TerraLex Cross-Border Guide to Cross-Border Guide to Mining Rights

Mining law in Poland is regulated by the Geological and Mining Law (Prawo geologiczne i górnicze) of 9 June 2011 and executive regulations issued by the competent bodies authorized by the statutory law.

The Geological and Mining Law sets out of the rules and conditions for undertaking, pursuing, and concluding: geological works; extraction of minerals from deposits; underground tankless storage of substances; underground storage of waste; and geological carbon dioxide storage as well as the requirements for the protection of mineral deposits; groundwater; and other aspects of the environment.

The mining industry is affected also by the following laws:

• the Environmental Protection Law (Prawo Ochrony Środowiska) of 27 April 2001 which sets out the principles governing environmental protection and the use of environmental resources with regard to sustainable development requirements;

• the Act on preservation of the national character of the strategic natural resources of the country (Ustawa o zachowaniu narodowego charakteru strategicznych zasobów naturalnych kraju) of 6 July 2001 which specifies Polish strategic natural resources;

• the Act on the function of hard coal mining of 7 September 2007 (Ustawa o funkcjonowaniu górnictwa węgla kamiennego) which sets out the principles for financial restructuring of mining enterprises, rules for liquidation of mines, rules for employment restructuring in liquidated mines, conditions for obtaining initial investments subsidies, and principles of corporate governance.

• Act on extractive wastes of 10 July 2008 z (Ustawa o odpadach wydobywczych), to prevent the production of extractive waste; to minimize the negative impact of extractive waste on environment, as well as human life and health; it covers: 1) rules of extractive waste management, 2) rules of functioning of extractive waste facilities; 3) permission procedures for waste management; 4) procedure on prevention of accidents in waste facilities.

The main authorities involved in regulating the mining industry in Poland are the Minister of State Assets (currently competent for the deposits issues) and the Minister of Climate (currently competent for the environmental issues) who grants concessions for the extraction of minerals from deposits.

Depending on the type of the deposits, engagement of other authorities may be required (e.g. for minerals from below the inland waters the authority competent to issue the water permit).

The majority of the mining activites are subject to the concession and cannot be undertaken prior to obtaining such concession. According to the art. 22 of the Geological and Mining Law the process for authorizing or obtaining a concession for mining activities is instigated by submitting an application for a concession to the competent authority (depending on the type of the mining activities either Ministry of the Climate, Marshal of the Voivodship or Starost).

Moreover, the mining activites shall also require obtaining the title to use the deposits, which are mostly owned by the State Treasury. Therefore, the contract for the mining usufruct must be concluded, which conclusion related with the subsequent application for the concession; the standard process includes the prior application for the mining usufruct.

The applicant, in order to obtain the concession for mining activities, shall specify in the application submitted to competent authority i.a.: 1. owners (perpetual usufructuaries) of the real estate within the boundaries the intended activity is to be carried out as well as designation of these real estates (not applicable to prospecting or exploring of hydrocarbon deposits);

2. the applicant’s right to the land (real estate) in which the planned activity is to be carried out or the right, the establishment of which it is applying for;

3. the period for which the concession is to be granted, with the date of commencement of the activity;

4. the means by which the applicant has at its disposal to ensure the proper carrying out of the intended activity;

5. a list of the areas covered by forms of nature preservation;

6. the manner of counteracting negative environmental impact of the intended activity;

7. the business name of the entrepreneur, designation of his seat and address or place of residence and address, and the address of the principal place of pursuit of the economic activity; and

8. the type and scope of carrying out of the intended activity.

Each type of mining activity shall be subject to further, more specific regulations.

Once the concession is granted, it should specify:

• the type and manner of intended activity;

• boundaries of rock mass space where the intended activity is to take place;

• the concession period;

• the commencement date of activities specified by a concession; and

• if necessary, conditions under which the activity will start.

A concession may stipulate other requirements applying to activities covered by a concession such as general safety and environmental protections.

Mining exploration activities are subject to general rules on the obtaining of the concession. An application for concession for prospecting/exploration of minerals shall consist of the following information:

• purpose, scope, and nature of intended geological works (including geological operation), minimum category of deposit recognition;

• scope and schedule for a transfer of geological information and samples obtained from geological works;

• amount of charge to activities specified in a concession.

The maximum area covered by a single concession for prospecting/exploration cannot exceed 1,200 km2. A concession for mineral extraction from a deposit can also determine minimum resource utilization and operations necessary for rational development of a deposit.

Apart from the general rules on the concession on the mining activities, the applicant in order to obtain the concession for extraction of minerals from deposits shall specify i.a.:

• the mineral deposit or a part thereof to be extracted;

• the volume and manner of intended mineral extraction;

• the degree of intended utilization of the mineral deposit reserves, including the accompanying minerals and co-occurring usable trace elements, likewise the means for reaching such aim, or, in the case of brine, curative, and thermal waters - the admissible volume of extraction of underground water;

• planned location of a mining area and mining land presented according to the requirements for mining maps, with the boundaries of the territorial division of the country marked; and

• geological and hydro-geological conditions for extracting, and, if needed, the conditions for forcing water into the rock mass.

There are also specific regulations indicating the rules and requirements set for conducting underground mining operations. Such provisions refer to i.a. the work safety and technical requirement for the operations conducted.

To carry out works in a given area, apart from concessions, it is necessary to establish rules of the mining use (mining usufruct). Mining usufruct is the right to use the space in which the deposit is to be exploited subject to mining ownership. To obtain rights to such deposit, a mining usufruct contract should be concluded with the State Treasury, which becomes effective upon the granting of the concession.

The contract for the mining usufruct includes the amount of compensation to be paid to the State Treasury. Such contract usually refers to both fixed and variable compensation, with the variable compensation depending i.a. on the type of the deposits

​The concession itself also is granted with indication of the exploitation fee, with its amount depending on the type of the deposits.

The rights related to the concession granted in favour of the particular entrepreneur may be transferred to another party; however, this would require the potential new holder of the concession to meet all the statutory requirements, similar to the process of granting a new concession.

Apart from obtaining a concession to extract minerals from the deposit, in accordance with Art. 72 of the Act on the provision of information on the environment and its protection, public participation in environmental protection and environmental impact assessment, the entrepreneur must obtain a decision on environmental conditions, which shall be attached to the concession application, whenever the venture significantly impacts the environment. This shall be applicable to i.a. the Natura 2000 sites.

The most important element in obtaining such a decision is to carry out an impact assessment of the project on the environment, which shall precede the concession application process.

The Polish mining industry is conducting research on the methods for minimization of environment transformation. Ongoing minimization of transformations that had already occurred is performed by the implementation of advanced pro-environmental technological solutions.

Commencement of mining activity requires preparation of a geological report and projection of deposit development and usually a report about the impact on the environment. The aim of this report is to assess the potential impact of mining on the environment and the health of people. It constitutes a base for obtaining the decision on environmental conditions and permits for mining project implementation. ​

If a concession may have a significant impact on the environment, as indicated before, then an environmental decision will always be required. If an environmental decision is not required, an applicant for concession must submit a list of all associated protected natural areas so as to facilitate the authorities’ confirmation of that conclusion. An application for a concession for reconnaissance, exploration of mining operation rights, must also contain proposed countermeasures for any negative impacts on the environment of a planned activity. The concession authority may also impose particular obligations in a concession decision itself, including but not limited to, requiring specialized safety equipment, conducting work only during certain times of the year, or re-cultivation.

Storage of tailings shall comply with a number of general legal requirements, such as minimizing the production of waste, minimizing the impact on the health and the environment, and reusing the waste whenever possible.

Safety policies regarding dams are regulated in the Regulation of the Minister of Energy of 23 November 2016 on the subject of underground mining. These indicate i.a. the requirements to install specific types of dams (isolation dams, regulation dams, fire dams).

New rules regarding priority rights The new wording of the provision assumes that the entrepreneur is entitled (and not as before, that the entrepreneur has a claim) to apply for the establishment of mining use for him with priority over others.

The changes provide that the entrepreneur will have to declare his rights within three years of the priority right. Therefore, an additional three-month deadline for the conclusion of the contract for the establishment of use was abandoned, indicating that the conclusion of such a contract is permissible until the end of three years in which the entrepreneur has such entitlement. In practice, this can cause many problems, because as a result of this change it will not be possible to clearly determine when the entrepreneur should submit an application for the conclusion of a mining usufruct contract for the authority to conclude such a contract. The amendment also does not indicate what will really result in a possible refusal to conclude such a contract.

Grounds for refusing to grant a concession

The provision specifying the grounds for refusing to grant a concession has been clarified. The concession authority will refuse to grant a concession if the intended activity contradicts the public interest, in particular related to the security of the state, including the interest of the raw materials of the state, and also when it would prevent the use of the maritime areas of the Republic of Poland in the manner specified in the study of conditions and directions of development spatial commune or in separate regulations.

Revocation of a concession

An additional condition for revocation of the license has been introduced. The concession authority will be able to withdraw the license in the event of loss of mining usufruct, irrespective of the reason. In this case, the entrepreneur will not be entitled to compensation. The legislator has not decided to introduce a template for a mining usufruct contract into the act or to specify the most important elements of such a contract. For this reason, it is not known whether additional restrictions will be included in the usage contracts.

No requirement to obtain a decision on environmental conditions

In accordance with the amendment to the Act of 3 October 2008 on sharing information on the environment and its protection, public participation in environmental protection and on environmental impact assessments, the requirement to obtain a decision on environmental conditions will not apply if the validity period is extended on concessions for the extraction of hard coal from the deposit, but only if the abovementioned the extension will be justified by the rational management of the deposit, and the scope of the concession itself will not be extended. In the case of licenses for lignite mining, the same conditions apply, except that the extension of the license period will only be possible to six years.

The most important changes affecting the Polish jurisdiction are related to the European law amendments with respect to the approach to carbon-free energy. The discussion in this matter will clearly affect to the Polish mining industry, with the possibility to decrease the importance of the coal mining industry.

This could also lead to changes in the regulatory framework affecting other types of mining. Therefore, any investments into mining businesses shall always be subject to thorough examination on what implications may arise from potential changes of the law.