Serbia Mining reform, the report: Investors unhappy with the new law

, Mining

The introduction of mandatory strategic partnership with state in mineral materials of strategic importance research and exploitation can drive off investors from Serbian mining sector- experts and investors estimated.

Solutions to the limiting exploitation of approvals for 5 years and high mine rent fees are problematical- experts and investors estimated on the first public discussion for preliminary version of the geological research and mining law draft in Belgrade.

Professor of Mining Geology University, Jelenkovic Rade, said that mining rents fees’ amounts should be decreased in agreement with the companies because investors can easily give up investing in Serbia.

Jelenkovic said that the way of mining rent fees’ determining is not completely clear, he stated that there are certain intentions to determine them once a year, in the last quarter of ongoing for the following year.

“This is not a good solution. Fees must be stable in five years’ period at least”, he said.

According to his words, fees for metal materials are with proposed solution determined to 5, 10 or 15 percent of market value depending on material. The lowest values are for raw metal from foundry and the highest are for raw minerals.
Mining rent fee is determined to be up to 15% percent which means that it can be 1% also.

“This solution is undefined and it demands serious revision”, Jelenkovic stressed.

Tomasevic: Higher expenses of investors

The lawyer, Nikola Tomasevic from the JWC office who represents Rokvul Company, said: “Investors’ expenses for mineral exploitation in Serbia will be significantly increased on the base of proposed version of law draft.”

“This refers on mining rent fees’ increase, introduction of important bank guaranty in amount of 10% of research amount and there is also a commitment of concluding a contract with strategic partnership with the state”, he said.

According to proposed law solution, strategic mineral materials in Serbia are coal, oil slates, oil, land gas, gold, silver, copper, lead, zinc, molybdenum, nickel, lithium, Bor’s minerals, phosphates and fluorites.

According to the law draft, it is necessary to sign a contract for strategic partnership with Serbia before research and exploitation of these materials.

Tomasevic said that law does not define the content of this agreement.

“Minister or the Government will be able to decide independently what will be written in this contract, how big will be the investor and state’s obligations. All of this brings insecurity to investors and I’m afraid that if these solutions stays in the law, they will influence new investors’ arrival negatively”, Tomasevic emphasized.

Nikolic: Strategic partnership is not defined

Chairman of Srbija-nikl, Dragoslav Bozovic, said that strategic partnership is completely undefined and he stressed that it is very important for foreign and domestic investors to precise this question and to know in advance how much money will be invested and where.

He said that limiting the permission for exploitation on five years brings insecurity to investors. He pointed that exploitation of some site can last for decades.

Bozovic said that the law is required to precise conditions for prolonging of site exploitation.
As Bozovic underlined, decision-making power is being taken away from local governments with these proposed solutions of the new law.

Subaranovic: Local governments will decide, too

State Secretary in the Ministry of Natural Resources, Mining and Spatial Planning of Serbia, Tomislav Subaranovic said that local governments will determine a lot about research of mineral materials with newly proposed solutions, like it has been so far.
He précised that authorities in local governments remain in environmental influence estimation and approvals and Ministry will only issue solutions if everything is prepared and all documentation is in order.

“Local governments won’t do these jobs they did before because they didn’t do anything in 98% of cases, they returned everything to the Ministry”, Subaranovic said.

Source Serbia Energy