The Principle of Issuance by Auction
The licensing core of mining law is the use license regime of the Georgian Law on Licenses and Permits, and in the case of mineral resources it is issued by auction, save for the case provided for by law. The basis for starting the proceeding for issuing a use license for a specific state resource is both the application of a license seeker and the decision of the licensing authority; that decision is an administrative act. For the issuance of the license, requirements for the use of the specific object and additional license conditions for the seeker are established. The licensing authority, taking into account state and public interests, may establish quantitative, qualitative and time-defined norms and rules of use. Where the use and its conditions essentially include an activity covered by another license or permit, obtaining that separate license or permit is not necessary. By auction the license is issued on the basis of assuming the obligation to comply with the norms of use and submitting the highest price, and every seeker satisfying the license conditions has the right to participate.
Publication of Information
Information on holding an auction for the issuance of a use license is published by the licensing authority on its website no later than 1 month before the auction, and in the case of a license for the extraction of usable minerals — no later than 10 days before, on the electronic auction website. Where the auction is held through another website, the licensing authority must publish on its own website, no later than 3 working days before the date of the auction, the relevant information with the date and the address of the website through which the auction is held. The published information contains the name of the licensing authority, the specific object of the use license, the deadlines for accepting applications and holding the auction, the license conditions, the requirements and the criteria for identifying the winner. The procedure for holding the auction, identifying the winner and issuing the license certificate is established by the licensing authority.
Starting Price, Term and the Environmental Condition
Under Article 19 of the law, the procedure for determining the starting price and for settlement is established by the licensing authority. Where the issuance of the use license requires an environmental decision, the extraction of usable minerals is possible only after that decision has been issued; where the activity has been refused or the conditions established substantially change the license conditions, the license holder is returned, upon request, the amount recorded at the auction. The validity term of the license is determined by the licensing authority for the purpose of the optimal price; issuance for an indefinite term is impermissible, and in determining the term the nature of the object and the technological character of the use are taken into account. With the consent of the Government, the licensing authority may extend the term of the license.
Transfer of the License
Under Article 20 of the law, the license holder is entitled to divide the use license into several parts and to transfer the right of use or part of it to another person by lease or into ownership. Upon the alienation of the license or part of it, the holder is obliged to submit the relevant documents to the licensing authority, which enters the changes into the license registry within 10 calendar days and issues the appropriate certificate. Where before the alienation the holder was also the person to whom the environmental decision was transferred, after the completion of the procedure both parties apply for the entry of changes into the registry of decisions, and liability for breach of the environmental conditions is determined individually for each subject according to the conditions established for it. The licensing authority's failure to fulfill this obligation does not impede the acquirer's exercise of the use.
Control and Reporting
Article 21 of the law regulates the control regime: compliance with the license conditions is controlled by the licensing authority, and control is exercised only through selective inspection and/or regular reporting. The license holder annually, from 1 April to 1 May, submits a written report on compliance with the license conditions, except where the license has been received within 6 months before the beginning of the reporting period — then the reporting obligation does not exist. Where the fact of compliance is not clearly declared in the report, the licensing authority may demand confirming information within a reasonable period; non-fulfillment of that demand is a ground for liability. A selective inspection is carried out by administrative act, its act is entered into the registry, and within a calendar year control may be exercised only once — except for the exception provided for by law, where the licensing authority of certain activities may exercise control three times a year. The licensing authority has no right to inspect circumstances not directly related to compliance with the license conditions.
Frequently Asked Questions
Answers to the questions asked most often about mining licenses.
How is a use license issued?
By auction — on the highest price and the obligation to comply with the norms of use; every eligible seeker may participate.
When is auction information published?
No later than 1 month in advance on the website; for extraction licenses — 10 days in advance, on the electronic auction site.
Can the license be transferred?
Yes — by division and by lease or into ownership; the authority enters the change into the registry within 10 calendar days.
How We Help on Legal.ge
Mining licensing demands precise deadlines and formalities, from the auction to the annual report. On Legal.ge an experienced lawyer will help you assess the auction conditions, formalize the transfer of a license and comply with the license conditions. Submit a request on the site and get qualified assistance.