• MINING LEGISLATION IN ALBANIA

OLTJAN HOXHOLLI

MINING LEGISLATION IN ALBANIA

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According to the Albanian law, reconnaissance is not treated as a separate activity. Reconnaissance and exploration rights are granted by the same permit, i.e. a reconnaissance and exploration permit. Such permit is granted for a three-year period, extendible for one additional year, for metallic, non-metallic, bitumen, coal, and radioactive minerals, while for construction minerals such permit is granted for a one-year period. Mining activity may be carried out by any legal entity, established and registered in Albania, being a holder of a mining exploitation permit. Such permit is granted for a period of 25 years, renewable for an additional period of 10 years following the request of the holder of the permit.
In exceptional cases the exploitation permit can be granted or extended for a duration of 99 years, provided that the implementation of the investment plan is considered to be in the economic or social interest of the community. In this case, an agreement providing favorable conditions may be completed between the holder of the permit and the relevant Ministry. The issuance of an exploitation permit for 99 years and an agreement providing favorable terms and conditions must be approved by the Albanian Parliament .

Albanian law provides for four groups of minerals, namely: (a) metallic, non-metallic, coal and bitumen; (b) construction minerals; (c) precious and semi-precious minerals; and (d) radioactive minerals.
In general, the same procedure applies for the above group of minerals, however there are minor differences. For minerals in group (a) (b) and (c), Albanian Law provides for three separate types of permits, namely: (I) a reconnaissance and exploration permit, (II) an exploitation (mining) permit, and (III) a combination of (I) and (II).
However, for minerals of group (c) Albanian law provides for a unique permit, namely a reconnaissance, exploration and exploitation (mining) permit.
Furthermore, for minerals in group (a) and (d) the reconnaissance and exploration permit is granted for a period of three years, extendible for one year, while for minerals of group (b) the reconnaissance and exploration permit is granted for a period of one year, not renewable/extendible.
The issuance of the permits for all groups of minerals must be approved by the Ministry, while for minerals of group (d) the relevant permit is approved by the Council of Ministers
The exploitation permit for minerals of group (b) may not be granted for the exploitation of agricultural land of categories I to IV.

Natural oil and gas are subject to the provisions of different laws, other than those regulating minerals, namely Law 7746/1993 “On hydrocarbons (exploration – production), regulating the exploration and production of hydrocarbons”, and Law 9946/2008 “On the natural gas sector”, regulating the sector of production and commercialization of natural gas.


Foreign applicants are subject to the same rules for mining permits in Albania as those applicable for Albanian natives.

Albanian law does not provide for any restriction in relation to a change of control of a company holding or applying for a reconnaissance, exploration or mining permit.

Mining permits are transferable provided that prior approval of the Minister of Energy and Industry is obtained and that the mining activity has already started. Exceptionally, mining permits granted following a bidding procedure as well as mining permits for which an agreement providing favorable conditions is concluded, are not transferable c


There are no requirements for ownership by indigenous persons or entities.


The Albanian State is entitled to freely acquire shareholdings in a mining company.

There are no limitations on the nature of the legal entity holding rights in the mining sector.


The right to carry out reconnaissance, exploration and mining may be transferred upon approval of the Ministry, provided that the transferee complies with the following requirements:
• it is a legal entity, established in accordance with Albanian law;
• it accepts all the obligations arising from the mining permit both towards the State and third parties;
• it acknowledges that the constructions and installations supporting the primary operations of the mining activity constitute a subsidiary and integral activity of the mining rights and as such are transferred along with the latter; and
• it disposes all the required financial and professional means for the purpose of completing the investment and the environmental protection project

Exceptionally, the right to conduct reconnaissance, exploration and mining granted by virtue of public competition procedure, as well as a favorable condition agreement, may not be transferred

Albanian law does not explicitly provide for the right of the permit holder to use the permit as security interest. However, considering that, in principle, reconnaissance, exploration and mining permits are not transferable without the prior approval of the Ministry, the above permit may not be used as a security interest without being approved by the Ministry. So far there has been no such practice.



The holder of a mining permit should take the necessary measures to ensure that the equipment, devices, explosives and materials used by the employees are suitable for the work and that the safety and the health of the employees is guaranteed; the mines or quarries, equipment, devices, explosives and materials are maintained during the exploration at a level ensuring that the fundamental requirements of safety at work are met; the employees are informed and trained in relation to the use of the equipment, devices, explosives and materials and their relevant risks; and the employees in charge of repairs and maintenance are duly qualified for carrying out such activities.
The MIRD is notified immediately in case of any accident in mines or quarries


Administrative Aspects

The central titles registration offices that exist in Albania are the following:
the NLC is responsible for the registration of the permits, licenses and authorizations that are granted in the Republic of Albania by the competent authorities; and
the Central Immovable Property Registration Office is the competent authority for the registration of immovable property.
The MIRD keeps a register of the entities holding mining permits, and which entities work with explosives

Is there a system of appeals against administrative decisions in terms of the relevant mining legislation?
Administrative decisions in relation to the mining sector may be appealed before the competent administrative courts, as with all other administrative decisions.
Constitutional Law

Is there a constitution which has an impact upon rights to conduct reconnaissance, exploration and mining?
The Albanian Constitution provides that the State aims at the reasonable exploitation of the forests, waters, pastures and other natural resources according to the principle of sustainable development (Article 59 (dh) of the Constitution).



Albania has entered into several bilateral investment promotion and protection agreements both with EU Member States and non-EU Member States, including the USA and China.


Taxes and Royalties

Exploration and mining activities are not subject to any special rules in relation to taxation matters, except of the payment of the royalty tax.


Any legal entity operating in the mining sector is subject to the payment of the royalty tax that is levied over the gross sales at a rate depending on the type of mineral as determined in Law 9975/2008 “On National Taxes”.


The local or municipal authorities may approve decisions if so stipulated by the National Legislation, and in any case such municipal decision may not supersede the National Legislation.
The municipalities are entitled to approve specific temporary local taxes and/or fees, however within the limits imposed by the National Legislation.


The holder of an exploration right for metallic, non-metallic, coal and bitumen is entitled to partially relinquish the permitted area upon expiry of the second year of the permit and provided that it pays a fee amounting to 150,000 ALL (approx. 1,100 USD) for each square meter.


The holder of an exploitation right for metallic, non-metallic, coal and bitumen is entitled to terminate the production activity in the permitted area provided that it has notified the Ministry at least one year in advance, and to temporarily terminate the exploitation activity provided that it has notified the Ministry 90 days in advance. Both aforementioned cases require the prior approval of the Minister of Energy and Industry, in which case the annual guarantee for the investment realisation is reimbursed to the holder of the rights

Albanian law stipulates the right of the State to cancel an exploration or mining right in case the holder of the mining permit:
has filed documents containing false data or fails to fulfil the terms and conditions contained in the permit;
has obtained a mining permit for an area that overlaps, partially or entirely, with another area covered by a mining permit issued earlier in accordance with the legislation in force;
is not able to start the mining activity in due time, as determined in the respective permit;
suspends for one year or terminates the mining activity without notifying in advance the competent authorities;
is not able to submit within 30 days of each year, the following documents: the financial guarantee for the implementation of the rehabilitation plan; the financial guarantee for the implementation of the minimum working programme; and the financial guarantee for the implementation of the investment;
fails to pay the royalty tax within the required deadlines;
uses harmful practices for the exploitation and processing of minerals;
is not able to comply with the requirements of the rehabilitation plan, closing plan of the mining activity and the waste management plan;
is not able to fulfil the duties that the competent authorities have assigned to the holder of the permit;
is not able to submit the required information;
is not able to realise the minimum working plan;
is not able to realise 90% of the value of the investment for two consecutive years;
is not able to submit to the competent authority within 30 days as of the termination of the respective year, the financial and technical report of all the performed works and fails to fulfil the obligations arising from the permit; and/or
is not able to notify in due time the intention to reduce the amount of production by more than 20% in relation to the approved production plan.
The exploration and mining permit is also cancelled in case of revocation of the respective environmental permit by the competent authority.
Additionally, the exploration permit may also be revoked for the following reasons:
upon request of the holder of the mining permit, provided that the latter has fulfilled all the obligations arising from the exploration permit;
in case the exploitation becomes impossible, due to natural or geological reasons;
in case the exploitation of the mine presents a geological or environmental risk ; and
in case the geological resources are depleted, upon request of the holder of the permit.

Tue May 10 23:16:43 CEST 2016




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