OREANDA-NEWS. July 03, 2012. Kyrgyz Government has canceled paragraph 132 in the Government Decree of April 4, 2012. Now the mining companies are not obliged to create a legal entity with gratuitous transfer from 20 percent of share of this company to the Kyrgyz Republic, reported the press-centre of IBC.  

The Regulation on the Procedure for Licensing and Subsoil Use Rights approved by the Government Decree № 228 of April 4, 2012, provoked strong reaction from the mining companies. Paragraph 132 of this Provision obliged companies that intend to develop deposits with reserves of resources estimated at 50 million US dollars and more, to establish a business entity with the subsequent gratuitous transfer of 20 percent of share to the Kyrgyz Government.

The International Business Council initiated an Open Meeting titled "Legal aspects restraining development of the mining industry in Kyrgyzstan." At the IBC Open Meeting members of the IBC Mineral Resources Committee and other interested parties discussed the problems of the mining industry. Business community representatives and investors said that paragraph the Provision should be cancelled. Members of the Government and deputies supported investors. Taking into account suggestions and comments of participants, it was decided to review the paragraph 132 of the Provision on the Procedure for Licensing and Subsoil Use Rights.

On June 18, 2012 the Government adopted the Decree #425 “On amendments and additions to the Kyrgyz Government Decree "On Approval of Provision on the Procedure for Licensing and Subsoil Use Rights” of April 4, 2012 № 228.

The main changes and additions adopted by the Resolution:

Cancellation of Paragraph 132 in wording approved by the Government Resolution dated April 04, 2012, i.e. according to the Resolution № 425. Henceforth, mining companies will not have to establish an entity with the subsequent gratuitous transfer of 20% of its share to the Kyrgyz Government.

Removal of the bank guarantee from the Regulation on the Procedure for Licensing and Subsoil Use Rights.

Removal of the obligation to provide certain types of documents to participate in auctions.