GERMANY Law and Practice Contributed by: Stefan Altenschmidt, Pauline Müller and Ina Schwanke, Luther Rechtsanwaltsgesellschaft mbH
or taxes for mining activities. For exploration, the per - mit holder must pay EUR5 per square kilometre in the first year. This fee increases by EUR5 each year up to a maximum of EUR25. Holders of approvals or mining properties must pay an annual extraction tax equalling 10% of the market value of the resources extracted or co-extracted within the approval area during the respective year. However, the federal states can set different amounts for the fee and the extraction tax. Provided they have a licence and comply with the regulatory framework, mining companies are free to operate. 1.5 Nature of Mineral Rights Mineral rights do not have a constitutional basis in Germany, but are derived from legislation. The legal basis is therefore the Federal Mining Act. Mineral rights are granted as licences by the mining authorities (see 1.3 Ownership of Mineral Resources ). Although the rights granted by the licence are not property rights, the property regulations generally apply. Min - ing property constitutes a special form of proprietary right. Licences are transferable and, in the case of mining property, alienable with the approval of the mining authority. Once granted, a mining licence is protected by constitutional property rights, meaning it can only be revoked in accordance with constitu - tional law. Ownership of mineral resources is acquired by the holder of the mineral rights upon extraction, or more specifically upon taking possession of the mineral resources. Constitutionally protected rights to the mineral resources themselves only arise after extrac - tion. Licences for exploration and extraction do not yet confer ownership rights to mineral resources. 1.6 Granting of Mineral Rights Mineral rights are granted by the relevant mining authority in the form of licences. Such a licence is con - sidered an administrative act under German law. The mining authorities of the federal states are responsi - ble for enforcing the Federal Mining Act, including the granting of licences. While most federal states have their own mining authority, the Lower Saxony State Office for Mining, Energy and Geology is also the responsible authority
for the federal states of Schleswig-Holstein, Bremen and Hamburg. Berlin does not have its own mining authority; instead, the Brandenburg State Office for Mining, Geology and Natural Resources is responsi - ble. 1.7 Mining: Security of Tenure Under the Federal Mining Act, licences grant the hold - er exclusive use rights for a limited period of time. A permit for exploration activities is valid for a maximum of five years and can be extended by a further three years. The term of approval for extraction rights and mining property depends on the particular case, but should be granted for an appropriate period for car - rying out the extraction. A term of more than 50 years is only permissible if it is deemed necessary in light of the investments typically required for extraction. Extension of the approval or mining property rights until the deposit is expected to be exhausted is pos - sible. An exploration permit provides priority rights for the mineral resources covered by the permit within the exploration area. Applications for mining approv - als must be communicated to the party entitled to explore. If the permit holder also submits an applica - tion for a mining approval within three months, this takes priority over all other applications. Licences are transferable and, in the case of mining properties, alienable with the approval of the mining authority. The competent authority may only refuse approval on the exhaustive grounds listed in the Fed - eral Mining Act relating to the new licence holder. Rea - sons for refusal include lack of reliability and failure to provide proof that the financial resources required for exploration or extraction can be raised. The competent authority shall revoke the licence if reasons for refusal arise after it has been granted. If a permit holder does not initiate exploration within one year due to reasons for which they are responsible, the permit shall be revoked. However, the compe - tent authority may extend the deadline by one year if there are good reasons for doing so. Additionally, the (exploration) permit may be revoked if the holder does not apply for approval to extract mineral resources, despite meeting the necessary requirements.
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