TIMOR-LESTE Law and Practice Contributed by: João Afonso Fialho, Tomás Cabral Anunciação and Teófilo de Jesus, VdA
for an exploration and appraisal licence. While transiting to the mining stage, the relevant hold - er of exploration rights must apply for a mining licence by submitting a mining plan (including a technical, economic and financial feasibility study) for approval. Only in cases of manifest technical and financial incapacity, or by the deci - sion of the holder of exploration and appraisal rights, are the mining rights not awarded to the entity that carried out the exploration works. Holders of mineral rights are entitled to sell min - erals obtained as a result of mining activities, developed in accordance with the relevant min - eral contract or licence. Unprocessed minerals may only be exported if: • the domestic industry is not capable of absorbing the unprocessed minerals; • from a technical and economic point of view, the processing of the minerals in Timorese territory is not justifiable; and • the exported minerals are classified as stra - tegic minerals (exportation being subject to previous approval by the competent body). The sale of minerals by a third party (namely, not the holder of the mining rights) is subject to the issuance of a marketing licence. Duration of Mineral Rights and Extensions An exploration and appraisal licence has a maximum duration of four years, but it may be extended by successive two-year periods up to a maximum of an additional six years. Min - ing rights can be awarded for a maximum of 25 years, which may be extended by successive five-year periods up to a maximum of an addi - tional 25 years.
Different rules apply to artisanal mining and the exploration and mining of construction materi - als. Transfer of Mining Rights and Change of Control Assignment, sale or any type of transfer of a mining right is subject to written consent by the Ministry of Petroleum and Mineral Resources or by the National Authority of Mineral Resources, as applicable. Transfer of a dominant interest or participation in a company that holds mining rights is also subject to written consent by the Ministry of Petroleum and Mineral Resources or by the National Authority of Mineral Resources, as applicable, following a written notice sent by the interested shareholder to the National Authority of Mineral Resources. This written notice must contain the identification details of the assignee or transferee and the terms and conditions of the transaction. Termination Mineral rights may be terminated early by the Timorese State if: • there is a serious breach by the holder of the mineral rights of the legal or contractual obli - gations arising from the mineral contract; • the holder of the mineral rights fails to comply with the statutory requirements related to the award of the relevant licence; • a series of environmental damages occurs as a result of the mining activities, and such damages are attributable to intent or gross negligence on the part of the holder of the mineral rights; • the holder of the mineral rights fails to com - ply with the obligation of restoring an area impacted by mining activities, in breach of the applicable environmental quality standards;
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