Unprofitable recalculation of coordinates. How to avoid losing stocks while complying with the new requirements of the Resolution №615 of the Cabinet of Ministers of Ukraine?

Following the latest amendments to Resolution №615 of the Cabinet of Ministers of Ukraine in July this year, all subsoil users are required to submit the coordinates of the corner points of the field area exclusively in the WGS 84 geographic system with an accuracy of at least one tenth of a second to obtain new special permits for exploration and production.

Prior to the innovation, special permits were issued with the coordinates of the corner points of the site/field in the Pulkovo-1942 (CS-42) geographic coordinate system with an error of less than 1 second. The calculation plans to the detailed exploration reports (and other graphic annexes) are made in rectangular coordinate systems (Conventional coordinate system; UCS-2000; CS-63).  When obtaining a special mining permit, the geographic coordinates are taken graphically from the survey plan. In the next step, the corner points were rounded to 1 second. Thus, the error between the corner point on the survey plan and the special permit could be up to 20-30 meters. In the new amendments to Resolution №615, this error cannot exceed 2-3 meters.

For iterative conversion of coordinates from the CS-42 coordinate system to WGS-84, the State Service of Geology and Mineral Resources of Ukraine recommends using the calculator available at https://nadra.gov.ua/area/appcalculation. When recalculating, it gives an error of 7-15 m, which depends on the location of the field.

After the innovations, subsoil users have faced/may face the following problems:

• graphic materials submitted together with the Application for a special permit were prepared according to the old rules, and now they must be submitted according to the new ones, which results in an error of 15-45 m between the corner point of the reserve estimation boundary from the estimation plan and the corner point of the special permit coordinates. 
• For already granted special mining permits, a “mishap” may occur during the inspection or amendment process, since under the old rules the error was up to 20-30 m, and now it should not exceed 2-3 m.

How critical is the error in coordinate recalculation and does it really have such consequences for business and the industry as a whole?

To understand how critical the recalculation of coordinates between systems is, let’s take the example of the “Conventional coordinate system” sand area (Figure №1). 

A subsoil user has conducted geological exploration on his land plot. The sand reserves within the contour of its land allotment were calculated and approved in the amount of 3798 thousand m3 (Figure №1, purple contour). Until 29.07.2022, in order to obtain a special mining permit, the corner points: the boundaries of the calculated reserves, were submitted with rounding to the nearest 1 second. In the process of rounding to 1 second, the corner points in this example were shifted by 10-23 m (Figure №1, red outline). Such a shift will result in 0.849 hectares of loss of area with approved mineral reserves and 169 thousand m3 of raw materials.

Since it is now necessary to submit coordinates in the WGS-84 geographic system in the Application for obtaining and/or amending a mining permit with annexes, it is mandatory to make an iterative recalculation using the calculator available at https://nadra.gov.ua/area/appcalculation. In this case, the recalculation results in a 10-meter offset between the corner points (Figure №1, orange outline). This error results in 0.513 hectares of area loss and 102 thousand m3 of reserves.

As a result, the subsoil user loses 1.36 ha of land and 272.6 thousand m3 of sand. If previously the customer would not have had any problems with its special permit for the Conditional field, now, under the new rules, problems will arise:

• loss of reserves outside the special permit;
• revocation of the special permit;

Today, a subsoil user can act as follows: 

• take a risk and develop the field according to the estimated plan and in accordance with the development project, going 20-30 meters beyond the limits of the special permit;
• try to make changes to the special permit, in accordance with clause 17, sub-clause 4 of the CMU No. 615 (detection by the subsoil user of errors, obvious mistakes after obtaining the permit), which are likely to be rejected;
• apply for a special permit for a one-time extension of the boundaries by up to 50 percent and its geological exploration, in which case the subsoil user will have to re-examine the already explored area and invest additional funds;
• lose 272 thousand m3 of sand reserves and develop the field only on the remaining area.

*Figure №1. Overview map of the site, image by Geological Investment Group LLC.

Possible solutions: What should subsoil users do today to avoid losing their special permits and developed territories?

It is quite easy to solve this problem if subsoil users are given the opportunity to amend the special permit in the following cases: adjustment of geographical coordinates in accordance with the limit of calculation of mineral reserves from the calculation plan for a certain period (2-3 years) from the date of entry into force of the version of the Resolution №615 of 29.07.2022. 

Note. If a special permit is obtained for several minerals, the coordinates of the corner points include the estimated limits of all minerals.

Can subsoil users abuse the process of coordinate adjustment?

Yes, subsoil users may try to abuse this amendment. We propose to establish additional rules:

1. the corrected coordinates of corner points in the WGS-84 coordinate system should not differ from the previously provided coordinates by more than 2 seconds.
2. If the difference in coordinates is more than 2 seconds, the subsoil user is obliged to order a service from the  SRDE “Geoinform of Ukraine” to “determine the coordinates of the corner points of the current plan for calculating reserves in the WGS-84 system”. These coordinates must be agreed upon by the SRDE “Geoinform of Ukraine” and the subsoil user.

Our suggestions:

After acquiring a special permit for subsoil use, in order to start mining, a subsoil user needs to obtain a land allotment. The land allotment is formalized in the following ways: registration of ownership of the land plot (purchase) or conclusion of a lease agreement (easement). However, the landowner may overestimate the price of the land or refuse to sell or lease it.

Therefore, it is advisable to thoroughly investigate the land issue before choosing an investment object. Even now, subsoil users are already resolving the land issue before nominating a field/plot for an auction. This practice will become more common in the future.

It is worth noting that the coordinates of the corner points of land plots are determined in the rectangular coordinate system UCS-2000 and the calculation plans and detailed exploration are also made in rectangular coordinate systems.  Special permits, in turn, are issued in the WGS-84 geographic coordinate system.

 In order to avoid errors of 7-15 m in future recalculations between the two different systems, it is proposed to duplicate the WGS-84 geographic coordinate catalog with the UCS-2000 rectangular coordinate system corner points catalog. Corner points of two different systems can be taken graphically with an accuracy of 0.5 m in specialized programs (ArcGis, QGIS, MapInfo, AutoCAD)