KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
Subsoil Use Contracts for Solid Minerals (Except for Uranium) Concluded Before 29 June 2018 Exploration contract A standard contract for exploration of solid minerals could be concluded for a period of six years. In the event of a deposit discovery, the subsoil user has the right to extend the exploration period for the duration necessary for appraisal. The subsoil user who discovers a deposit of solid min - erals, as outlined in the subsoil use contract, has the exclusive right to obtain a mining licence on a priority basis. Mining contract A standard contract for mining of solid minerals could be concluded for a period of no more than 25 years, and for deposits with large and unique mineral reserves, no more than 45 years. A mining contract can be extended for no more than 25 years (for an unlimited number of times). In the case of extension of a mining contract or com - bined exploration and mining contract (mining period) of solid minerals on a subsoil site containing a large deposit for a period exceeding ten years, the MIC may include in the terms of such extension one of the fol - lowing obligations of the subsoil user: • creation by a subsoil user or its subsidiary or a joint venture of processing facilities; • modernisation or reconstruction of the subsoil user’s existing production facilities; • modernisation or reconstruction of existing pro - cessing facilities; • supply of mined minerals to processing enterprises (production facilities) located in the territory of the RoK; or • procurement by a subsoil user, its subsidiary or a joint venture of an investment project in accord - ance with the Business Code or a project aimed at the social and economic development of the region.
• issuing a licence to a person recognised as legally incompetent, and who was such on the day of issue; and • if the issuance of a licence is not provided for or is prohibited by the SSU Code. The authority to invalidate a licence rests with the court. The statute of limitations for disputes relating to the invalidity of a licence is three months from the day when the plaintiff becomes aware, or ought to have become aware, of the circumstances that constitute the basis for declaring the licence invalid. Also, note that the APPC specifies the principle of “Protection of the Right to Trust”, which serves as a “guarantee” for the administrative authority that the adopted administrative act (such as a licence) is law - ful and consistent. An administrative act (licence) is considered lawful and justified until the administrative authority, public official or court establishes otherwise in accordance with the RoK legislation. An error committed by the administrative authority (such as the MIC) cannot be turned against the party (subsoil user). That said, a subsoil user cannot invoke such principle in cases specified in Article 84.6 of the APPC (eg, when there is established deliberate falseness of a document or information provided by a subsoil user). The Civil Code specifies that an individual or legal entity whose rights are violated may demand full compensation for the losses incurred, including actual damages and lost profits. Losses incurred by an individual or legal entity as a result of the issuance of an act by a state authority or another government body that does not comply with the legislation, as well as the actions (or inaction) of the officials of these bodies, shall be compensated by the RoK or, respectively, by the administrative- territorial unit.
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