Ukraine: new procedure for special mining permits

New procedures have been introduced for obtaining special mining permits in 2008. This continues the Ukraine Government’s recent practice of renewing procedures on an annual basis.

The key changes are:

• a special permit will only be issued after the State Commission on Natural Resources Reserves has investigated and approved the oil, gas or other field to be explored. In certain cases, sample mining deposits based on an official SCNRR validation have to be included in a deposits reserve held by the State Fund of Natural Resources (previously, the deposits needed only be based on an estimate by the SCNRR
• an auction will be required for special permits to explore and produce peat or any natural resources of local significance
• special permits for natural gas for exploration, piloting and commercial production of a reserve to be used for residential customers will not require an auction
• special permits to produce coal as an investment project now require an auction
• where an auction is not required, special permits will be issued within 70 days (previously 90 days)
• the issue of special permits where an auction is not required will now be decided by Ukraine’s Cabinet of Ministers or by the Inter-Departmental Working Group on Subsurface Use Issues (whose members are approved by the Cabinet of Ministers) there will be public disclosure and monitoring of information about special permits issued without auctions
• applications to extend special permits will now be dealt with within 70 days (previously 90 days) and no longer require approval by the municipalities
• special permits will only be re-issued when:
  • the permit holder’s business is reorganised and the new entity resulting from the reorganisation intends to continue activity under the permit, or
  • the permit holder changes its name, or
  • the decision to re-issue is taken by the Cabinet of Ministers, or
  • there is a change in the special conditions specified in the permit and in the conditions for subsurface use specified in the agreement
• special permits may be suspended where mining has been conducted without a geological survey, or where any natural gas extracted is not sold to Naftogas Ukraine, as required by law
• special permits may be cancelled if the permit holder (or its subcontractor) does not have a licence to carry out exploration or production activity, or has suspended the works specified in the special permit for more than two years (180 days in the case of oil and gas deposits)