Key Things To Know About Mining In Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan And Mongolia

This article contains a brief overview of the key aspects of mining industry laws in the jurisdictions of Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Mongolia.

Legal framework and regulatory authority

The exploration and development of minerals in these countries is regulated by a number of laws and regulations. In most of these jurisdictions the primary law regulating the mining sector is the Subsoil Use Law, which sets out the basic legal framework governing exploration and development of subsoil resources, provides for state control and granting, using and assigning or terminating rights and obligations of subsoil users, and other general matters. One exception is Mongolia, where the primary law regulating subsoil use for exploration and mining is the Minerals Law. Along with the relevant subsoil use laws, the laws on concessions (Tajikistan, Kyrgyzstan and Mongolia), the laws on production sharing agreements (Kyrgyzstan, Tajikistan, Uzbekistan and Mongolia), and the law on oil and gas (Georgia) regulate investors' operations in the mining sector.

The mining industry in these jurisdictions is also regulated by a number of other more general laws and regulations, including the laws on licensing, investment protection, taxes, and environmental laws.

In general, in all these jurisdictions the state's duties with regard to the management of the subsoil are allocated to the central government, competent body and local executive bodies. The responsibility of the government is lies in organising and managing the state subsoil stock, outlining subsoil allotments, establishing the procedures for the conclusion the subsoil use contracts, and appointing the "competent body" for the execution and implementation of contracts. The competent body prepares and organises tenders, conducts negotiations with subsoil users, signs and registers contracts, monitors compliance with contracts and issues permits for the assignment of subsoil rights. Local executive bodies grant land plots to subsoil users, supervise the protection of the land, and participate in negotiations with subsoil users for environmental and social protection, among other functions.

Ownership of subsoil, subsoil use rights, transfer

In all these jurisdictions, notwithstanding who owns or leases the land, the subsoil remains under state ownership. The title for minerals passes from the state to the subsoil user upon extraction from the ground pursuant to the terms of the subsoil use licence or contract.

In the jurisdictions of Georgia, Tajikistan and Uzbekistan, subsoil use rights are granted in accordance with the terms of the licence and licence agreement.

In Mongolia, subsoil use rights for the exploration and mining of all mineral resources apart from water, petroleum and natural gas are granted through exploration and mining licences.

In Kazakhstan, prior to August 1999, the state established subsoil use rights by granting a licence and implementing a subsoil use contract. In August 1999, the State abolished the two-tier process, and subsoil use rights are now established exclusively through a subsoil use contract, with no licence required. Licences previously issued, however, remain valid.

In Georgia, Uzbekistan and Tajikistan rights granted under licences are generally not transferable.

In Kyrgyzstan a licensee may transfer its licence, subject to the prior approval of such a transfer by the competent body, namely the Kyrgyz Republic's State Agency on Geology and Mineral Resources. Such a transfer may only be completed one year after the date on which the relevant project commenced.

With respect to strategic assets, such transfers are subject to the government's pre-emptive right.

In Kazakhstan, the state has the pre-emptive...