Concession for exploration and recognition mineral beds



Concession for exploration and recognition of mineral beds

This type of concession is applicable to all minerals included in art. 10 section 1. of Mining and Geological Law (hereinafter: MGL), which includes particular types of minerals considered as “mining property” (in short, it means that particular minerals like carbon, lignite, oil etc. are the property of Treasury). Many of those minerals are commonly described as strategic resources, thus in some cases, the entity which applies for concession is obliged to fulfil additional requirements or the procedure requires involvement of several State authorities.

 

Core of the concession

To fully understand the nature of concession for exploration and recognition of mineral beds, it is required to familiarize with the content of art. 15 MGL. This article providing a guarantee for obtaining legal title to exploitation the mineral beds for entities, which earlier conducted the works within the scope of exploration and recognition. The main justification of such provision is the cost of conducting exploration and recognition works, which is relatively big.

Nevertheless, the entity may apply for a concession for exploitation for mining bed only when jointly fulfil the permissions below:

(i) explore mineral deposit subjected to mining property,

(ii) dully documented the mineral deposit within the scope which allows to prepare mining deposit development plan

(iii) obtain decision which confirms the geological information.

Scope of the concession

The concession may be granted jointly for exploration and recognition of mineral beds or separately just for exploration or recognition. It shall be noted, that only natural accumulation of raw material can be considered as mineral bed. It means that the concession does not include permission to conduct works with any anthropogenic materials like inter alia colliery tips.

The term ‘exploration’ refers to performing geological works leading to discover and initially documented the existence of mineral deposits. Term ‘recognition’ is considered as performing geological works within the area of initially documented mineral deposit.

Requirements for obtaining the concession

The Concession for exploration and recognition of mineral beds is required with regards to all minerals, which are within the scope of “mining property” accordingly with art. 10 section 1. GML. The catalogue of those minerals is as follows:

  1. hydrocarbon deposits,
  1. coal deposits,
  1. methane as accompanying mineral,
  1. lignite,
  1. ores except bog iron ores,
  1. metals in natural,
  1. radioactive elements,
  1. sulphur in natural,
  1. salt,
  1. gypsum and anhydrite,
  1. gemstones.

According to point 1. above, the art. 6 GML provides legal definition of hydrocarbons. It states that as hydrocarbons are considered: crude oil, natural gas and theirs natural derivatives as well as methane occurring as accompanying mineral. It is crucial to remember about this, because provisions of GML imposes additional requirement of participating by applicant in qualification procedure before applying for concession for exploration and recognition the hydrocarbons beds in front of State authority.

Concession-granting Authority

Minister of Environment grants the concession for exploration and recognition of mineral beds. The concession is granted by issuing appropriate decision after conducting appropriate procedure. Issuing concession for exploration and recognition of certain mineral beds requires obtaining opinion or making arrangements with other State authorities by Minister of Environment (e.g. issuing a concession for exploration or recognition radioactive elements’ beds requires obtaining opinion of Chairman of National Atomic Energy Agency). The concession for exploration and recognition of mineral beds shall be obtained before commencing the works.

Procedure of obtaining concession for exploration and recognition of mineral beds

The concession is granting only upon appropriate motion filled to Minister of Environment. However, in case when entity applies for obtaining concession for exploration and recognition of hydrocarbons, there are additional requirement of participating first in qualification procedure and then in public tender conducted by Minister of Environment.

The main goal of qualification procedure is to secure State’s interest and verify the entity which applies for such concession. Minister of Environment carries qualification procedure in cooperation with General Inspector of Financial Information, Financial Supervision Commission, Head of Internal Security Agency and Head of Intelligence Agency. The entity, which applies for a concession is, assessed within the scope of its experience in the field of exploration and recognition the minerals. The procedure of assessment includes also examination with the scope of being controlled by other entity from third country and whether this fact affects the security of State. The positive assessment is valid for 5 years and entitles to multiple starts in tenders.

In all other cases which are not connected to hydrocarbons, ordinary procedure is applicable.

Motion for granting concession shall indicates inter alia:

  • the owners of property on which the entity will conduct the works,
  • applicant’s entitlements to property,
  • time for which the concession shall be granted,
  • funds which will secure proper execution of concession,
  •  list of areas covered by any environmental protection forms
  • environmental policy.

Motion shall be dully justified and well documented. Moreover, all motions for concession for exploration and recognition of mineral beds shall contain also the purpose and scope of geological works and shall contain information about works to be done to achieved intended purpose, including technologies as well as minimum category of explored mineral bed.

Assessment the motion and decision

The main criteria of assessing motions are the scope of proposed geological works, estimated (proposed) period of concession (also the term of commencing the works), financial abilities of entrepreneur and technology which will be use to perform the works.

After assessment procedure, Minister of Environment grants a concession for exploration and recognition to entrepreneur, which obtain the highest rating.

Content of concession

Each concession determines especially: type and method of conducting the intended activity, area covered by concession, timeframes of validity and specific date of commencing the activities. Moreover, concession for exploration and recognition the mineral beds indicates also:

  • purpose, scope and method intended geological works and minimal category of mineral bed recognition,
  • scope and schedule of transferring geological information and samples obtained during geological works,
  • fee for activities described in concession.

Limitation

The surface area covered by the concession for exploration and recognition of mineral beds shall not exceed 1200 km2.

 

Concession granting proceedings in Poland are quite extensive and complicated due to the fact that State authorities very carefully analyses all the applicants which tries to obtain concession for exploration and recognition of mineral beds (especially within the scope of hydrocarbons).

Please contact with our experienced lawyers who will provide you with necessary advisory and other legal services regarding concession proceedings.

Contact us at info@dudkowiak.com