activity is carried on; and

iii. 20% to the state budget.

However, it is important to note that the above indicated division of the mining royalty will only be applied in the cases where the object of the exploitation activity is represented by surface resources and natural mineral waters (gaseous and non-gaseous). Hence, in the case of the other mineral resources, the mining royalty will continue to be paid in full to the state budget.

3. Licenses transferability

With respect to the transfer of rights and obligations undertaken under a concession license, until the amendment of the Mining...