OMAN MINING REGULATION
Oman, officially known as the Sultanate of Oman, is an Arab country in the southeastern coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. It also shares marine borders with Iran and Pakistan. The coast is formed by the Arabian Sea on the southeast and the Gulf of Oman on the northeast. Oman is a peaceful, high-income and relatively progressive, absolute monarchy. Oman has substantial mineral resources, though modest in comparison with Saudi Arabia. They include chromite, copper, dolomite, manganese, coal, zinc, limestone, marble, gypsum, silicon, gold, cobalt and iron. Among the metallic resources there exist chromite, manganese, copper and iron ore mines.
PRINCIPAL LEGISLATION AND REGULATOR
The Omani mineral sector is primarily regulated by the Mining Law (Royal Decree No. 27 of 2003 (as amended)), together with its associated Executive Regulations (No. 77/2010) (ER 77). Article 2 indicates that the state owns all minerals in their natural state within Oman. The Ministry of Trade and Industry administers the law and, in particular, the Directorate General of Minerals (DGM) is responsible for overseeing mining operations and handling all permit and licence applications. In 2013, the government issued Ministerial Decision No. 39 of 2013, which gave priority of grants to national companies, and adopted measures to restrict foreign investment in the mining sector to 30% interests in mineral licence holding companies. As in Saudi Arabia, therefore, corporate joint ventures ought to be considered as a method to enter the mining sector.
GRANT AND FORMS OF MINERAL TITLE
Oman provides four basic forms of mineral title (which roughly equate to a reconnaissance licence, exploration licence, mining right and mining concession). They can be more particularly described as follows:
- Exploration Licence (Reconnaissance): an applicant for an exploration licence must provide a proposal for work, a budget and an undertaking to spend the budgeted sums; the Directorate must study the application and make a decision within 30 days. There is full discretion to grant or deny the application (Arts. 17 to 19). An exploration licence may not be granted over an area that is the subject of an existing concession area or mining licence (Arts. 13 and 24). The duration is one year and it is renewable for similar periods.
- Prospecting Licence: virtually all of the terms and conditions pertaining to the exploration licence also apply to a prospecting licence, including duration.
- Mining Licence: The decision to award a mining licence is, ultimately, discretionary. The key criteria for a mining licence are: (1) a geological study (Art. 29.4); (2) technical competence (Art. 29.6); (3) a work program and budget (Arts. 29.5 and 29.7); and (4) satisfaction of such conditions as may be specified by the Ministry of Environment (i.e., an EIA or whatever else may be required).
- Mining Concession: For a mining concession, the key criteria are the same as a mining licence Art. 48), except that the Directorate is required to consider if the deposit is sufficient to merit long-term commercial exploitation; the operation to be conducted must be in keeping with the "most ideal" norms of mining standards. (Art. 49). In addition, where applicable, an agreement with the surface rights owner may be necessary (Art. 69). The duration of a mining concession will be 25 years.
Transfers are only permitted on consent of the Minister (Art. 19). A mining licence and concession holder must appoint and train Omanis according to the conditions specified in the licence and inform the Director in advance of any intentions to perform or cease any relevant activity of the licenced operations.
The Executive Regulations indicate that the applicant for a mining concession must produce a program for rehabilitating the land, including designs illustrating the site after rehabilitation and the location of all dumps, to ensure no impact on water resources (Art. 52.16). Pursuant to Articles 9 and 16 of the Law on Conservation of the Environment and Prevention of Pollution, an environment permit is required for any work that may cause damage to the environment and an environmental impact assessment study (EIA) must form part of the application. Given that Article 21 of the environmental law requires a permit for cutting down any tree, removing any stone or damaging any grasslands, it is quite certain that virtually any activity in the exploration, development and production phase of a mining project will necessitate a permit. This is reaffirmed in the MECA Guidelines for Obtaining Environmental Permits, which indicates that an EIA is required for Large Projects including quarries, mines and smelters, as well as projects requiring water treatment. The permit is only issued for a two-year period initially, though other periods may be granted on renewal.
See Oman Environmental Regulation.