Types of use licences
The legal basis of mining activity is written into the Georgian Law on Licences and Permits, where we find the list of use licences. The law defines the following types: the licence for the extraction of useful minerals; the licence for the use of subsurface space; and the general licence for the use of oil and gas resources, which is divided into two special licences — the special licence for the exploration and the special licence for the extraction of oil and gas. The list also includes the special licence for a hunting economy, the fishing licence, the licence for the use of the radio frequency spectrum, and the licence for the use, for export purposes, of fir cones and the bulbs of snowdrop and the corms of colchicum included in the annexes of the international convention.
This division is not formal: each type tells the investor its own subject. Work on minerals requires an extraction licence, the technical use of subsurface space an appropriate use licence, and an oil and gas project fits into the two-stage general licence — first exploration, then extraction. The hunting economy and fishing constitute separate regimes of natural resources with their own licences.
Direct issuance of the mineral extraction licence
The basic rule is an auction, but the law also defines cases of direct issuance. With the consent of the Government of Georgia, the licensing authority may issue the mineral extraction licence directly: to a holder of a water supply licence — for the extraction of underground fresh water for the purpose of supplying consumers with drinking water; and for tourism and recreation purposes — for the extraction of underground mineral waters for medicinal mud and/or external use (medicinal baths), for extraction or exploration-extraction. The linkage is noteworthy: the annulment of the water supply licence is a ground for the annulment of the extraction licence — the two authorizations are legally tied to each other.
A special case is a plot of land in private ownership: for the extraction of underground fresh water for commercial purposes the licence may be issued directly, with the right to extract no more than 5 000 (five thousand) cubic metres per year. An interested seeker submits a written application containing information on the volume, location and purpose of extraction of the useful mineral; it is accompanied by a registry extract, a copy of an identification document or founding documents depending on the seeker's legal form, in the respective case a document confirming the water supply licence or ownership of the land plot, and also a receipt for payment of the licence fee. The licensing authority establishes requirements for the use of the specific object and additional licence conditions; the procedure for direct issuance is determined by the Government of Georgia.
Issuance by auction
A use licence is issued by auction, except for the case provided by law. The commencement of proceedings may be based both on the seeker's application and on the decision of the licensing authority — and that decision is an administrative act. The authority establishes requirements for the use of the specific object and additional licence conditions, and, taking into account state and public interests, may set quantitative, qualitative and time-defined norms and rules of use. If the use of a resource by its nature covers an activity provided for by another licence or permit, obtaining that licence or permit separately is not necessary.
Every seeker who satisfies the licence conditions and undertakes to comply with the requirements set by the authority has the right to participate in the auction; the winner is determined on the basis of the assumption of the obligation to satisfy the established norms and rules and the submission of the highest price. Information on an auction is published no later than 1 month before it is held on the authority's website; in the case of a mineral extraction licence, the information is published no later than 10 days before the auction on the unified electronic auction platform, and where the auction is held through another website the authority must publish the relevant information on its own site no later than 3 working days before the auction date. The published information contains the name of the authority, the object of the licence, the deadlines for accepting applications and holding the auction, the licence conditions, the requirements, the criteria for determining the winner and other data; the quantity, volume and procedure of use of the object are determined by the authority, which also sets the rules of conduct of the auction, determination of the winner and issuance of the licence certificate. Studying these elements in advance allows the seeker to build an auction strategy correctly.
In planning a mining project two questions are thus resolved: which licence the project needs from the list, and by which route it is issued — by auction, as the general rule, or directly, in the exceptions named by law. In both cases the requirements and additional conditions established by the licensing authority form the framework within which the future licensee operates.
Frequently Asked Questions
Frequently asked questions.
When is an extraction licence issued directly?
With the Government’s consent — for drinking subterranean water, therapeutic mud, mineral waters and fresh water on private land (up to 5,000 cubic metres a year).
How is the auction winner revealed?
By assuming the usage norms and offering the highest price.
When is auction information published?
No later than 1 month before the auction on the issuer’s website; for mineral extraction — no later than 10 days on the platform.
Is an additional licence needed?
No — if the use and its conditions by nature cover another licence’s activity, no separate authorisation is needed.
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