Special permit for subsoil use
- GeoGroup
- Special permit for subsoil use
If an investor wants to start a business in the field of mining in Ukraine, he or she needs to go through a long way of procedures and obtain the main document – a special permit for the use of subsoil (hereinafter referred to as the SP).
Obtaining a special permit for subsoil use in Ukraine is regulated by the Subsoil Code and, in terms of hydrocarbons, by the Law of Ukraine “On Oil and Gas”.
Subsoil of Ukraine is provided for a certain period or for permanent use.
However, it is worth noting that the term of subsoil use actually starts from the date of obtaining a special permit for subsoil use, unless it provides for other conditions. With regard to the conclusion of a production sharing agreement (PSA), the term of operation begins on the date specified in the agreement.
Special permits for subsoil use are granted by the State Service of Geology and Subsoil of Ukraine (hereinafter also referred to as the State Service of Geology and Subsoil) on the basis of relevant orders. They are issued to the winners of electronic auctions for the sale of special permits s or to the applicant in exceptional cases, as defined by the Subsoil Code, in a non-auction method. Auctions for the sale of special permits are held in the form of electronic auctions, which are put out by the State Service of Geology and Subsoil of Ukraine on the basis of applications from interested investors and are conducted through the system «Prozorro.Sale». Information on the list of special permits for subsoil use is available at State Geological Portal , access to which is provided with the use of digital signature.
Both individual entrepreneurs and legal entities have the right to become the holder of a special permit for subsoil use in Ukraine. However, it should be borne in mind that there is a clear list of persons who are not entitled to be users of Ukrainian subsoil, namely: legal entities, individuals related to the aggressor state, persons registered in the aggressor state. They also cannot be the ultimate beneficial owners of companies that plan to become or are subsoil users.
Types of subsoil use in Ukraine
With regard to the right to subsoil use and its types, the Subsoil Code requires a separate permit for each type of subsoil use within a particular site.
Subsoil use permits in Ukraine are granted for the following types of subsoil use:
- Geological exploration, including pilot development, of minerals with subsequent extraction of minerals (industrial development of deposits);
- Extraction of minerals;
- Construction and operation of underground facilities not related to the extraction of minerals, including facilities for underground storage of oil, gas and other substances and materials, disposal of harmful substances and production waste, wastewater disposal, production of geothermal energy (thermal energy of the subsoil), operation of underground facilities related to the prevention of environmental flooding as a result of mine closure;
- Creation of geological territories and objects of important scientific, cultural, sanitary and health significance (scientific testing grounds, geological reserves, nature reserves, natural monuments, medical and health facilities) (except for oil and gas subsoil);
- Performing works (carrying out activities) stipulated by the production sharing agreement.
Obtaining a special permit for subsoil use
The procedure for granting special permits for subsoil use (licenses) is regulated by the Subsoil Code and Law of Ukraine “"On oil and gas"” and requires strict adherence to its norms.
The term for granting a special permit for subsoil use is determined by the applicant in his application and may be as long as
from 3 to 20 years (this applies to such types of subsoil use as geological exploration or pilot development)
from 3 to 50 years is granted for the creation of geological territories and objects.
It should be noted that the terms of use of oil and gas subsoil are regulated and determined separately by Law of Ukraine “"On oil and gas"”.
The procedure for granting special permits for subsoil use: what you need to know
The procedure for granting special permits for subsoil use (licenses) is regulated by The Subsoil Code and Law of Ukraine “"On oil and gas"rdquo; and requires strict adherence to its norms.
A special permit for subsoil use based on the results of an auction. A special permit can be obtained based on the results of electronic auctions, which is provided for by the Subsoil Code of Ukraine. In order to understand how much it will cost, for example, to obtain a special permit for geological exploration of subsoil, it is necessary to make a calculation in accordance with the current Methodology for determining the initial sale price at an auction of a special permit for subsoil use, approved by the Resolution of the Cabinet of Ministers of Ukraine №1374 dated 15.10.2004.
A special permit for subsoil use without an auction. This method of obtaining SP is available to subsoil users after geological exploration and pilot development, having protected the reserves in the State Committee of Ukraine on Geology and Subsoil. An important innovation that the subsoil use industry received with the subsoil use reform was the "small subsoil use". Thus, owners of land plots that own no more than 25 hectares of land can apply for a SP for geological exploration, including pilot industrial development with subsequent extraction for minerals of local importance (sand, gypsum, sapropel, chalk, loam, and soda ash).
The possibility of obtaining a subsoil use permit:
Purchase of a special permit for subsoil use from another subsoil user. This procedure can be carried out by entering into a contract for the sale and purchase of subsoil use rights, or by contributing the rights to the authorized capital or joint venture.
Purchase of corporate rights of a company that holds a special permit for subsoil use.
How to obtain a special permit for subsoil use
The documents for obtaining the SP are submitted exclusively through the electronic cabinet (using an electronic digital signature).
In addition, the form of the Special Permit for Subsoil Use can also be obtained electronically.
The procedure for granting special permits for subsoil use (licenses) is regulated by the Subsoil Code of Ukraine and Law of Ukraine “"On oil and gas"” and requires strict adherence to its norms.
Where can I get a permit for the use of subsoil for mining?
In order to obtain the right to use subsoil for mining, it is necessary to submit an application for a subsoil use permit and supporting documents to the State Service of Geology and Subsoil of Ukraine.
Subsoil of Ukraine is granted for a certain period or for permanent use. However, it is worth noting that the term of subsoil use actually starts from the date of obtaining a special permit for subsoil use, unless otherwise provided in the permit. With regard to the conclusion of a production sharing agreement (PSA), the term of operation starts from the date specified in the agreement.
How can we help you?
The team of Geological Investment Group LLC is engaged in the preparation and support of documents, required to obtain a special permit for geological exploration, including pilot commercial development of subsoil, as well as documents that allow for the commencement of mineral extraction after the completion of geological exploration and geological and economic assessment of mineral reserves.
We analyze the client's request and develop an optimal strategy for obtaining permits, and support each stage of obtaining a special permit for subsoil use. We provide comprehensive advice on the procedure for holding an auction for the sale of special permits for subsoil use.
We prepare a package of documents in accordance with the list required by the procedure for obtaining special permits for subsoil use, nominate a subsoil plot for auction and coordinate your actions at the stage of registration on the electronic platform for the sale of a special permit for the use of the selected subsoil plot.
We develop and implement a strategy for participating in the auction and support the client in the auction and subsequent obtaining of a subsoil use permit.
We analyze the client's request and determine the non-auction grounds for obtaining a special permit: it can be obtained out of competition if it is a subsoil area or mineral deposit of local importance, or by acquiring the assets of a company that holds such a special permit.
As part of the cooperation, our team develops a non-auction strategy for obtaining a special subsoil use permit, finds companies that hold a special permit that meets the client's goals, and determines the prospects and risks of acquiring this permit.
We prepare the entire package of documents and implement the developed strategy for obtaining a special permit for subsoil use within the shortest possible time.
