Mining permit rules changed

TIRANA, July 4 – New changes to the mining law foresees permits for this sector– which produces one of Albania’s key exports– will be issued under offers made by the Economy and Energy Ministry and not companies themselves.
Sokol Mati, the policy director at the Ministry told reporters that under the new legal package which enters into force this month, mining permits will be offered by the state under competitive procedures through the mid-term programme approved by the Council of Ministers and the 437 mining zones planned for this period.
Data show some 770 mining permits are currently in force of which 150 are for exploration purposes.
The new 2011-2014 strategy on the mining sector foresees a 5 percent increase in production. Since 1994, when a new mining law was approved soon after the communist system collapsed, Albanian mines have been explored by private companies under mining permits and concessions.
Under the new law, the local government units will benefit 20 percent of the mining rent. Another element the draft law brings is the financial guarantee for companies which want to get a mining permit.
The company seeking to obtain a permit must deposit 10 percent of the investment value foreseen in the exploration permit in a bank to avoid the possibility of granting permits to companies which cannot explore them, said the ministry.
In case the company manages to fulfill this investment plan within the first year, the sum is immediately returned.
According to a World Bank report on the Albanian mining sector, over the past 4 years, attention has been paid to attract investment by foreign companies, particularly for prospection, thus offsetting some momentary shortcoming by the Albanian Geologic Service which is currently revealing a limited budget. At present, Canadian, Turkish and Chinese companies hold licenses to search for chromium, copper and iron-nickel minerals. Albania has for the first time seen the successful use of modern airborne geo-physical exploration methods by a Canadian company.
The mineral industry of Albania served for more than fifty years as a foundation of industrial growth and economic linkages, building on an underlying resource endowment of chrome for which it was, until the 1980s, one of the world’s biggest producers, together with nickel, iron and copper mineralization.
Mineral production and exports peaked in 1989 at US$140 million when chrome, copper and nickel accounted for about 80 percent of total Albanian exports (by value). By 1992 mining exports had fallen significantly to around $20 million, a result of political instabilities, economic decline within the country and the onset of a commodity recession that would persist throughout the remainder of the decade.