All that’s missing is the President’s signature for the new geological and mining law to come into force in Poland.

The new law will make administrative proceedings more effective, introduce modern regulations, simplify procedures for entrepreneurs, and fully implement directive 94/22/EC on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons. Some provisions of the new law are significant in relation to mining deposits of shale gas in Poland, estimated as the largest in Europe1.

The law introduces new regulations both with respect to administrative and of civil law. Tender proceedings will now have to be conducted when granting permits for the prospection, exploration and production of hydrocarbons. This will remove any doubts as to whether Polish law is in conformity with directive 94/22/EC.

Moreover, the new regulations restrict the number of people having the status of a party in proceedings for the granting of permits under the geological and mining law. If there are more than 20 parties, the authority will no longer have to inform each personally about its decisions. This should accelerate the proceedings.

It also simplifies the mining of minerals that are not of strategic importance, shortens the term during which authorities are obliged to decide on projects and sets a two-year term to introduce areas with mineral deposits into the local zoning plans.

The new law will strike a balance between the interests of entrepreneurs and of real estate owners by specifying the rights of each. Entrepreneurs who have obtained permits for the production of hydrocarbons (such as shale gas), anthracite, lignite or underground non-reservoir storage of hydrocarbons have been granted new rights. Under the new law these entrepreneurs may request the buyout of real estate or its part that is in the mining area, in the scope indispensible for carrying out the planned activity. On the other hand, the term during which claims can be made in relation to damages caused by mining enterprises has been extended to five years from the day on which the damage was discovered.

The new geological and mining law introduces a new model in relation to the ownership of minerals, which according to the government is less opaque than the current model. It also more clearly defines the division between the property of the State Treasury and private owners with respect to mineral deposits located on privately owned real estate. At the same time, the new law does not change anything in relation to title to strategic minerals such as shale gas, which still remains with the State Treasury.

The new geological and mining law should come into force on 1 January 2012