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23/06/2024
Mining News

Brskovo Concessionaire Faces Uncertainty: Considers Legal Action Amidst Ambiguous Termination Clause

The stance of the Office of the Protector of Property and Legal Interests of Montenegro is that the state has legal grounds and should terminate the concession agreement with the company Brskovo Mine for geological exploration and exploitation of ore in the area of the former Brskovo mine near Mojkovac. This was announced by the deputy from the Office of the Protector, Slavica Laković, during a session of the newly established Interdepartmental Working Group tasked with preparing a professional analysis of this concession agreement.

The working group was formed by the Minister of Energy and Mining, Saša Mujović, and has a deadline of 30 days to provide a recommendation to the Government regarding this concession.

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Representatives of the concessionaire could not answer Vijesti’s question regarding whether they would sue the state for compensation in the event of contract termination.

‘We cannot disclose an official position to avoid influencing the work of the working group,’ Vijesti was informed.

The mine was granted under concession in 2010, and since then, there have been several changes in ownership of the concessionaire. The basic contract has been amended six times through annexes, extending deadlines for fulfilling certain obligations. Geological exploration was supposed to be completed within four years but continued into 2020.

The Protector bases their position on Annex 4 of the contract, in which the concessionaire agreed to bear the risk if spatial planning documentation is not adopted and urban-technical conditions (UTU) are not issued. It is also noted that the deadline for obtaining UTU from the last annex to the contract expired on July 25 of the previous year.

The concessionaire’s lawyer, Luka Popović, stated that this is an ambiguity in the contract to the detriment of the concessionaire. Still, he believes that there must be a breach of the contract by the concessionaire for the state to terminate the contract to their detriment. He referred to Article 39 of the basic contract, according to which all deadlines for the obligations of the concessionaire are extended for the period of the state’s delay in its obligations. He also mentioned that the state has been delayed for three years in adopting spatial planning documentation, which is still pending.

The President of the Working Group and State Secretary in the Ministry of Energy and Mining, Vesna Brajović, along with group members Deputy Protector Slavica Laković and Municipal Assembly member Miloš Rajković, did not agree with that interpretation. They stated that by signing the annex to the contract, the concessionaire accepted the risk of not obtaining UTU for the construction of facilities necessary for ore exploitation, and the deadlines for this have now expired.

Rajković mentioned that the contract allows for the termination of the concession if the concessionaire provides inaccurate information in the documentation, which, as he stated, this concessionaire has done multiple times.

The representative of the concessionaire, Zoran Arsenijević, stated that this pertains to the disclosure of inaccurate data about the quantities of exploited ore, which determines the amount of the variable concession fee, and not for inaccurate data in other documentation. Rajković responded that this is not true.

Working group member Miodrag Fuštić from the civic initiative ‘For a Healthy Mojkovac’ stated that such an interpretation by the concessionaire means there are no deadlines for fulfilling obligations, and this situation could last forever. He mentioned that the concessionaire is an offshore company without assets, and the state would not be able to compensate for the environmental damage caused by the mining activities.

Popović stated that Brskovo Mine is not an offshore company but a limited liability company registered in Montenegro. He also mentioned that its owner, the offshore company Tara Resources, cannot be held responsible for the operations of its company. Popović further stated that they currently have a bank guarantee of half a million euros for the ongoing works, and it will increase when ore exploitation begins.

Rajković argued that the mining exploitation phase will not be reached. He also claimed that this concessionaire’s company is not a mining company but a lobbying one, whose goal was to obtain permits for ore exploitation from the previous government and then sell them.

Former Minister of Capital Investments Ervin Ibrahimović wanted to give blank support to this concessionaire,” Rajković stated.

The meeting concluded with a brief statement from the director of the Environmental Protection Agency, Milan Gazdić, who mentioned that the area of a potential future mine is in close proximity to two protected areas, the Biogradska Gora National Park and the Tara River, and that the Agency has not received any requests from the concessionaire for approvals.

The President of the Working Group, Vesna Brajović, stated that ecology will be the topic of the next meeting scheduled for Monday.

The members of the working group include representatives from various government departments, the Municipal Assembly of Mojkovac, the Environmental Protection Agency, the Institute of Public Health, non-governmental environmental organizations, and the concessionaire.

The working group has commenced its work and will continue for the next 30 days, holding meetings every Monday and Friday.

At the end of its work, the working group will adopt a recommendation to the government on this issue by a majority vote.

Mujović: There will be no winners or losers

The session was opened by Minister Mujović, stating that the Brskovo mine is an important national issue, and discussions about it should take place in public sessions. He also mentioned that the upcoming meetings of the working group will be open to the public.

No more imposed unanimity. Decisions will no longer be made behind closed doors, said Mujović.

He stated that this issue shapes the fate of Mojkovac and the north in economic and demographic terms, and regardless of the final decision, there will be no winners or losers.

The Minister mentioned that in cases like this, the non-governmental sector and the media serve as corrective factors.

 

Source: Montenegro Business

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