NORTH MACEDONIA Trends and Developments Contributed by: Ana Tosic Chubrinovski, Ivica Jevtic, Ljupka Naumoska Gjorgjievska and Marija Boceska, JPM Partners North Macedonia
Legal Safeguards and Protection of Mining Investments Investment security is a central component of any serious decision to enter a mining project. The Repub - lic of North Macedonia is progressively consolidat - ing its profile as a jurisdiction in which concession rights are legally protected, transferable and capable of serving as financial collateral. Modern legislation provides clear and narrowly defined conditions under which a concession may be revoked, thereby limiting room for discretionary decision-making or politically motivated interventions. The state is party to a network of bilateral investment treaties that protect foreign investments and provide access to international mechanisms for resolving investment disputes. This enables investors, in the event of a dispute, to seek redress not only before domestic courts but also through international arbitra - tion. The ability to pledge concessions as collateral to banks and financial institutions is crucial for project finance and allows optimisation of equity deployment, which is particularly important in a capital-intensive industry such as mining. Strengthening Compliance, Enforcement and Market Integrity Systems for public disclosure of concession proce - dures, fiscal obligations and production data are being strengthened and progressively expanded. Inspection oversight of mining activities is becoming more inten - sive and standardised, with efforts to limit adminis - trative discretion and introduce strict deadlines for regulatory action. At the same time, measures aimed at combating illegal extraction are being tightened through enhanced powers for inspection services, mandatory reporting obligations and higher penalties. In this way, not only are natural resources protected, but so too are legitimate investors operating within the system and complying with applicable rules. Strength - ened enforcement and improved transparency con - tribute to a more level playing field and enhance con - fidence in the regulatory framework. Conclusion The mining sector in the Republic of North Macedonia is undergoing its most profound transformation in sev -
cal sustainability and the distribution of created value among the central budget, local communities and economic actors. European policies on critical raw materials and regional development clearly indicate that the stability of mining projects depends not only on legal certainty and favourable tax rates but also on the degree of social integration of the industry within the communities where extraction takes place. In the Republic of North Macedonia, concession fees and a portion of sectoral charges are allocated specifi - cally to municipalities in which mining activities are performed. This model strengthens the direct link between local development and the functioning of the mining indus - try and serves as a practical mechanism for building the so-called social licence to operate. Through these revenues, local governments finance road infrastruc - ture, utilities, water supply systems, schools and oth - er public facilities, as well as environmental projects related to monitoring, remediation of degraded areas and improvement of living standards. Within ongo - ing reform processes, further enhancement of this model is being considered through the establishment of programme-based funds focused on the long-term sustainable development of mining regions. Such funds would provide structured support for the diversification of local economies, development of small and medium-sized enterprises, educational and vocational retraining programmes and green infra - structure projects. This approach is compatible with leading European practice, where part of resource revenue is channelled into transition funds for region - al development with the aim of ensuring long-term socio-economic resilience in communities depend - ent on extractive industries. For investors, this fiscal architecture delivers additional value by reducing local social risk, minimising the potential for on-the-ground disputes and increasing institutional support for pro - ject implementation. In practical terms, this leads to shorter project devel - opment timelines, lower operational and transaction costs and a higher degree of long-term predictability – factors that today are as important in investment calculations as traditional tax incentives and legal guarantees.
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