Mining Operations Council of Ministers Regulation No. 423-2018

PART TWO LICENSES OF MINING OPERATIONS

 

CHAPTER ONE APPLICATIONS FOR LICENCES

 

  1. Applications for Reconnaissance License

Application for reconnaissance license shall be attached with the following particulars:

 

1/ where the applicant is a natural person:

 

  1. a) his full name, sex, age, nationality, place of birth and copy of identification card;
  2. b) profession;
  3. c) place of residence and address;

 

  1. d) a simple geometrical map that indicates the proposed mining area with a type of mineral subject to a license;

 

  1. e) intended work program and expenditure during the license period;

 

  1. f) evidence that shows the reconnaissance work could cause damage to the surface of the earth or not;

 

  1. g) where the work program is prepared by the applicant’s employee, the full name, profession, copy of Identity Card of the employee who prepared the program and employment contract as the case may be;
  2. h) where the work program is prepared by the consultant; renewed trade license, Tin Number, copy of a certificate of professional competence for consultancy service; and

 

  1. i) other relevant documents the Licensing Authority may determine by directives;

 

2/ Where the applicant is a legal person   :

 

  1. a) its name, nationality, and capital;

 

  1. b) address of its head office, name and address of its representative in Ethiopia;
  2. c) information’s specified in paragraph (d), (e), (g), (h) and  (i) of sub-article (1) of this Article; and

 

  1. d) the following documents duly certified by the appropriate government organization:

 

(1) copies of its memorandum and articles of association;

(2) the name and evidence of the natural person who is designated to sign on behalf of the applicant organization;

 

  1. Application for an Exploration Licenses

 

Application for an exploration licenses shall be attached with the following particulars:

 

1/ where the applicant is a natural person:

  1. a) particulars stated under paragraph (a) to (i) of Article 3(1) of this Regulation, except the particular stated under paragraph (f);

 

  1. b) the applicant’s reconnaissance license number, if any, on which the application is based;

 

  1. c) a geo-science information known to applicant regarding the minerals and the area for which the license is requested including a work program and proposed expenditure during the term of the license;

 

  1. d) documents showing environmental and natural resource impact assessment and restoration plan;

 

  1. e) explanation showing the applicant’s technical competence and experience;
  2. f) the applicant financial situation which is approved by the competent government organ;
  3. g) evidence showing the geographical coordinates of the area subject to an application;
  4. h) a map prepared in accordance with paragraph (d) numbers (1) and (2) of sub-article (1) of Article 6 of this Regulation;

2/ where the applicant is a legal person:

 

  1. a) particulars specified under Article 3(2) of this Regulation;

 

 

 

  1. b) copies of the balance sheets, profits and loss statements and auditor’s reports for the previous three years,

 

  1. c) where the entity administered by Board of Directors, the following documents duly certified by the appropriate head of such entity:

 

(1) copy of the latest annual report of the board of directors,

(2) name, address and nationality of board of directors.

 

  1. Application for Retention License

Application for retention license shall be attached with the following particulars:

 

1/ the identification number of the applicant’s exploration license on which the application is based;

2/ the geographic coordinates of the proposed retention license, and an indicative map;

3/ the general technical information of the potential mineral reserve verified during exploration stage;

4/ justifications for adverse market conditions, unavailable processing technologies or other economic factors that prevent to develop the mineral deposit;

 

5/ feasibility study report;

 

6/ possible alternative measures to be undertaken during the retention period and their time table;

7/ subject to the provisions of Article 24 (1) of the Proclamation, the period for which the license is sought.

 

  1. 6. Application for a Small or large Scale Mining License

An application for a small scale or large scale mining license shall be attached with the following particulars:

 

1/  where the applicant is a natural person:

 

  1. a) particulars stated under paragraph (a) to (i) of Article 3(1) of this Regulation, except the particular stated under paragraph (f);
  2. b) information specified under paragraph   (f) and (g) of Article 4(1)  of this Regulation;
  3. c) the applicant’s exploration license number on which the application is based, if any;

 

  1. d) feasibility study document;
  2. e) environmental and social impact assessment reports of the mining operation;

 

  1. f) proposed development program and other information determined by the directives of the Licensing Authority.

 

2/ Where the applicant is a legal person:

 

  1. a) the information’s specified under paragraph (c) , (d), (e) and (f) of sub-article (1) of this Article;
  2. b) the information’s specified under paragraph (d), (g) and (h) of sub-article (1) and paragraph (a), (b) and (d) of sub-article (2) of Article 3 of this Regulation;

 

  1. c) the information’s specified under paragraph (b) of Article 4 (2) of this Regulation.

3/ The feasibility study document specified under paragraph (d) of sub-article (1) of this Article shall include the following:

  1. a) a plan of the proposed license area, at an appropriate scale, indicating the geographical coordinates of the turning points along its boundaries and the map which shows the distance between them;
  2. b) a map of the proposed license area at an appropriate scale, indicting the geographical coordinates within the license area and at least 500 meters along its official boundary survey, and showing major land marks, buildings, infrastructures, topographic and other physical features;
  3. c) details of the reserve including physical, mineralogical,geotechnical characteristics of the minerals;
  4. d) the proposed production method including detail study for acceptable and good trial production technology;

 

  1. e) proved, estimated and inferred reserves of the deposit, and the period for which the license is sought to mine the reserve in sustainable manner;

 

  1. f) comprehensive study of market conditions, the planned amount of annual production and sales revenues, capital and operating expenditures, depreciations and other deductibles and estimated profit and cash flow;

 

  1. g) the applicant’s organizational structure;

 

  1. h) details of essential infrastructures;

 

  1. i) program summery of employment and training.

 

  1. Application for Special Small Scale Mining License

Application for special small scale mining license shall be attached with the following particulars:

1/ where the applicant is natural person:

  1. a) information specified under paragraph (a), (b), (c) and (d) of Article  3 (1) of this Regulation;
  2. b) environmental and natural resource impact assessment document with respect to the area which the license is requested for;
  3. c) intended amount of expenditure for the environmental and natural resource impact restoration work during the license period;
  4. d) information with regard to the intended work program to be discharged during the license period and his financial position to execute the same;
  5. e) the original and a copy of his previous artisanal mining license.

 

2/ where the applicant is a legal person:

 

  1. a) its full name, nationality, legal form and address;
  2. b) information specified under paragraph (d) of sub-article (1) and paragraph (d) of sub-article (2) of Article 3 of this Regulation;
  3. c) information specified under paragraph (b), (c), (d) and (e) of sub-article 1 of this Article.

3/ other relevant documents determined by the directive of the Licensing Authority.

  1. Application for an Artisanal Mining License

 

Application for an artisanal mining license shall be attached with the following particulars:

 

1/ where the applicant is a natural person:

  1. a) his full name, nationality, sex, address and age;
  2. b) location of the minerals for which the license is requested;
  3. c) other relevant documents determined by the directive of the Licensing Authority;

 

2/ where the applicant is small and micro enterprise:

 

  1. a) his name, address and nationality;

 

  1. b) evidence that demonstrate as it registered as small and micro enterprise in accordance with relevant law and eligible to carry on trade pursuant to commercial law;
  2. c) information specified under paragraph (b) and (c) of sub-article (1) of this Article.

CHAPTER TWO ISSUANCE OF LICENSE

  1. Registration, of Applications

1/ Any application for a license filled and submitted in form prepared by the Licensing Authority for such purpose, shall be registered in the registry prepared for same in their order of reception before examining the fulfillment of the information specified under Article 3, 4, 5, 6, 7 and 8 of this Regulation.

 

 

2/ When application is submitted pursuant to sub-article (1) of this Article the Licensing Authority shall, after the laps of the period specified under Article 14(2)  of the Proclamation, cause payment of registration fee and provide the applicant with the approved mineral cadastre registry which specifies the date, time and number of registration.

3/ The registration of application conducted pursuant to sub-article (1) and (2) of this Article merely shall not make the applicant eligible for a license.

 

4/ The registry shall be open to the public in accordance with directive to be issued by the Licensing Authority for inspection.

5/ Any application registered shall be considered abandoned by the applicant and as a result the licensing process shall be terminated, if the applicant fails to follow up the licensing process or fails to provide the required information for more than two months.

 

  1. Lodging of Objections

1/ Any person may file a written objection against the grant of such license in accordance with Article 14(2) of the Proclamation.

 

 

2/ If the Licensing Authority rejects the objection and approves the application, it shall enter such decision in a registry of cadastre kept for same purpose pursuant to Article 9(2)  of this Regulation; and the applicant shall sign on the register.

  1. Grant, Registration and Notification of License

1/ The Licensing Authority after verifying the fulfillment of the following conditions shall grant the requested license:

  1. a) where the area for which application is lodged for license is not subject to another licensee and not prohibited by any other appropriate laws;

 

  1. b) where the geographical coordinates and descriptions of minerals of an area subject to an application published on news papers which have wider circulation by the expense of the applicant and no objection is filed within 7 days as specified under Article 14 (2) of the Proclamation;
  2. c) where the original certificate of business license and a Taxpayers Identification Number (TIN) is submitted;
  3. d) information submitted in connection with the application are verified to be correct and acceptable;

 

  1. e) where the applicant has demonstrated that he has the necessary technical capability and experience to carry out  undertakings  specified  under  the work program and financial resources  to execute the work program  and to meet any other obligations  emanated from the  license requested;
  2. f) the applicant, pursuant to Article 46 of this Regulation, submit all information that proves the payment of prescribed license fee;
  3. g) where the application is for mining license, the licensing authority primarily ascertain by physical appearance that the topographic conditions and coordinates of the license area are in accordance with the Proclamation.

2/ The registry of the granted license shall be opened to the public for inspection in accordance with directive to be issued by the Licensing Authority.

3/ Any person may, upon request and payment of the service fee specified under Article 47 of this Regulation, get the copy of the registered and numbered map of the area which specifies the area for which application is lodged or license is granted.

 

  1. Granting License through competitive bid

1/ License may be granted through competitive bid:

  1. a) without prejudice to Article 13 (4) of the Proclamation and Article 11(1) of this Regulation, when it is an exploration and mining licensee over the area in which the existence of deposit of precious minerals, metal and as the case may be a deposit of other minerals, is discovered;

 

 

  1. b) when the Licensing Authority decides that the mining area in which the minerals discovered shall be licensed through competitive bid;
  2. c) when the Licensing Authority decides to grant license through competitive bidding and more than one applicant lodge application within the determined period of time.

 

2/ A bid document shall be attached with the following:

  1. a) document showing the applicant’s technical and operational plan, money allocated for operation, financial situation, experience and competence;
  2. b) a guarantee from financial institutions which accounts for 25% of the proposed first year budget for performance of obligation.

 

3/ The selection of application lodged for bid shall be conducted in accordance with the criteria determined by directive and the Licensing Authority shall grant a license for the applicant who scores the highest result.

 

 

 

4/ The guarantee provided pursuant to sub-article (2) (b) of this Article shall immediately be returned for those who lost the bid; provided, however, that the winner’s guarantee shall be returned, when the Licensing Authority believes that the obligation of expenditure and work program to which he proposed for his first year mining operation has been fulfilled.

5/ Notwithstanding the provision of sub-article (4) of this Article, if the applicant fails to meet his proposed obligations the guarantee money shall be paid to government account.

6/ If only one bidder appears the bidding process shall be cancelled, unless the Licensing Authority decides for second-bid, and the process of granting license shall be conducted in accordance with Article 9 to 11 of this Regulation.

 

  1. Refusal to Grant License

1/ The Licensing Authority may refuse to grant a license by the following reasons:

  1. a) if the application or related information supplied in connection with the license are materially incomplete;

 

 

  1. b) if the work program submitted, the amount of expenditure allocated for the work program and guarantee of financial position or development and production program obligations are not acceptable;
  2. c) if the proposed license area is subject to an objection and the Licensing Authority uphold the objection;

 

  1. d) if the applicant, against whom an objection filed, failed to amend or complete deficiencies of his application;

 

  1. e) if the applicant, against whom an objection filed, failed to rebut the objection within seven days.

 

2/ If the Licensing Authority refuses to grant a license pursuant to this Article, it shall so notify in writing, within 15 days, by stating the reasons for its decision.

 

  1. Size of License Area

1/ The maximum area to be granted for an applicant may cover more than one block and as the case may be it might include different license areas; provided, however that the maximum area to be held by a single licensee shall be as determined in a directive.

 

2/ Without prejudice to the provisions of sub-article (1) of this Article, the maximum area to be covered by a single block shall be the following:

  1. a) 50 km2 for a reconnaissance license;
  2. b) 20 km2 for exploration license;
  3. c) 100,000 m2 for retention license;
  4. d) 5,000 m2 for artisanal mining license;

 

  1. e) 100,000 m2 for the small scale industrial and construction minerals mining license;

 

  1. f) 200,000 m2 for large scale industrial and construction mineral mining license;

 

  1. g) one square kilo meter for small scale and large scale mining license for precious, semi-precious, metallic and other minerals.

 

3/ An artisanal mining licensee shall not be granted with more than two licenses and an area exceeding 10,000 m2 at a time.

 

4/ Where the mining activity of the A special small scale mining licensee granted license in the previous artisanal mining license area, if demonstrates good production performance, additional area may be granted as determined in the directive.

5/ The maximum areas of small and large scale mining license might be determined by directive to be issued based on the type of the mineral; provided, however, it would not be more than a license area proved to have deposit of mineral reserve which could be mined in not more than 75 years.

  1. Replacement of Copies of License

1/ The licensee may apply in writing to the Licensing Authority for replacement of a license which has been lost, destroyed, dispossessed through theft, or made useless due to various reasons.

 

2/ The Licensing Authority shall, after investigating and verifying  the eligibility of such request, issue the replacement of copy of license to the licensee upon payment of the prescribed service fee, pursuant to Article  47(2)  of this Regulation.

 

CHAPTER THREE RENEWAL, TRANSFER, suspension AND   REVOCATION OF LICENSE

 

  1. Renewal of an Exploration License

1/ Application for the renewal of an exploration license shall be submitted made 60 (sixty) days before the end of its terms specified in the license and shall be attached with the following documents:

  1. a) annual summery report which contains information submitted for original license or changes, if any, in the application or during renewal and acquired outputs and other relevant information determined in directive;

 

  1. b) report including the impact of mining operation resulted to the environment and natural resource in the previous license period and restoration measures taken;

 

  1. c) the licensee’s detail work program, environmental and social impact assessments, development plan and expenditure proposal during each year of the next renewal period;

 

  1. d) portion of license area be relinquished and geographical coordinate of the license area for which renewal is sought pursuant to Article 22 (1) of the Proclamation;
  2. e) other information determined by the directive of the Licensing Authority.

2/ Where the licensee failed to lodged an application for renewal timely pursuant to the provisions of sub-article (1) of this Article, the Licensing Authority submit a written notice to the licensee within 15 days.

 

3/ Where the licensee fails to submit his renewal application within 15 days after receiving notice pursuant to sub-article (2) of this Article, the license shall be presumed as terminated from the date of its expiry.

 

4/ The land to be relinquished pursuant to sub-article (1) (d) of this Article shall, unless the Licensing Authority agrees otherwise,  be block by block, which is coordinated  in a simple geometric form comprised of not less than one square kilometer units.

 

5/ Without prejudice to the provisions of Article 22 (3)  and  (4)   of the Proclamation, the Licensing Authority after verifying the existence of  following force majeure, may allow a renewal of an exploration license without relinquishment of a portion of the license area:

  1. a) prolonged delay of the result of sample test and major break downs of machineries which are decisive for the operation and the occurrence of other similar situations which are beyond the control of the licensee;
  2. b) inability to conduct the operation as per the work program due to disputes with other licensees or any other third party;
  3. c) where the occurrence of events considered as forced majeure under the Civil Code hampers the operation in significant and sustainable manner.

 

6/ The licensee shall take all reasonable measures to mitigate the impact of the occurrence of force majeure and provide an evidence to prove the occurrence of events specified under paragraph (a), (b) and (c) of sub-article (5) of this Article and notify in writing to the Licensing Authority.

7/ The Licensing Authority shall, upon payment of the prescribed renewal fees and land lease rental, renew the exploration license in not more than 30 (thirty) days in accordance with Article 19 (2) and (3) of the Proclamation after verifying that the documents attached with the application are acceptable.

 

  1. Renewal of Retention License

1/ Application for the renewal of retention license shall be made within 90 days prior to the end of the term of the license and shall be attached with the following documents:

  1. a) the general report which contains any change and condition still prevails in the information submitted during application for the original license pursuant to Article 5 (4), (5) and (6)  of this Regulation and other relevant information determined by  directive;
  2. b) detail of the proposed work program to develop and mine the minerals during the renewal period;
  3. c) information specified under Article 23(1) of the Proclamation and such other information to be determined by the directives.

2/ The Licensing Authority shall, upon payment of the prescribed fees and land lease rentals, renew the retention license in not more than 30 (thirty) days in accordance with Article 24 (2) of the Proclamation, after verifying that the documents attached with the application are acceptable.

 

  1. Renewal of Special Small, Small or Large Scale Mining Licenses

 

 

1/ An application for the renewal of special small, small or  large scale mining license shall be made 180 days prior to the expiry of the  term of the license; and shall attach the following documents:

 

 

  1. a) any change in the information submitted during application for the original license or during renewal of same;

 

  1. b) except the special small scale mining license; detail report indicating the remaining proved, estimated and inferred reserves of the deposit and subsequent plan of operation;
  2. c) the proposed production program, expenditure and cash flow for the next renewal period;

 

  1. d) the current financial audit report of the licensee confirmed by external auditor;
  2. e) social and environmental impact assessment report for the renewal period;
  3. f) report which shows restoration measure taken to mitigate the impact of the mining activity on environment and natural resource during the previous license period.
  4. g) such other information considered to be relevant and minerals that the amount of reserve deposit is not required shall be determined by the directives.

 

 

2/ The Licensing Authority upon examining information submitted with application and accepts them, it shall renew the license in accordance with Article 27, 29 and 33 of the Proclamation:

  1. a) upon verifying that the licensee has discharged his contractual and legal obligation of the previous mining license, and
  2. b) upon the payment of the prescribed renewal and land lease fees by the applicant and

 

  1. Transfer of License

1/ Without prejudice to Article 40 of the Proclamation, the licensee or his heirs, by providing all necessary documents and upon payment of application fee, may request in writing the Licensing Authority to transfer his license.

 

 

2/ Application for sale or assignment of an exploration, a small scale or large scale mining license, shall be attached with the following:

  1. a) the information specified under paragraph ( a), (b), (c) and (d)  of Article 3(1) of   this Regulation, if the application to sale or assign the license to a natural person;

 

  1. b) the information specified under paragraph (a), (b), (c) and (d) of Article 3 (2) of this Regulation, if the application to sale or assign the license to a legal person;

 

 

  1. c) contractual agreement of the proposed sale or assignment;
  2. d) evidence of payment of income tax from the net profit which is going to be computed from the transferor’s share in accordance with income tax law, if the application to sale or assign small or large scale mining license.

 

3/ Application for the encumbrance of a small scale or large scale mining license in accordance with Article 40 of the Proclamation shall be attached with the following:

  1. a) where the proposed beneficiary of such encumbrance is natural person, information required under paragraph (a) and (b) of Article 3(1) or in case the beneficiary is legal person information required under paragraph (a), (b), and (d) of Article 3(2) of this Regulation;

 

  1. b) the nature, terms and conditions of security interest proposed to be granted including such safeguards specified in the directives issued by the Licensing Authority may require.

4/ Application to transfer a special small scale, small scale and large scale mining license by inheritance in accordance with Article 40 of the Proclamation shall be attached with the following:

  1. a) certificate of heir;
  2. b) information required under paragraph (a), (b), (d) of sub-article (1) and  paragraph (a), (b) , (d) of sub-article (2) of Article 3 of this Regulation for natural and legal person, respectively.

 

5/ Application to transfer artisanal mining license by inheritance in accordance with Article 40 of the Proclamation shall be attached with the following:

  1. a) certificate of heir and information specified under Article 8 of this Regulation;

 

  1. b) evidence showing that the transferee heir committed himself to meet all terms and conditions of the license.

 

6/ The transfer of license shall be permitted only after the Licensing Authority verifies that the following documents shall be attached with the application:

 

  1. a) if it is confirmed that the licensee has fulfilled all its obligations in accordance with the Proclamation, regulation, directives and on terms of his license agreement;
  2. b) if the total area to be possessed by the transferee is not more than the maximum size of the area specified by directive;

 

  1. c) in case of inheritance, if the transferee previously hold a license and the total license area exceed the maximum size of the area permitted for a single person only if he prefers the inheritance;

 

 

  1. d) if the transferee agrees to comply with mining laws, terms and conditions of the license, and the work program of the licensee.

 

7/ Except by way of inheritance, any exploration license may be transferred, if the following particulars are fulfilled;

 

 

  1. a) if the licensee has been discharged the first year exploration and fulfilled his obligation regarding to the minimum work program and expenditure specified in his license agreement;
  2. b) if the licensee has been operating for more than one year, he shall be expected to fulfill his minimum obligation in relation to work program and expenditure responsibilities until the time of transfer,

 

20.Suspension and Revocation of the licenses

1/    Without prejudice to Article 46 (3) and (4) of the Proclamation, the Licensing Authority may suspend or revoke license where the licensee commit contravention stated under Article  50 of this Regulation or Article 46 (2)  of the Proclamation.

2/    Without prejudice to sub-article (1) of this Article an artisanal mining license may be revoked pursuant to Article 34(5) of the Proclamation.

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