TIMOR-LESTE Law and Practice Contributed by: João Afonso Fialho, Tomás Cabral Anunciação and Teófilo de Jesus, VdA
1.5 Nature of Mineral Rights The Timorese mineral regime may be described as a contractual system, with the operational and economic terms and conditions found under the mineral agreements/licences executed prior to and for the exercise of mineral rights. The award of a mineral right provides an exclu - sive right to access and conduct mineral activi - ties, with the holders of the mining rights being the owners of all minerals extracted and pro - duced, in accordance with the Mining Code. The holders of mineral rights do not acquire property rights over the concession areas. 1.6 Granting of Mineral Rights The award of mining rights in Timor-Leste is made by means of direct award or public tender (on a first come, first served basis). The relevant awards procedure and awarding entity will be determined based on the type of mineral and the industrial/artisanal nature of the operations. Direct Awards On the recommendation of the National Author - ity of Mineral Resources, the member of gov - ernment responsible for the mineral resources sector may decide not to launch a public tender procedure and may directly award mineral rights in the following cases: • where the area is considered as a new area delimitation with insufficient information and data; • where no bids were received in a previous public tender; • where there are health, safety and environ- mental risks associated with the mining area; • where the minerals are regarded as strategic; • where the National Mining Company is being awarded the mineral rights; or
owner of all mineral resources, and the terms and conditions for the award to, and exercise by, third parties of exploration and mining rights are established in the Mining Code. Mineral rights may be granted to private entities as well as to the national mining company (Murak Rai Timor, EP). The Mining Code expressly states that the hold - er of mineral rights is the owner of all miner - als extracted and produced in accordance with the Mining Code. Minerals that are unlawfully extracted remain the property of the state. If mineral resources are found in privately held are - as, the state may acquire the area through direct negotiation with the owner, or expropriation (where there is properly justified public interest, and subject to the expropriation being carried out in a non-discriminatory manner in accord - ance with the law and subject to the payment of fair compensation). 1.4 Role of the State in Mining Law and Regulations As the original owner of all mineral resources in Timor-Leste, the state acts as a grantor-regulator of mineral rights and is responsible for award - ing mineral rights and overseeing how mineral activities are conducted. The participation of the Timorese State in min - ing activities is expressly foreseen in the Min - ing Code, with the state either acting on its own whenever this is deemed strategic by the Coun - cil of Ministers and following a recommenda - tion issued by the National Authority of Mineral Resources, or in co-operation with private par - ties, up to a maximum amount of 30% of par - ticipating interest.
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