Kazakhstan plans to simplify subsoil use regulation

Mariyam Zhumadil, CFAJune 14, 2013

Yesterday, speaking at Astana Mining and Metallurgy International Forum a representative of the Ministry of Industry and New Technologies (MINT) said subsoil use regulations will be  improved before year end.

This is not the only effort to spur investment into the mining sector. Earlier this year the government lifted a moratorium on granting new subsoil use contracts, which it introduced in 2007. During the moratorium period investors could obtain subsoil use rights by purchasing an entity that is a subsoil user or through direct negotiations with the national companies.  

The following amendments to the existing regulations are being considered by the MINT now:

    1. Two more ways to receive subsoil use rights will be  added - by auction and on a first come, first serve basis. The requirement for endorsement of project documentation may be waived.
    2. The time required to receive the subsoil use rights will be reduced by up to 60%, the application package for subsoil use rights will also be optimized.
    3. The option to divide large contract territories into smaller ones will be added.

Also Association of metals and mining companies of Kazakhstan at the forum suggested the introduction of 'one window' concept, which would allow investors to avoid the red tape and would make the subsoil use grant process more transparent. Another concern cited by industry players was that the current mining code fails to cover all areas of the subsoil use procedures, and leaves room for interpretation by  government officials, which does not help increase investment into mining sector of the country.

We believe, the public acceptance by the Government officials of the ineffectiveness of the current subsoil use legislation is a positive sign for the sector. The successful implementation of the proposed changes will largely depend on the presence of political will and commitment. The proposed amendments into the subsoil use procedures will be submitted for consideration by Parliament in the Fall.