The legal regime of mining permits
Mining activity permits in Georgia are regulated by the law on licenses and permits. A mineral extraction license is in general issued through the ordinary auction-based track, yet the law provides an exception — direct issuance, which serves environmental and water-supply purposes. An applicant for a mining permit therefore needs to know both routes: the auction procedure and its starting price on the one hand, and the conditions of direct issuance together with the subsequent reporting obligations on the other, because holding a license does not mean exemption from control.
Direct issuance of a mineral extraction license
The licensing authority may issue a mineral extraction license directly only with the consent of the Government of Georgia and only for defined purposes. Two cases exist: first, to a person holding a water-supply license provided for by item 87 of Article 6 of the law, for the extraction of underground fresh water in order to supply consumers with drinking water; second, for tourism and recreation purposes, for the extraction of underground mineral waters for therapeutic mud or external use such as therapeutic baths. In addition, direct issuance is possible on a land plot in private ownership for the extraction of underground fresh water for entrepreneurial purposes, with the right to extract no more than 5 000 cubic meters per year. If the water-supply license is cancelled, that becomes a ground for cancelling the extraction license as well.
An applicant seeking direct issuance submits a written application to the licensing authority, which must contain information about the volume, the location and the purpose of the mineral to be extracted. The application is accompanied by an extract from the register of entrepreneurs and non-commercial legal entities, by copies of identification documents for a natural person, or by founding documents for a public-law legal entity; in the water-supply case, by a document confirming possession of that license; in the private-land case, by a document confirming ownership of the plot; and also by proof of payment of the license fee, whose amount is determined by the law on license and permit fees. The authority establishes the requirements for the use of the specific object and additional license conditions, while the general issuance procedure is set by the Government.
Starting price, environmental decision and duration
The rule for determining the starting price of a use license and for settlement is established by the licensing authority in compliance with the principles laid down by law. Where the issuance of a use license provided for by items 1, 4, 5 and 9 of Article 7 of the law requires an environmental decision under the Environmental Assessment Code, extraction of minerals is possible only after that decision has been issued. Where a decision refusing the activity has been adopted, or the environmental decision establishes conditions that materially change the license conditions, the final or proposed amount recorded at the auction is returned to the license holder upon request. When determining the duration, the properties of the object and the technological character of its use are taken into account, and issuance for an indefinite term is impermissible. Extension of the term is possible only with the consent of the Government.
Division and transfer of a license
A license holder is entitled to divide the use license into several parts and to transfer the right of use or a part of it to another person by lease or into ownership. Upon alienation, the holder must submit the relevant documents to the licensing authority, which enters the changes into the license registry within 10 calendar days and issues the appropriate license certificate. If, before the alienation, the holder also held an environmental decision, both parties apply for the entry of changes into the registry of decisions and for the determination of environmental conditions, and the liability of each subject for breach of the environmental conditions is determined individually. The authority's failure to enter the change into the registry does not prevent the acquirer from exercising the use.
Control over compliance with license conditions
Compliance with license conditions is controlled by the licensing authority — only through selective inspection or regular reporting. Unless otherwise provided by law, the license holder reports annually, from 1 April to 1 May, in writing; a holder that receives the license within 6 months before the start of the reporting period is not bound to report. During a calendar year, unless otherwise provided by law, control may be carried out only once, while for the activities provided for by items 72 to 72⁵ of Article 6 of the law it may be carried out three times a year. The decision to conduct a selective inspection is an administrative act that must be presented to the holder, and the act drawn up after the inspection is entered into a special registry. The authority has no right to examine circumstances that are not directly connected with compliance with the license conditions.
Permit application and documentation
A permit seeker submits a written application to the issuing authority under the procedure established by Chapter VI of the General Administrative Code. The application must satisfy the requirements of Article 78 of that Code and contain an indication of the type of permit sought and a list of attached documents. It is accompanied by extracts from the public registry or identification documents, by founding documents in the case of a public-law legal entity, and by proof of payment of the permit fee. Additional attached documents may be prescribed only by law. Confirmation of additional permit conditions takes place in separate administrative proceedings, copies of the application are transferred to another administrative authority no later than within 3 days, and the permit holder must notify the issuing authority of any change of data within 7 days of the change.
How we help
Our team assists in assessing the availability of direct issuance, in preparing the application and documentation, in formalizing the division and transfer of a license, in reporting and selective inspection procedures, and in managing disputes connected with mining licenses.