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Gecic Law

 
Regulatory framework
Provide a brief summary of the regulatory framework surrounding the mining industry in this jurisdiction.

Mining in Serbia is regulated by the Mining and Geological Explorations Act (Official Gazette of the Republic of Serbia, Nos. 101/2015 and 95/2018 – as amended: “Mining Act”) and bylaws (regulations and rulebooks) governing procedural issues mainly regarding fees and documentation required for carrying on mining activities and licensing.

The Mining Act regulates measures and activities of the mineral policy and the manner of implementation thereof, conditions and manner of execution of geological explorations of mineral and other geological resources, researching of geological environment, as well as geological explorations for the purpose of spatial and urban planning, designing, construction of buildings and remediation of the site, manner of classification of resources and reserves of mineral raw materials and ground waters, exploitations of reserves of mineral raw materials and geothermal resources, construction, use and maintenance of mining facilities, plants, machines and equipment, execution of mining works, mining waste management, remediation and recultivation of abandoned mining facilities, as well as enforcement of the Mining Act.

 
What are the main authorities involved in regulating the mining industry in this jurisdiction?

The main authority involved in regulating the mining industry in Serbia is the Ministry of Mining and Energy (“Ministry”).

The Ministry is responsible for state administration in the field of mining and geological explorations. It is the government body responsible for:

  • mining and natural resources development strategy and policy;
  • geological explorations;
  • exploitation of all types of mineral raw materials and other natural resources;
  • performing inspection supervision in this field.

The Ministry is the competent authority for mining licensing in Serbia. Consequently, the Ministry performs the following tasks:

  • decides on geological exploration licensing applications (In addition to the applied geological explorations, the Mining Act regulates standard geological explorations that constitute public-interest activities which are carried on for the needs of evaluating the total geological potential of a certain area, therefore the state's total mineral resources.);
  • decides on applications for retention of the right to an exploration area;
  • decides on exploitation field applications or and exploitation licensing applications;
  • decides on mining operations applications;
  • decides on mining facility construction applications;
  • decides on mining facility operation and trialling applications;
  • carries out inspections.

The said decisions are final and can be challenged only in an administrative dispute.

When the mining activities are performed on the territory of the Autonomous Province of Vojvodina (“AP Vojvodina”), the Provincial Secretariat has the role of the competent authority involved in performing these tasks. Opposite to the Ministry's decisions, decisions issued by the Provincial Secretariat can be appealed through the Ministry.

 
Exploration, exploitation, and production rights
What is the process for authorizing or obtaining a concession for mining activities?

Under the Mining Act, the licensing of full-scale mining activities in Serbia is contingent on:

  • Permission being granted for applied geological explorations;
  • Permission being granted for exploitation field or permission for exploitation;
  • investment-technical documentation (pre-feasibility study; feasibility study of mining the deposits of mineral raw materials; long-term mining program; mining projects; annual operating plan) drawn up in accordance with Serbian legislation;
  • licenses being issued for the performing of specific activities in geological explorations and exploitation which are issued by the Ministry separately for private individuals (mining engineers and other professionals) and legal entities (mining companies);
  • the payment of fees, taxes, and exploitation fees.
 
Briefly describe the details required and process for an application for mining.

The Mining Act divides mining activities into two stages: geological explorations (standard and applied) as stage one; and exploitation of mineral resources found as stage two.

  • According to the Mining Act, applied geological explorations are performed on the basis of a decision permitting geological explorations issued by the Ministry (Provincial Secretariat) at the request of the company, or other legal entities and entrepreneurs. After submitting the request, if the competent authority founds that the exploration area is free and estimates that geological and other conditions for unhindered exploration are met it will inform the applicant to, in due course, submit the other required documentation in accordance with the Mining Act.

During explorations, the holder of an exploration right is required to prepare and keep reports and project studies on the results of the geological explorations and the other geological documentation in line with the Mining Act.

  • Pursuant to the Mining Act, a holder of explorations or a company, another legal entity, and entrepreneur that a holder of explorations assigned the right of using the results of explorations, or the certificate on reserves and resources, based on this certificate may obtain permission for exploitation and/or exploitation field. An application for permission to use an exploitation field and the amount of reserves and/or resources shall be submitted to the Ministry (Provincial Secretariat) by the deadline determined in the permission for geological explorations or decision on retaining of the right on exploration area. Accordingly, the holder of an exploration right may apply for retention of the right on exploration area in order to prepare documentation for obtaining exploitation permission, i.e. exploitation field permission.
 
What are the requirements for mining exploration?

Under the Mining Act geological explorations may be carried out by a company or another legal entity and entrepreneur registered in the Companies Register of Serbia's Business Registers Agency to carry out these activities, and who has a license for that. Furthermore, geological explorations may be conducted by foreign legal entities under conditions and in the manner prescribed by the Mining Act and separate laws governing the rights of foreign entities in respect of the use of the public interest assets, defense, and confidentiality of data.

The geological explorations of mineral resources for obtaining natural construction materials. After submitting an application, if the Ministry (Provincial Secretariat) established that the exploration area is free, it shall inform the applicant who is obliged to, within 30 days, submit:

  • an excerpt from the Register of Business Entities on registration of the applicant;
  • surveying plan or topographic map;
  • the geological exploration project;
  • the report and confirmation of the technical control of the project;
  • evidence of the land ownership or easements on land;
  • proof of paid republic (provincial) administrative fee.

The applied geological explorations of mineral and other geological resources and applied engineering-geological-geotechnical explorations for construction of the infrastructure facilities. The procedure is the same, except the subsequent deadline for submission of the required documentation, which lasts 90 days for these explorations. Additionally, instead of land certificates, the applicant is obliged to submit evidence of right to use data and exploration results that are the product of geological exploration of another business entity, or are the result of standard and applied geological explorations, if they were used in project development.

 
What are the requirements for mining exploitation/production?

The Mining Act stipulates that the exploitation is carried on on the basis of the decision i.e. on the basis of the following permissions which shall be issued/obtained successively:

  • permission for exploitation field or approval for exploitation;
  • permission for construction of the mining facilities;
  • permission to carry on mining operations;
  • permission to operate the mining facilities.

These permissions are issued by the Ministry or by the Provincial Secretariat (when exploitation is to be carried on on the territory of the AP Vojvodina).

 
Briefly describe the compensation for exploitation/production of mineral resources, if any.

The said compensations are regulated by the Act on Compensations for the Use of Public Goods ("Official Gazette of the Republic of Serbia", Nos. 95/2018, 49/2019 and 86/2019 – adjusted amounts) which imposes, inter alia:

  • compensations for geological explorations;
  • compensations for the use of resources and reserves of mineral raw materials.

Compensations for geological explorations are:

  • compensation for the use of data and documentation of basic geological explorations,
  • compensation for the applied geological explorations,
  • compensation for the retention of right on the exploration area.
 
What is the process for the transfer of mining rights?

Permission for applied geological explorations, permission for retention of the right to use the exploration area, exploitation field permission, and/or exploitation permission, may be transferred to another company, another entrepreneur, or other legal entity. The transfer application shall be submitted to the Ministry, or Provincial Secretariat when the exploration/exploitation is performed on the territory of AP Vojvodina, which renders a decision on transfer of the permission. The transfer application shall be accompanied by the documentation prescribed under the Mining Act and bylaws enacted thereunder.

 
Environmental and safety concerns
How is mining in specially protected areas addressed?

Pursuant to the Mining Act, in a (protected) area which represents a protected nature area, a whole of cultural-historical and construction significance, a tourist-recreational whole, a source of special importance for regional water supply and alike, geological explorations and mining of mineral reserves may only be permitted under the conditions which, in accordance with a separate act – lex specialis, are issued by the authorities and organizations competent for spatial development, nature, and environmental protection, cultural heritage and other authorities and organizations in charge of the specific area relating to protected natural space.

 
What are the general considerations regarding mining and environmental matters?

According to the Environmental Protection Act ("Official Gazette of the Republic of Serbia", Nos. 135/2004, 36/2009, 36/2009 – as amended 72/2009 – as amended, 43/2011 – Constitutional Court ruling, 14/2016, 76/2018, 95/2018 – as amended and 95/2018 – as amended), the environmental protection system in Serbia is ensured, inter alia, by the companies, other domestic and foreign legal entities, and entrepreneurs who in performing economic and other activities (therefore including mining, geological explorations/exploitation) use natural resources, endanger or pollute the environment. Consequently, they are required to:

  • ensure rational use of natural resources;
  • account the environmental protection costs within the investment and production costs;
  • apply environmental protection measures.

Pursuant to the Mining Act, in order to protect the water and environment, companies involved in mining activities are required to:

  • plan measures that prevent endangering the water regime and environment;
  • implement these measures and meet environmental protection conditions;
  • keep data on the types and quantities of dangerous and harmful substances used, emitted or disposed of in performing their activities.

Additionally, investment-technical documentation must be harmonized with environmental protection regulations.

Certainly the most important is the Environmental Impact Assessment Act (“Official Gazette of the Republic of Serbia”, Nos. 135/2004 and 36/2009: “EIA Act”) which regulates the impact assessment procedure for projects that may have significant environmental impacts and the content of the Environmental Impact Assessment Study (“EIAS”). Accordingly, the Environmental Impact Assessment Regualation (“Official Gazette of the Republic of Serbia”, No. 114/2008 :“EIA Regulation”) lists projects that are subject to or may be subject to an environmental impact assessment (i.e. EIAS).

 
What, if any, environmental licensing is required for mining projects?

According to the EIA Regulation, a project related to the underground exploitation of mineral resources may be subject to an EIAS. In such a case, the impact assessment procedure consists of the following stages:

  1. deciding on the need for impact assessment;
  2. determining the scope and content of the EIAS;
  3. decision approving or rejecting the EIAS.

1. The developer should ask from the Ministry of Environmental Protection, or the Provincial Secretariat in charge of environmental affairs when the mining activities are performed in AP Vojvodina, to decide whether the environmental impact assessment is required i.e. whether the EIAS should be prepared. The Ministry (Provincial Secretariat) informs the public and interested entities on the submitted application within 10 days so comments and opinions regarding the application may be submitted within 10 additional days. The competent authority shall render its decision within 15 days following expiry of the deadline for the submission of comments and opinions, which will include the specifics of the project and the location, as well as the submitted opinions. There is no unconditional obligation for preparing EIAS for mining projects. Therefore, if the competent authority decides that an environmental impact assessment is not required, it may determine the minimum environmental protection requirements, in accordance with separate regulations.

2. In case the competent authority decides that an EIAS is required, the developer shall submit a request to the competent authority to determine the scope and content of the EIAS. The EIA Act stipulates the mandatory elements of each EIAS while the Ministry of Environmental Protection prescribes its content in more detail. The procedure and the deadlines (except the opinion submission deadline which lasts 15 days) are the same as for the procedure for deciding whether the environmental impact assessment (i.e. EIAS) is required or not.

3. Finally, the developer is required to prepare the EIAS according to the scope and content as determined by the competent authority and to submit it within one year the date when the scope and content of the EIAS have been determined. The competent authority shall make the EIAS available for public viewing, organize a presentation about it, and conduct public consultations on the EIAS. After that, the EIAS shall be submitted to the specially formed (one or more) Technical Commission to examine it. Ministry shall approve or reject the EIAS based on the Technical Commission's report.

Additionally, the Mining Act provides for licenses for performing specific activities in geological explorations and exploitation. According to the Mining Act, a license for environmental protection activities in the exploitation of mineral resources is required by private individuals in the field of mining. Licensing eligibility criteria include:

  • the appropriate qualifications;
  • authorization to carry on environmental protection activities;
  • five years of working experience in the respective positions.
 
What, if any, safety policies does your jurisdiction impose regarding dams?

The Mining Act explicitly stipulates that the applied engineering-geological-geotechnical explorations for construction of infrastructure facilities (the Mining Act, inter alia, cites high dams) of strategic importance for the Republic of Serbia, shall be performed on the basis of the decision permitting geological explorations issued by the Ministry, at the request of a company or other legal entity. In the event that these explorations are carried on on the territory of the AP Vojvodina, the decision shall be issued by the Provincial Secretariat. Basically, it means that there are no special safety policies regarding dams in Serbia’s mining legislation, save for those outlined above.

 
Mining developments
What do you consider to be the top recent mining development(s) in this jurisdiction?

Mining Projects

In Serbia, about 25 large companies are currently carrying on geological explorations, mainly of metal raw materials, lithium, and boron. These are large companies with foreign capital, registered in Serbia, some of which are global leaders in this field. One of the most important mining projects in Serbia concerns the copper and gold deposit Čukaru Peki, near Bor. According to a preliminary economic study, done using the "pea grain" method, the value of the deposit near Bor is estimated at around seven billion dollars. In addition to these financial aspects, the economic and social aspects of mining projects in Serbia in terms of local employment and attracting new investors, as well as cooperation with Serbian companies are very important.

Legal Framework

The Mining Act adopted in December 2015 established a more favorable environment for investors. Municipalities have been stripped of their role as licencing authorities, which was previously assessed as one of the biggest bureaucratic obstacles. One of the most significant changes introduced by the Mining Act is the concept of mineral and other geological resources of strategic importance (oil, gas, coal, copper, gold, zinc, boron, lithium, oil shale, etc.). In the case of mineral resources of strategic importance, land can be expropriated even when the exploitation is carried out by private companies.

 
What do you believe will be the top mining developments in the next few years in this jurisdiction?

Mining Projects

The top mining developments in the next few years in Serbia are related to another significant world-class project which includes one of the most important global lithium-borate deposits – Jadar, located near Loznica. This deposit contains jadarite – a lithium-sodium- borosilicate mineral and Jadar is the only place in the world where this mineral can be found. As the lightest metal in the world, lithium is used for a wide range of products, the most notable of which include batteries for hybrid and electric vehicles, but also for mobile phones and laptops. The deposit also contains borates, which are used for the production of heat-resistant glass, optical fibers, ceramics, fertilizers, detergents, etc. Jadar's deposits are estimated at 135.7 million tons, with an average concentration of 1.86% of lithium oxide. If developed, the project has the potential to supply a significant percentage of global demand for lithium. The project is currently in the pre-feasibility stage, which means that geological explorations are finished, and exploitation is expected to commence at the end of 2024. i.e. at the beginning of 2025.

Legal Framework

The Mining Act is based on the principle that mining, as an activity that is among the absolute biggest polluters in Serbia, has no special responsibility for environmental protection. Consequently, mining projects in Serbia are a driver of progress, but also an ecological unknown. Precisely in the field of environmental protection, there is a lot of scope for the development of the mining industry through raising environmental awareness and involving the local population in mining activities. Currently the EIAS rules are the only environment safeguard when it comes to mining.

 

This guide contains summaries of general principles of law. It is not a substitute for specific legal advice and should not be relied upon in relation to the application of the law or subject matter covered.

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