Act XLVIII of 1993
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Act XLVIII of 1993 on Mining The purpose of this Act is to regulate the mining of mineral raw materials, prospecting for and exploitation of geothermal energy, the establishment and operation of pipelines conveying hydrocarbon, and the activities related thereto, in harmony with the protection of life, health, security, the environment and property, and the management of mineral and geothermal Energy resources. PART I GENERAL PROVISIONS Effect of the Act Section 1 (1) The effect of this Act shall extend to: a) mining of mineral raw materials; b) stoppage of exploitation, and recultivation following exploitation; c) establishment, utilization and termination of waste heaps; d) maintenance, utilization and abandonment of spaces of closed down undergound mines remaining open; e) establishment, putting into use and termination by mining methods of certain underground spaces serving purposes other than mining; f) establishment and operation of pipelines conveying hydrocarbon; g) construction of geological structures suitable for the storage of hydrocarbons, and utilization thereof for the purpose of storage; h) prospecting for geothermal energy, and exploitation thereof for the purpose of generating energy, as well as the facilities necessary for the above activities. (2) Prospecting for and exploitation of mineral raw materials to be found in outcrops and deposits shall qualify as the activity defined in paragraph a), subsection (1). (3) The provisions of this Act regarding mine damage (Section 37), use of real estate (Section 38), the technical safety and licensing competence of the mine supervision prescribed in respect of deep hole drilling and industrial explosion activities (Section 44) shall apply to geological research of geological formations and structures as well. (4) Unless this Act otherwise provides, the legal rules concerning the protection of the environment and water shall apply to waters. (5) The effect of this Act does not extend to the exploitation of materials carried out for the purpose of construction, terrain correction and the construction of waterbeds, or to gold-washing performed manually. (6) Mine rails, mining cableways and stringways, as well as collecting lines within and between fields shall qualify as objects necessary for the activities listed above, and falling under the effect of this Act. Exercise of Activities Section 2 The activities falling under the effect of this Act may be performed in a way that provides for the enforcement of the requirements concerning the protection of human life, health, the environment and property, as well as the management of mineral and geothermal energy recources. Right of the State Section 3 (1) As-occurred mineral raw materials and geothermal energy are the property of the state. Mineral raw materials exploited, and geothermal energy utilized by mining entrepreneurs shall, through exploitation, be transferred to the property of mining entrepreneurs. (2) The conveyance in pipelines of hydrocarbons, as well as the underground storage thereof are activities to be exercised exclusively by the state (Section 16). (3) With the exception of the cases regulated in subsection (4), the Minister of Industry and Trade (hereinafter: Minister) may, for a definite period of time, relinquish the exercise of the activities listed in Section 8 by concession contracts. (4) Based on the surface pre-prospecting report defined in Section 4 of this Act, the mining activities regulated in Sections 5 and 6 may be performed on the basis of the licence of the authorities (liberalized activities), while in the cases defined in subsection (6), Section 50, such activities may be performed on the basis of this Act. Surface Pre-Prospecting that May Be Performed on the Basis of a Report Section 4 (1) Pre-prospecting on open areas, not resulting in the opening of the surface of the ground, may be performed on the basis of an agreement concluded with the owner (manager, user) of the real estate, and of a preliminary report communicating the date of the commencement of prospecting to the mine supervision. (2) The agreement concluded with the owner (manager, user) of the real estate shall not exempt the person performing pre-prospecting from obtaining the other licences of the authorities prescribed as compulsory in a separate legal rule. (3) Any damage caused by surface pre-prospecting shall be compensated for according to the provisions of the Civil Code. Prospecting and Exploitation that May Be Performed on the Basis of the Licence of the Authorities (Liberalized Activities) Section 5 The mine supervision shall license in open areas the following: a) prospecting for mineral raw materials; b) exploration and exploitation of mineral rersources, following the laying of mining plots; c) utilization of waste stockpiles. Section 6 The prospecting licence shall grant the mining entrepreneur exclusive right, in the area of prospecting, of prospecting for the specific mineral raw material, as well as of initiating the establishment of the status of mine plot within the deadline defined in the licence. Section 7 The mining entrepeneur shall perform his activity by satisfying the requirements prescribed in Section 2,and according to the general rules defined in Part III. PART II CONCESSION Section 8 By a concession contract concluded with domestic or foreign legal entities and natural persons, and the unincorporated associations thereof, the Minister may, for a definite period of time, relinquish the following: a) prospecting for, exploration and exploitation of mineral raw materials (raw materials); b) construction and operation of pipelines conveying hydrocarbon; c) formation and use of geological structures suitable for the storage of hydrocarbons, and d) prospecting for geothermal energy, and exploitation thereof for the purpose of generating energy. Designation of Concession Areas Section 9 (1) Based on the available geological details available, and the applications of entrepreneurs, the Minister shall take stock of the closed areas that may be designated for concession. (2) In the invitation to tender, the Minister shall advertise the closed areas where, based on the analysis of the economic, environmental, natural and social effects and with regard to the existing natural resources, the mining of mineral raw materials appears to be promising. Concession Tender Section 10 (1) The Minister shall invite a public tender for conclusion of the concession contract, with the exception of the cases defined in subsection (7), Section 22, and subsection (6), Section 50. (2) In addition to the contents defined in Act XVI of 1991 on Concession, the invitation to tender shall contain: a) definition of the confines of area, in respect of which the tender has been invited, indicating whether third parties have already obtained the right of mining mineral raw materials, or exercising any other activity falling under the effect of this Act, in the area, or in a part thereof; b) definition of the mineral raw materials, for the mining of which the consession has been tendered and/or of any other activity falling under the effect of this Act (e.g. underground storage), for the performance of which the concession has been tendered; c) professional, environmental, land, water, public sanitation, health care, nature and landscape protection requirements of the activity under concession, and the obligations concerning the provisions of guarantee for meeting the requirements; d) main requirements concerning the contents of the work programme to be submitted; e) conditions of participation in the invitation to tender (e.g. entrance fee, information on the economic and financial situation of bidder); f) in the case of the awarding of the concession, the payment obligations to be met on the basis of this Act: - rate of mining royalty payable to the state for the mineral raw material exploited, - amount of the fee payable in the case of any other activities under concession (conveyance by pipelines, underground storage, exploitation of geothermal energy); g) conditions of landscape recultivation in the area affected by the activity under concession, and the definition of any guarantees serving the purpose of meeting the obligations relating thereto (e.g. depositing of collateral, taking out a liability insurance policy); h) main aspects of assessment of bids (e.g. contents of work programme, bidder volunteering to pay a rate of mining royalty higher than that defined in the invitation to tender, to employ local work force, to use services of domestic entrepreneurs); i) information on the obligation of setting up a concession company; j) all other terms and stipulations that should be settled on conclusion of the concession contract, or in the contract (e.g. repayment of costs related to expropriations undertaken by the state, stipulation of the right of pre-emption of the state in respect of the mineral raw materials). Assessment of Bids Section 11 (1) Those bids shall be assessed which meet the conditions of the invitation to tender. (2) Based on the assessment of the bids, the Minister shall decide on granting the concession. The result of the invitation to tender shall be published, and all bidders shall be notified thereof. The Concession Contract Section 12 (1) The Minister shall conclude a concession contract with the awarded bidder. Concession contracts may be concluded for a maximum period of 35 years, which may be extended on one occasion, at the most, by half the period of the concession contract. (2) The concession contract shall provide for the contents of the work programme and the guarantees of performance thereof. The Minister may, in the contract, stipulate the repayment of the costs necessary for the completion of the work programme, for the eventuality if the beneficiary of the concession fails to meet its obligation assumed in the work programme approved. (3) If the Minister invites a new tender, the concession shall be granted to the former beneficiary in case it agrees to meet the terms of the most favourable bid. (4) Unless the concession contract otherwise provides, the aerial objects built on the basis of the concession contract shall be transferred to the possession of the mining entrepreneur as of the date of the putting into operation thereof. If, on termination of the concession contract, the objects cannot be further operated, the mining entrepreneur shall demolish the objects, and rehabilitate the area. The Concession Company Section 13 (1) With the exception of the case defined in subsection (2), the party signing the concession contract shall, within 90 days of signature, found an economic association with domestic headquarters, for the performance of the mining activity, with his own participation. (2) No economic association needs to be founded if the party signing the concession contract is a domestic economic association established for the performance of mining activity [paragraph c), Section 685 of the Civil Code]. MINING CONCESSIONS Prospecting, Exploration and Exploitation Section 14 (1) The planned period of prospecting within the period of the concession may not be longer than 4 years, and may, on one occasion, be extended by half thereof, at the most. (2) The mining entrepreneur may, within 1 year of completion of prospecting, apply for the area to be qualified as a mine plot. If the mining entrepreneur fails to submit to the mine supervision the application meeting the requirements defined in Section 26, by the deadline prescribed, the concession is terminated. Section 15 If the beneficiary of the concession fails to commence exploitation within the deadline defined in the contract, but within 5 years of qualification of the area as a mine plot, at the latest, it shall pay the compensation defined in the contract for the recovering the mining royalty lost. If it fails to meet the obligation of paying the above compensation, the concession is terminated. Conveyance and Underground Storage of Hydrocarbons Section 16 (1) The provisions contained in Sections 10 to 13 shall apply to the conveyance of hydrocarbons on the basis of concession contracts, while the provisions contained in Sections 24 shall apply to the construction and operation of pipelines conveying hydrocarbon pipelines. (2) Based on a concession for the construction and use of geological structures suitable for the storage of hydrocarbons, the mining entrepreneur is entitled to perform the detailed prospecting of the reservoir in the location, and according to the terms defined in the contract, to apply for the qualification of the area as a mine plot, to enable storage by the location of underground and surface objects necessary for storage, and to operate the reservoir. (3) The concession fee shall be defined by the Minister in the contract. (4) Concessions may be granted together for the construction and operation of hydrocarbon conveying pipelines, and for the underground storage of hydrocarbons. Prospecting for Geothermal Energy, and Exploitation Thereof for the Purpose of Generating Energy Section 17 (1) The beneficiary of a concession in respect of prospecting for geothermal energy, and the exploitation thereof for the purpose of generating energy may, at the location defined in the contract, perform the prospecting necessary for the exploration and utilization of geothermal energy, and following the establishment of the status of mine plot, construct the objects and equipment required for the exploitation and utilization of energy, and may use and sell the energy thus generated. (2) The concession fee payable for the exploitation of geothermal energy shall be defined by the Minister in the contract, with regard to the value of the energy generated. Transfer of the Concession Section 18 The approval of the Minister is required for transfer to another party of the exercise of the mining activity under concession. The Minister shall grant his approval if the receiving party has undertaken to meet all of the contractual obligations burdening the delivering party, and meets the conditions defined in respect of the exercise of activities under concession. Exercise of Mining Activity under Concession Section 19 The beneficiary of the concession shall perform the mining activity in compliance with the requirements prescribed in Section 2, and according to the general rules defined in PART III. PART III GENERAL RULES OF THE PERFORMANCE OF MINING ACTIVITIES Mining Royalty Section 20 (1) The state is entitled to profit sharing, to a mining royalty, for the mineral raw material exploited by the mining entrepreneur, who acquires the property thereof, as well as for the geothermal energy generated. (2) Based on the licence issued by the authorities (Sections 5 and 6) and in the case of the mining activity performed by those holding a mining licence [subsection (6), Section 50] at the time of the coming into force of this Act, the rate of the mining royalty shall be the following, with regard to the value of the quantity of mineral raw material exploited: a) 12% in the case of crude oil and natural gas (including carbon dioxide); b) 5% in the case of non-metallic mineral raw materails exploited by open-pit mining, with the exception of energy resources; c) 2% in the case of other solid mineral raw materials and generated geothermal energy. The Minister may, in agreement with the Minister of Finance, reduce the rate of mining royalty, with regard to the interests of the management of mineral resources or to other public interests. (3) No mining royalty is payable for the crude oil exploited by the application of increased efficiency exploitation technologies. (4) In the case of mining activity performed on the basis of a concession contract (Section 12), the rate of mining royalty shall be defined by the Minister in accordance with the different - types of mineral raw materials, - natural features affecting success of exploitation, - and other public interests, in respect of each location of exploitation. (5) Mining royalty shall be paid in cash. The Hungarian Mining Office may allow, or may require that the mining royalty be delivered in mineral raw materials, in kind. The mining royalty paid, or delivered in kind, may be accounted for as expenses. (6) The amount of the mining royalty expressed in cash is the product of the rate of the mining royalty defined in %, and the value of the mineral raw materials exploited. The rules concerning the calculation of the value of the mineral raw materials exploited shall be established by the Minister, in agreement with the Minister of Finance. (7) The rules of payment, performance in kind of the mining royalty, as well as those of compensation (Section 15), and/or payment of fees [subsection (3), Section 30] serving to make up for the mining royalty, lost due to irregular mining activities performed without a technological operation plan, or mining activities performed in a manner deviating from the plan, shall be established by the Government. (8) A segregated fund shall be formed from 10% of the mining royalty paid annually, for funding the landscape rehabilitation tasks (not performed) that may not be assigned to mining entrepreneurs. The rules of the utilization of the fund shall be established by the Government in a Decree. The part of the amount of mining royalty separated for the account of the Environmental Protection Fund shall be 5% betveen 1 October 1994 and 31 December 1994. The part separated from the amount of mining royalty in favour of the Fund shall be 5% from 1 January 1995 to 31 December 1995. Licensing of Mining Activities Section 21 (1) Mining entrepreneurs may commence mining activities in possession of the licence issued by the mine supervision, and in compliance with the conditions contained therein. (2) If the recovery of geothermal energy requires the exploitation of subsurface water, the mine supervision shall take part in the water licensing procedure as a special authority. Licensing of Prospecting Section 22 (1) The mine supervision shall license prospecting for certain mineral raw materials, and/or geothermal energy resources - within the framework of the concession, by approving the work programme, - in other cases, by issuing the prospecting licence based on the technological operation plan (Section 27). (2) In an exempted location, prospecting shall be licensed by the mine supervision with the approval of the special authorities, and in agreement with the party concerned. If prospecting affects a nature protection area, the mining entrepreneur shall first obtain the permit of the nature protection authority. In other cases, the nature protection authority shall take part in the procedure as a special authority. (3) In the area of prospecting, the licence shall provide the mining entrepreneur with the exclusive right of prospecting for mineral raw materials, and, based on successful prospecting, of having the status of mine plot established. (4) The rules concerning the establishment and size of the area of prospecting shall be established by the Government. (5) The rules of Section 14 shall appropriately apply in the licensing procedure. (6) The beneficiary of the concession is exclusively entitled to effect its prospecting work programme in the area, and according to the conditions defined in the contract, while the party holding the licence of the authorities in respect of mining, in the area, and according to the conditions defined in the licence. Within the framework of the above, it is entitled to perform measurements by instrumental, examinations and borings for the purpose of the establishment of the location, quantity and quality of mineral raw materials, to build prospecting prospecting drifts and shafts, and to apply for the establishment of the status of mine plot. (7) If, in the course of the performance of the work, the mining entrepreneur finds mineral raw materials to which its licence does not extend, the entrepreneur shall report the presence thereof to the mine supervision, and may apply for the extension of the contract or licence to that raw material. The mining entrepreneur shall have priority in respect of the mining of the raw material in question. Licensing of Exploration, Exploitation and of the Utilization of Waste Stockpiles Section 23 (1) The beneficiary of the mine plot may receive a licence for the exploration and exploitation of the mineral resources. Following the completion of prospecting, but from the second year following the end of the licensed prospecting period, at the latest, exploration and exploitation may only be carried out in mine plots, even in the case of hydrocarbons. (2) Exploration and exploitation of mineral raw materials, as well as the utilization of waste waste heaps shall be licensed by the mine supervision by approving the technological operation plan (Section 27). The rules of open mining shall apply to the exploitation of mineral raw materials from waste waste heaps. (3) In the area, and according to the conditions defined in the concession contract or in the licence issued by the authorities in respect of mining, the mining entrepreneur shall be exclusively entitled to explore, exploit, prepare, primarily process, utilize and sell the mineral resources, to locate the objects necessary for these activities, and to use the objects defined in the contract or in the licence issued by the authorities. (4) The quantity of the mineral raw materials exploited, including also the mineral raw materials exploited in the course of prospecting, shall be reported to the mine supervision. Following sale or utilization, the state is entitled to a mining royalty, the rate of which is defined in the contract or in this Act, for the mineral raw materials exploited. Construction and Operation of Hydrocarbon Conveying Pipelines Section 24 (1) Based on the concession or licence of the authorities granted for the construction and operation of hydrocarbon conveying pipelines, the mining entrepreneur is entitled to build and operate the hydrocarbon conveying pipelines, as well as the objects necessary for the operation thereof, and to use the objects defined in the contract. (2) The Government may prescribe, by way of legal rules, the making available of the free capacity of pipelines of oil, natural gas and gas products, as well as of the facilities related to gaswork and storage, for the purpose of the transportation, and/or storage of hydrocarbons of domestic production. Geological Information Supply and Handling Section 25 (1) The mining entrepreneur shall send any geological information on the quantity, quality and location of the presence of the mineral raw materials gained in the course of mining activities, to the Hungarian Geological Service. (2) The mining entrepreneur shall send an account of any changes in the mineral resources annually, and of the mineral resources left behind on closure of the mine, and/or on abandoning the field, to the Hungarian Geological Service. (3) The information provided by the beneficiary of the concession shall be handled as business secret during the period of the concession. Mine Plot Section 26 (1) Mineral raw materials or geothermal energy may be explored and exploited, and geological structures may be used for the underground storage of hydrocarbon in the part of the surface and depth of the ground enclosed for that purpose (mine plot). (2) No status of mine plot needs to be established for the exploration and exploitation of mineral raw materials performed within the framework of prospecting. (3) On application of the mining entrepreneur, the status of mine plot shall be established by the mine supervision, based on the approval of the special authorities concerned. In the course of the procedure, the parties concerned shall also make a statement on the purpose of re-utilization serving as the basis for the recultivation plan. The mine supervision shall notify the parties concerned on the establishment of the status of mine plot, and shall contact the competent land office in order to have the mine plot registered in the real estate register. Mine plots established for the exploitation of crude oil and natural gas (including carbon dioxide gas) need not be registered in the real estate register. Establishment of the status of mine plot shall not qualify as commence- ment of use of land. (4) The mine supervision will establish the status of mine plot for the exploration and exploitation of specific mineral raw materials if it is made plausible by prospecting information provided by the mining entrepreneur (closing report of prospecting), that the occurrence contains industrial resources, and that the conditions of exploitation can be satisfied. (5) The establishment of the status of mine plot, and registration thereof in the real estate register shall not change the ownership, purpose and use of the real estate on the surface of the area covered by the mine plot. (6) The mine supervision shall keep a register of mine plots. (7) If it is justified by the location of mineral raw materials, the mine supervision may change or merge mine plots. If the modification affects a mine plot registered in the real estate register, the land office, too, shall be notified of the modification. The change may not affect the mining entrepreneur adversely. (8) (9) On application of the beneficiary, the mine supervision shall cancel the mine plot from the register, shall notify the parties concerned thereof, and shall contact the land office concerned to have the mine plot cancelled from the real estate register. The obligations of the former beneficiary of the mine plot, in respect of indemnification of mine damages, landscape rehabilitation, safety, as well as environment and nature protection, shall continue to prevail also after the cancellation of the mine plot. (10) Technological Operation Plan Section 27 (1) Mining activities shall be performed on the basis of an approved technological operation plan. (2) The technological operation plan shall be prepared with regard to the technical, safety, health protection and fire regulations, as well as the requirements concerning the management of mineral resources, water management and environmental protection, in such a way that it should provide for the protection of human lives, health, surface and underground facilities, and the land used for agricultural and forestry purposes, the prevention of mine damages, and any damage to the environment and nature, or attenuation thereof, as well as for the fulfillment of the technical plan of landscape rehabilitation. (3) The technological operation plan shall be approved by the mine supervision, taking into consideration the aspects defined in subsection (2). (4) Approval of technological operation plans elaborated for the prospecting, exploration and exploitation of mineral raw materials, the completion of exploitation (closing of mine and/or abandonment of field), as well as for the utilization of waste heaps, requires the agreement of the special authorities concerned. (5) Minerals, mineral associations, fossils detected in the course of mining, considered to be significant from a professional scientific point of view, shall be reported to the competent National Park or Management of Nature Conservation Area, and saving of the findings shall be made possible. Rules of Operation Section 28 (1) Mining entrepreneurs shall comply with the rules of this Act, and the technical, technological safety provisions issued in accordance therewith, and shall make arrangements for the execution thereof. (2) A responsible technical head and a deputy shall be appointed in the mine. The responsible technical head shall be responsible for the execution in the mine of the provisions contained in subsection (2), Section 27, the technical standards and the mining safety rules, as well as for controlling compliance therewith. His responsibility shall not exclude the responsibility encumbering the mining entrepreneur or other persons by virtue of their position or appointment. (3) The appointed responsible technical head and his deputy shall be reported to the mine supervision. The requirements concerning the qualifications of the responsible technical head and deputy shall be defined by the Minister. Joint Exploitation Section 29 (1) If several mining entrepreneurs are simultaneously entitled to work a connected layer of mineral raw materials, they shall coordinate their activities, and shall, within the framework thereof, provide for the conditions of joint, professional and reasonable exploitation. In the absence of agreement, the sequence and conditions of exploitation shall be established by the mine supervision. (2) The parties exploiting hydrocarbon jointly shall appoint a representative from among themselves, who has the rights and duties of a mining entrepreneur. (3) If several mining entrepreneurs are entitled to exploit layers of mineral raw materials covering one another or, connected with one another directly or by protective pillars, the mining entrepreneurs shall agree on the merging of the areas, and on the conditions of exploitation. The validity of the agreement requires the approval of the mine supervision. In the course of granting its approval, the mine supervision may establish conditions in the interest of meeting the contractual obligations, of the management of mineral resources, safety, and the protection of property. Suspension of Exploitation Section 30 (1) Exploitation may be suspended according to the technological operation plan approved by the mine supervision. Any suspension deviating from the approved technological operation plan shall be licensed by the mine supervision. (2) If the suspenion of exploitation affects the responsibilities and competence of other authorities, the mine supervision shall allow suspension with the consent of the special authorities concerned. (3) For the period of suspension, the Minister may establish an obligation of fee payment in the concession contract. No fee may be established for the recovery of mining royalty, if suspension of exploitation is made necessary by Acts of God or mine hazards. (4) In the case of the suspension of exploitation for a period of more than three years, the mine authority or other special authorities may initiate closure of the mine and performance of landscape rehabilitation. Rules of Construction Section 31 (1) The licence of the mine supervision is necessary for the construction and putting into operation of the mining facilities defined in this Act or in a separate legal rule, as well as for the use in mines of certain machines and equipment. (2) If a legal rule stipulates that the licence of other authorities is necessary for the operation of certain mining or related facilities, the mine supervision shall be involved in the licensing procedure. (3) The mine supervision shall control the construction and operation of mining facilities falling under its licensing competence. Security Zone and Protective Pillars Section 32 (1) In the interest of the protection of mining facilities and the environment thereof, a security zone shall be designated. The extent of the security zone, as well as any bans and restrictions to be enforced in the security zone shall be established in legal rules and standards. (2) Residential areas, other surface or underground facilities, water reserves, rivers and stagnant waters, real estates representing a monument, land protected for archeological purposes and nature conservation areas shall be protected against the impacts of mining by designating a protective pillar (boundary pillar, protective section). The protective pillar (boundary pillar, protective section) must not be endangered in the course of mining. Extraction, or reduction of the strength, of the protective pillar may be permitted by the mine supervision with the consent of the authorities concerned, if so advised by the interested parties, provided the protection by the protective pillar is no longer required or the safety and protection requirements can be met in some other way. Mine Plan Section 33 (1) Mining entrepreneurs shall prepare plans (mine plans) related to mine works and mining objects, as prescribed in the rules of mine safety, and complement them with the changes. (2) On completion of mining, a copy of the mine plan shall be delivered to the mine supervision for custody. Safety of Mining, and Plant Supervision of Activity Section 34 (1) Mining activities shall be performed in accordance with the safety standards. (2) The rules of mine safety shall be published by the Minister in a Decree. (3) The mining entrepreneur shall make arrangements that the plant rules elaborated in respect of the protection of persons, the environment and property be available to the workers, and shall take care of controlling compliance with the safety rules, and of the supervision of activities. The plant rules concerning the order of control and supervision shall be sent to the mine supervision. (4) The mining entrepreneur shall, in the plants designated by the mine supervision, provide for mine rescue and explosion protection services, and shall prepare a plan for the prevention of breakdowns, and explosions. The plan shall be forwarded to the mine supervision. (5) The mine operator is obliged to provide for classification of the mine in respect of the most important hazards (water inrush, gas outburst, fire-damp hazard, breakage, coal dust explosion, fire hazard, dust and and silicosis). Serious Accidents and Serious Breakdowns Section 35 (1) Any serious accidents and serious breakdowns shall, without delay, be reported by the mining entrepreneur to the mine supervision, or, if caused by a water inrush, also to the nature protection supervision competent in the region. The order of reporting and investigation shall be defined in the rules of mine safety. The scope of serious breakdowns shall be defined by the Minister. (2) Any serious accident and serious breakdown shall be investigated by the mine supervision. In the course thereof, it shall establish the cause of the accident and/or breakdown, and shall take the measures necessary for preventing cases of similar nature. Landscape Rehabilitation Section 36 (1) The mining entrepreneur shall gradually recultivate the surface area, which can no longer be used, or the use of which has become substantially limited as a consequence of the mining activity, in accordance with the technical plan, and shall, in this way, put the area back in such a condition so that it can be used again, or that it is harmony with its natural environment. (2) The mine supervision shall decide on the tasks necessary for the rehabilitation of the landscape in accordance with the plan prepared by the mining entrepreneur, in agreement with the special authorities concerned, and hearing the parties concerned. (3) Following landscape rehabilitation, the mining entrepreneur is free to dispose of the real estates owned by it. Mine Damages Section 37 (1) The mining entrepreneur shall compensate for the damages defined in subsection (2) (mine damage) in accordance with the provisions contained in subsections (3) to (5). (2) The following shall qualify as mine damage: any damage caused by the mining activity in third parties' real estate, buildings, other components and accessories of the real estate, as well as any damage caused by the withdrawal of water, including the expenses incurred in connection with the prevention, attenuation and termination of damages. The provisions of the Civil Code shall apply to compensation for any other damages caused by mining activities. (3) No compensation is due for any damage caused in building structures if such building structures were erected in areas reserved for mining activity, or within the boundaries of a mine plot, without a building licence, or in breach of the conditions defined therein, in the interest of the prevention of damages. (4) In default of agreement to the contrary, mine indemnification shall be paid in cash. (5) Concerning the indemnification that became due, the mining entrepreneur shall attempt to reach an agreement. In the absence of agreement, the mining entrepreneur shall pay the party incurring the damage the amount of indemnification supported by an expert opinion, within 30 days of the due date of indemnification. (6) The party incurring the damage may enforce his claim for indemnification that became due but not performed within the deadline prescribed, or his claim for additional indemnification exceeding the indemnification already paid, in civil proceedings brought against the mining entrepreneur. (7) Any disadvantage caused by mining facilities located on the basis of easement or expropriation [subsections (3) and (4), Section 38] in the proper use of the real estate, shall not qualify as mine damage. Indemnification due to the owner (manager, user) of the real estate for any hindrance or other disadvantage (e.g. decrease in the market value of the real estate) shall be fixed on establishing the easement, or in the course of the expropriation procedure. Limitation of Surface Real Estate Property Section 38 (1) The owner (manager, user) of the real estate shall tolerate that the mining entrepreneur or the organization entitled to perform geological prospecting, perform observations and measurements, place marks on the territory of the real estate, and/or establish pipelines under or over the surface of the real estate, in a manner that does not prevent the proper use of the real estate. The mining entrepreneur, and/or the organization entitled to perform geological prospecting shall compensate for any damage caused by these activities in accordance with the rules pertaining to mine damages. (2) The following shall also qualify as the activities defined in subsection (1): case-to-case checking of pipelines and fittings thereof, performance of maintenance and repairs work, as well as seismic explosion and surveying. (3) For the purpose of the construction of pipelines, posts, stations and other objects preventing the proper use of the real estate, the mining entrepreneur and the organization entitled to perform geological prospecting may, against indemnification, apply for the establishment of easement. The mining entrepreneur shall attempt to reach an agreement with the owner (manager, user) of the real estate on the establishment of easement, as well as on the method and measure of indemnification, by sending an offer. In the absence of agreement, the establishment of easement and the indemnification payable therefor shall be determined by the Commissioner of the Republic. No appeal may be lodged against the decision of the Commissioner of the Republic through the channels of administration. (4) If the mining facilities to be constructed terminate or substantially hinder the proper use of the real estate, and if the mining entrepreneur needs the real estate for the mining activity permanently, the mining entrepreneur may initiate purchase, or acquisition of the management right of the real estate, or if the above procedure proves to be unsuccessful, it may apply for expropriation. This right is also due to the owner (manager) of the real estate if, in his judgement, the mining object constructed has terminated or substantially prevents the proper use of the real estate. The owner (manager) of the real estate may present his claim within 1 year of the construction of the object. (5) Any expenses incurred in connection with the expropriation undertaken in the concession contract, or becoming necessary in the case of licensing (indemnification, procedural costs), shall be covered by the mining entrepreneur. The amount of the expenses shall be advanced by the mining entrepreneur for the organization commissioned to conduct the procedure of expropriation. On the expropriated real estate, the mining entrepreneur shall, during the period of the right of mining, have the rights pertaining to the possession and use of the real estate free of charge. (6) If the mining facilities defined in subsection (3) affect nature protection areas, areas to be protected hydro-geologically, and/or real estate protected for archeological reasons, or where monuments of art are located, the approval of the special authorities concerned is required for the construction thereof. Construction Ban and Restrictions Section 39 (1) A real estate lying between the boundaries of mine plots may be divided for the purpose of establishing plots, and construction thereon may be performed with the licence issued by the competent construction authority, with the approval of the mining entrepreneur, and in compliance with the conditions defined in the licence. (2) The mining entrepreneur may request the competent construction authority to impose a construction ban or restriction in respect of the construction plot lying between the boundaries of the mine plot. The mining entrepreneur shall indemnify the owner (manager, user) of the real estate for any damage caused in this way. The mining entrepreneur may not request the imposition of a construction ban or restriction if the mine plot has not been entered in the real estate register. (3) On the proposal of the mine supervision, areas containing industrial resources shall be taken into consideration, in the course of country planning. In the area reserved for mining in the country plans, restrictions on the utilization of the area, and/or construction may be introduced. Right to Use of Water Section 40 (1) The mining entrepreneur may use the water removed the interest of the safety of mining activity (pit water) for mine industrial purposes. (2) The utilization and marketing of mine waters, use of other waters, modification of the bed of surface waters and rainwater drain are governed by the legal rules for environmental protection and water conservancy. (3) In the water licensing procedure connected with mining, the water authority shall decide with the consent of the special authorities concerned. (4) The mining entrepreneur shall not be responsible for any changes in the quantity of mine water, under the value licensed by the authority. Fines, Measures and Guarantees Section 41 (1) The mine supervision may impose a fine on, and may prohibit the continuation of the activity of legal entities or natural persons, and the unincorporated associations thereof, who (which) perform mining activities without a licence. (2) If the mining entrepreneur performs the mining activity in breach of the rules, or in a manner deviating from the licence, and the period defined in the notice of the mine supervision drawing its attention thereto has also elapsed without any results; the mine supervision may impose a fine on the mining entrepreneur, may suspend continuation of its activities, may withdraw the licence, or may initiate termination of the concession contract and may order the restitution of the original state, or, if it is no longer possible, landscape rehabilitation. (3) If the mining entrepreneur has created a direct and serious emergency by the performance of the mining activity in breach of the rules or in a manner deviating from the licence, the mine supervision may, without a notice drawing its attention thereto, impose a fine, may suspend its activity, may withdraw the licence, or may initiate termination of the concession contract, and may order the restitution of the original state, or, if it is no longer possible, landscape rehabilitation. (4) The upper limit of the fine shall be established by the Government in a Decree. (5) In respect of the meeting of the obligations burdening the mining entrepreneur, with special regard to the provision of financial guarantees for the compensation for mine damages and the meeting of the obligation of landscape rehabilitation, the Minister may, based on the offer of the mining entrepreneur, require the conclusion of an insurance contract or the provision of collateral in the concession contract, while the mine supervision may do so in the licence. If the mining entrepreneur fails to meet the above obligation by the deadline set, the mine supervision may suspend, until the meeting of the obligation, commencement or continuation of the mining activity. Closing of Mines, Abandonment of Fields Section 42 (1) On conclusion of exploitation, when judging the technological operation plan [subsection (4), Section 27] elaborated for closing of the mine, or abandonment of the hydrocarbon field, the possibility of using for other purposes the underground workings of the mine closed and other facilities thereof that may be used for other public purposes, and the hydrocarbon field abandoned, shall also be examined. In the course thereof, consideration shall be given to the utilization and termination of waste heaps. (2) The underground workings that will not be further used shall be abandoned in such a condition that it should not be a hazard to the environment, or the surface. (3) The technical plan prepared in respect of the use of the underground workings and other mining facilities for other purposes shall be approved by the mine supervision, taking into consideration the expert opinions of the special authorities concerned and the Hungarian Geological Service, and the execution thereof shall be controlled by the mine supervision and the special authorities concerned. (4) Based on the approval of the local government and the special authority concerned, the mine supervision shall provide in the licence defined in subsection (3) for the termination of facilities serving the purpose of public water supply, or the further operation thereof with regard to public interests. PART IV STATE SUPERVISION OF MINING MINE SUPERVISION Section 43 (1) The specialized administrative tasks of the state related to mining shall be performed by the mine supervision. (2) In the course of the performance of the activities falling under its supervision (Sections 44 to 46), it is the task of the mine supervision to protect the life, physical condition and health of the workers, and to control compliance with the rules regarding the management of mineral resources, the protection of the environment, landscape and nature, technical safety and fire protection. (3) Within the framework of the supervision exercised by the mine supervision in the capacity of authority, it shall have competence in technical-safety, labour protection, construction authority construction supervision, and mineral resources management affairs, as defined in this Act and in separate legal rules. Its fire protection authority competence shall extend to the underground parts of mines, and the surface parts of mines falling under the same consideration. (4) With the exception of the cases defined in legal rule, in the authority type matters falling under the competence of the mine supervision, the mine station competent in the region shall proceed at the first instance, and the Hungarian Mining Office shall proceed at the second instance. (5) The Hungarian Mining Office is an organ of the state administration, with national competence, operating under the control of the Government, the supervision of which is exercised by the Minister, who also exercises the employer's rights in respect of the President of the Office. (6) The headquarters and region of competence of the regional mine stations shall be defined by the Minister, on the proposal of the President of the Hungarian Mining Office. (7) The Hungarian Mining Office shall prepare the decisions of the Minister relating to the management of mineral resources, and concession contracts, and shall also prepare the mine safety rules referred to in subsection (2), Section 34, and shall control execution thereof. Section 44 (1) The competence of the Mine Supervision shall include a) technical-safety, labour safety, construction authority and construction supervision of - the activities and facilities defined in subsections (1) and (3), Section 1 of this Act, - propane-butane filling stations, - industrial explosion activities, and b) technical safety and labour safety supervision of - underground activities to extract non-mineral raw materials using mining technologies (including shaft sinking, deep hole drilling, tunnel and road drifting) with the exception of civil engineering works, - research in the field of explosion engineering, - research in the field of safety in mine carried out in underground facilities, - test stations operated for the purposes of mining, training mines as well as c) supervision of the organisation and operation of mine-rescue and blowout prevention services. (2) The provisions of Act IV of 1957 on the General Rules of the Procedure of State Administration shall apply to the proceedings of the mine supervision. Supervision by the Mine Supervision of the Raising to the Surface of Abyssal Waters Section 45 (1) The safety technical supervision of the work aimed at the raising to the surface of subsurface waters, and performed by using mining technologies, shall be exercised by the mine supervision in the capacity of an authority. Within the framework of authority supervision, the mine supervision shall act directly in matters concerning the safety and professional standards of the work and operation, while the taking of measures serving to protect subsurface water resources shall be initiated by it with the environment protection and water authorities. (2) The mine authority shall, in respect of mine technical matters, take part in the water licensing procedure related to the raising to the surface of subsurface waters on mine plots. (3) The competence of the mine supervision shall include the authority supervision of the storage in hydrocarbon reservoirs of water raised to the surface together with hydrcocarbons. Authority Supervision of Underground Storage Spaces Section 46 (1) The mine supervision shall license the construction, putting into use and closing of undreground workings with an areaof more than 300 square metres, and constructed by mining methods, over which natural strata can be found, unless it forms an integral part of the overground building structure (underground storage). (2) The mine supervision shall keep a register of the underground storages. (3) The owner (manager) shall take care of the maintenance of the condition of underground storages. Procedural Fee Section 47 A procedural fee is payable for the special administrative procedures defined in the legal rule. The rate of the fee payable, and the method of payment shall be established by the Minister in a Decree. Hungarian Geological Service Section 48 Geological, and geological prospecting tasks, as well as the tasks related to the management of mineral resources of the state shall be performed by the Hungarian Geological Service, as an independent institution of the budget. PART V DEFINITION OF TERMS Section 49 The different terms used in this Act cover the following: 1. "Mineral raw material" is the concentration of natural solid, gaseous or liquid minerals of natural origin, to be found on the surface of the earth or in the earth`s crust under the surface, which can be utilized directly or after processing. 2. "Mineral resources" form that part of the mineral raw materials, the quantity and quality of which are defined by estimation or calculation, on the basis of geological, mine technical and mine economic aspects. 3. "Management of mineral resources" includes the activities, measures, production programmes, prospecting, exploration and working systems and methods, which serve the economical exploitation of mineral raw materials in such a way that they do not damage the parts of the occurrence not included in the mining activity, and protect them for the purpose of future exploitation; and enable at the same time the reduction of losses, as well as the as the exploitation so complete as technically possible of the mineral raw materials, as justified by the market relations. 4. "Mining" (mining activity): prospecting for, exploration and exploitation of mineral raw materials, as well as the activities related thereto, and the management of mineral resources. For the purposes of this Act, the following shall qualify as mining activities: a) preparation of the mineral raw materials exploited, primary processing thereof in the mining of hydrocarbon; b) discontinuance, closing of mines; abandonment of hydrocarbon fields; c) landscape rehabilitation following completion of mining activity; d) construction and operation of hydrocarbon conveying pipelines; e) construction and utilization of geological structures suitable for the storage of hydrocarbons, for the purpose of storage; and f) prospecting for and exploitation of geothermal energy. 5. "Mining entrepreneur" is the legal entity or natural person, and/or unincorporated company entitled to perform mining activities. 6. "Preparation" is the activity immediately following exploitation which includes the on-site collection, transport, physical separation, splitting, classification and enrichment by physical methods of solid mineral raw materials, as well as the purification and separation of crude oil and natural gas. 7. "Pre-prospecting" is the prospecting activity aimed at the detection of the existence of mineral raw material occurrence, and the definition of the approximate extent and quantity of the mineral raw materials. 8. "Primary processing" is the activity performed by the mining entrepreneur immediately after preparation, by which the mineral raw material prepared is made suitable for further processing or further use (extracting propane-butane, gasoline processing; briquetting production, etc.). 9. "Exploration" is the mining activity aimed at commencement of the exploitation of mineral raw materials. For the purposes of this Act, exploration includes - opening up (primary opening up), field development and fore-winning in underground mining, - removal of the rock (stripping) and preparation of the opening trench in surface mining. - in hydrocarbon mining and the utilization of geothermal energy resources, the development of fields and trial production, as well as production during the period of prospecting and exploration. 10. "Geological prospecting" is the technical and scientific activity aimed at learning about the features of the earth's crust in respect of its substance, structure and evolution history, except for any research on protected natural values and natural values deserving protection. 11. "Geothermal energy" is the intrinsic energy of the earth's crust which can be utilized for the purpose of generating energy, by exploiting thermal water, or using some other technology. 12. "Geothermal energy carriers" are, for the purposes of this Act, the materials of different physical state (e.g. subsurface water, steam) which enable the utilization of the intrinsic energy of the earth's crust for the purpose of generating heat energy, by exploitation or the use of some other technology. 13. "Industrial explosion activity" is the distribution, storage, keeping, utilization and destruction of explosives used for explosions for purposes other than those of defence and the police. 14. "Industrial resources" are that part of the geological resources which can, at the given time, be exploited economically. 15. "Exploitation" is the extraction, separation and raising to the surface of mineral raw materials from their (natural place of occurrence. For the purposes of this Act, the exploitation of mineral raw materials from abandoned waste heaps shall also qualify as exploitation. 16. "Exempted places" are, where mining activity may be performed only under the conditions defined in the licence issued by the mine supervision in agreement with the competent authority. The following will qualify, among others, as exempted places: downtown districts, part of outskirts to be built up, the area serving the purpose of traffic, plant area, cemetery, the bed of water course or stagnant water, area under or over suspended railways or lines and the safety zone thereof, water objects, potable water, mineral water, medicinal water, any well and the designated protective area thereof, protective forest, protective zone around health-resorts and holidayresorts, protected natural area, real estate under the protection of monument of art or archeological protection, as well as the area of objects of defence. 17. "Prospecting" is such a mining activity performed by geological (geological, geophysical, geochemical) and engineering methods, the purpose of which it is: - to explore the occurrence of mineral raw materials; - to border the layer of mineral raw materials explored, and to learn about the quantity and quality thereof, and - to learn about the geological structures from the point of view of suitability for the underground storage of hydrocarbon. The legal rules on nature protection shall provide for activities aimed at the exploration and prospecting of caves. 18. "Area of prospecting" is the area bordered for prospecting for mineral raw materials, as defined in the concession contract or the prospecting licence. 19. "Occurrence" is the place of the natural presence of mineral raw materials (e.g. stratum, bed, deposit). 20. "Open area" is every such area which does not qualify as closed area in respect of the mineral raw material in question. 21. "Waste heaps" are the accummulated mass of solid materials exploited in the course of the exploitation of, or together with, mineral raw materials, and separated therefrom by physical methods. 22. "Hydrocarbon conveying pipelines" (long distance pipelines) are the pipelines including the fittings and appliances thereof, which convey natural gas, crude oil or the products thereof from the issuing point (crude oil, natural gas preparation plant, crude oil refinery, gas processing plant) of production (preparation, production, storage), the starting station, and/or from entering the border of the country, to the delivering station of utilization (inhabited settlements, industrial objects) and processing, or the border of the country. Fittings forming part of the pipelines are: - the starting and transmitting station - technological facilities for operation of the transport pipe (boosting-filling, racking, blowdown, sectionalizing, purifying stations) and the equipment for track indication; - objects and equipment for the operation, control and checking of the pipelines (remote supervision, communications, corrosion prevention). 23. "Landscape rehabilitation" is the activity aimed at making the area affected by the mining activity suitable for re-utilization (mining recultivation), or development thereof in harmony with its natural environment. 24. "Closed area" is the area bordered for the purpose of prospecting for, exploring and exploiting specific mineral raw materials, and designated for concession tender, as well as the areas defined in paragraphs a) to c), subsection (6), Section 50 of this Act in respect of the given mineral raw materials. 25."Mining process of increased efficiency": process for final production of additional oil, which increases the quantity of oil producible by means of primary and secondary production processes. The bed energy can be increased thermally or chemically or by gas injection or in other ways (e.g. electromagnetically). PART VI PROVISIONS OF PUTTING INTO FORCE, AND TEMPORARY PROVISIONS Section 50 (1) This Act shall come into force on the 30th day following its promulgation. (2) Any geological data, calculations and registers concerning mineral resources, obtained in the course of prospecting funded from the State Budget, or in the course of the activities of stateowned companies performed prior to the coming into force of this Act, shall be made available to the Hungarian Geological Service. (3) Simultaneously with the coming into force of this Act, Act III of 1960 on Mining, and Act XLII of 1990 amending the above, Section 1 of Law-Decree No. 17 of 1980, and Section 6 of LawDecree No. 25 of 1981, as well as subsection (1), Section 2, Sections 3 and 6 of Act VII of 1969 on Gas Energy shall cease to have effect. (4) Simultaneously with the coming into force of this Act, Section 68 of Act XX of 1991 providing for the scope of responsibilities and competence of local governments and their organs, Commissioners of the Republic, and certain centrally subordinated organs thereof, shall be replaced by the following provisions: "Section 68 (1) Based on the provisions contained in subsection (2), Section 38 of Act XLVIII of 1993 on Mining (hereinafter "MA"), on application by the mining entrepreneur, and in the absence of an agreement, the establishment of mine easement and the indemnification due in return shall be determined by the Commissioner of the Republic. No appeal may be lodged against the decision of the Commissioner of the Republic through the channels of state administration. (2) The expropriation procedure instituted on the basis of subsections (3) and (4), Section 38 of MA shall be conducted by the Commissioner of the Republic. (3) The construction authority shall decide on the imposition of a construction ban or restriction, initiated on the basis of subsection (2), Section 39 of MA, in respect of the building plot lying between the borders of mine plots." (5) The designation for the first time of closed areas shall be commenced thirty days after the coming into force of this Act, and shall be completed within one year. (6) The economic organizations [paragraph c), Section 685 of the Civil Code] and natural persons holding mining licences on coming into force of this Act a) may continue the mining activity in their mines under working; and b) will acquire a right of exploitation in respect of the areas already prospected and covered by mine plots, the exploration of which they undertake to perform applying the conditions defined in Section 15; and c) may complete the prospecting already in progress in respect of the raw materials defined in their prospecting licences, issued and valid, by the deadline set in their licence but within 4 years, at the latest, and may initiate with the Minister the conclusion of concession contract for exploration and exploitation by submitting their work programmes following the establishment of the status of mine plot, and/or may apply to the mine supervision for the granting of the permit (Section 23) in the cases defined in Section 5 of this Act, and paragraph a), Section 2 of Act XVI of 1991 on Concession. (7) In the case of prospecting performed by employing special methods, the Minister may, on application by the party performing prospecting, establish a deadline 2 years longer, at the most, than that defined in paragraph c), subsection (6). (8) The economic organizations and natural persons performing mining activities shall, within 3 months of the coming into force of this Act, forward to the Minister their area surveys prepared in accordance with the provisions contained in subsection (6). The Minister may invite a public tender in respect of the freed areas not included in the area surveys submitted by the deadline, and/or in accordance with the provisions contained in paragraphs b) and c), subsection (6). (9) The Act on the Budget may, in each year until 1997, establish a rate of mine royalty differing from the rate established in paragraph a), subsection (2), Section 20 of this Act, but not exceeding 40%, steadily decreasing annually, for the crude oil and natural gas exploited and sold from the hydrocarbon fields falling under the effect of the provisions contained in paragraphs a) and b), subsection (6). (10) If the beneficiary of the mine plot fails to meet the obligation defined in subsection (8), the mine supervision shall, ex officio, take measures in the interest of the cancellation of the mining licence of the defaulting party, and surrender of the geological information. (11) Wherever there is reference in legal rules to the competence of the Central Geological Office or the regional geological service, as an authority or special authority, a) the Hungarian Mining Office, and the organs of the first instance thereof (district mine stations) shall be understood, in respect of prospecting for, exploration and exploitation of mineral raw materials, and the management and protection of mineral raw materials; b) the Hungarian Mining Office shall obtain the expert opinion of the Hungarian Geological Service in the sphere falling under the effect of paragraph a); c) state geological tasks and tasks of the special authorities shall be performed by the Hungarian Geological Service in the sphere not falling under the effect of paragraph a). A separate legal rule shall provide for the detailed tasks, operation and institutions of the Hungarian Geological Service. (12) The Government shall provide for the execution of the provisions contained in Sections 1, 4, 11, 18, 20, 22, 23, 24, 26, 27, 28, 30, 31, 32, 33, 34, 36, 38, 39, 41, 42, 43, 44, 45, 46 and 50 of this Act. (13) The special rules concerning the moral and financial appreciation of miners shall be established in a separate legal rule.
