Serbia new mining law, bigger control of national resources: Special status for Gazprom

, Mining

Serbian Government will consider draft’s final version for the Law for Mining and Geological research, after public discussion on 9 February. The law will enable state to be real owner of natural resources and to control them more, Minister of Resources Milan Bacevic said. Draft predicts mining rent fee increase.

Large number of foreign and domestic companies has searched for ores and minerals in Serbia in the last few years. Minister of Natural Resources, Mining and Spatial Planning, Milan Bacevic promises that new law won’t endanger their work, but it will put order in the area.

“State wants to have control package in everything, to have 51% of natural resources in the mines. There was enough of natural resources waste”, Milan Bacevic stresses.

The law predicts bigger mining rent fee also, but it is not known if it will be valid for oil and gas research and exploitation. Serbia has obligated with international contract with Russia not to increase mining rent fee to GazpromNeft while NIS investments are in progress, or investments would be lower.

“If we invest in oil processing capacities and oil production and research, Serbia will get double or three times more than with mining rent fee increase”, Managing Director of NIS, Kiril Kravcenko underlines.

According to his words, NIS will respect made decisions. “We rely on two states’ agreement and we base our investments on it”, Kravcenko adds.

Minister of Energy, Development and Environment, Zorana Mihajlovic warns that 3% mining rent fee is small and increase is necessary.

“It would be completely normal to sit and discuss with Russia about both sides’ interest, considering relations between these two countries”, Zorana Mihajlovic said.

Mihajlovic believes that our country interest is that NIS does good business, to make a profit and dividend, but state should get some contribution for use of these minerals.

Minister Bacevic thinks that relations between these two countries should not worsen because of 2% percent of mining rent fee increase.

“Do we need to worsen relations that have been good so far, or we should terminate the contract so budget can be bigger for those 2% of mining rent fee”, Bacevic emphasizes.

Long negligence to rent fee incomes

According to his words, mining rent fee is low, but there is a row of many other privileges that no state in Europe has. “I don’t want us to lose these privileges because of 2% that are the subject of interest at the moment, Bacevic concludes.

According to experts, Serbia has neglected incomes from mining rent fee for years, and this income can be very significant for budget.

“Our mining rent fee is among the lowest in region and it has to be increased necessarily, but we have should think about it few years ago when those resources were given to foreign investors”, editor of the magazine “Business”, Radojka Nikolic estimates.

Government will decide. We should have on mind that even if the mining law is changed, it has smaller power than the international contract.

Source Serbia Energy Magazine