Author(s):Several

Overview

1. What are the recent developments in the exploration and extraction of mineral resources in the United Arab Emirates?

Response Response : Mineral resources in the United Arab Emirates (the UAE ) are separated into three essential classifications: rocks; sands and soil; and metals. The exploration and exploitation of minerals are only confined to rocks and sands. Whereby, rocks are utilized for construction whereas, limestone, sand, marl, gypsum are utilized to manufacture cement. : Mineral resources in the United Arab Emirates (the) are separated into three essential classifications: rocks; sands and soil; and metals. The exploration and exploitation of minerals are only confined to rocks and sands. Whereby, rocks are utilized for construction whereas, limestone, sand, marl, gypsum are utilized to manufacture cement.

The mining sector in UAE has turned out to be a standout amongst the most promising production sectors such as oil fields. It isn’t surprising that in coming future minerals of the UAE will pull potential investors around the globe.

UAE has a long list of minerals ranging from copper mines, gypsum to the extraction of metals and valuable stones. The main minerals that are explored and extracted in the country are:

Raw steel.

dead-burned dolomite; and

quicklime and hydrated lime;

hydraulic Cement;

gypsum;

chromite;

ammonia;

Aluminium; The Emirate of Fujaira h is bestowed with minerals and the mining business or related ventures are major wellsprings of income and are the spine of Fujairah economy. In 2014 the total production of minerals in the emirate was about 102 million Mt. tons. Out of which 80% was used in the country and rest 20% was exported to the neighboring countries such as India, Bahrain, Qatar, and Kuwait. Organizations around the globe have effectively invested in the mining sector in UAE. Generally, Indian companies mainly invest in the exploration and exploitation of chrome and precious metals. Further, Dubai Gold center a company incorporated in Dubai Multi Commodity Centre (the DMCC ) has traded more than US$70 billion of gold in 2013-14, which is almost twice the amount traded in 2011-12. Dubai Diamond Exchange (the DDE ), a subsidiary of DMCC and a leading diamond trader worldwide. In 2016, DDE imported $12.4 billion worth rough diamonds and $13.2 billion was re-exported. In 2006, DDE was made the sole gateway for imports and exports polished diamonds in the UAE. Aluminium smelting is increasing in UAE with prospects of building up the world’s biggest aluminum smelter in Abu Dhabi and Dubai. But the core of the UAE’s aluminum ventures remains solely inside its own borders. Emirates Global Aluminium PJSC is the major producers of aluminum in the country. It is an aluminum conglomerate with interests in alumina/bauxite and essential aluminum smelting. The company has produced 2.5 million tonnes of hot metal in 2015. However, the most noteworthy investment is based on a Joint Development Agreement (the JDA ) between Mubadala, owned by Abu Dhabi Government and DubaL with a capacity of 1.2 million tonnes a year. In 2014, Ministry of Energy participated in the Middle East and North Africa (the MENA ) mining conference, one of the largest conference in the Middle East and North Africa. The conference aimed at emphasizing the importance of mining sector in economic development and effective ways to provide sufficient investment climate in lieu of supporting the exploitation and exploration of mineral resources in the Middle East and North Africa. On 12th April 2017, Fujairah Natural Resources Corporation representing UAE participated in the 23rd meeting of Advisory Committee of Mineral resources Sector at Arab Industrial Development and Mining Organization (the AIDMO ). During the session, the participants discussed the arrangements for 5th International forum for industrial rocks and mining, organizational activities os Mineral Resources Department as a part of 14th International Arab Mineral Resources Conference held at Saudi Arabia. The participants further discussed the 15th International Arab Mineral Resources Conference to held in 2018. 2. What is the regulatory framework for the exploration and extraction of mineral resources in UAE? Response : Regulatory Framework for Mining Industry in UAE UAE federal mining law is still in the planning phase. His Highness Sheikh Mohammad Al Maktoum has confirmed that the law will regulate the exploitation and exploration of minerals and the investments around the globe in the mineral industry. However, companies incorporated in free zones are regulated by the laws and regulations promulgated by the free zone authority. For example, DMCC has framed DMCC rules for Risk-Based Due Diligence in the Gold and Precious metals supply chain ( DMCC rules for RBD-GPM ). Regulatory authorities Pursuant to Article 23 of the UAE Federal Constitution, the natural resources and wealth in each emirate are considered as a public property of the Emirate and the society should be responsible for the protection and proper exploitation of such natural resources and wealth. The ministry mainly focuses on sustainable development in petroleum and mineral resources. The Ministry was formed pursuant to Federal Decree Number 3 of 2004 (the Ministry of Energy Decree) by a merger between Ministry of Petroleum and Mineral Resources and Ministry of Electricity and Water (the FEWA ) However, at emirates level, DMCC authority being the control authority regulates the companies incorporated in DMCC and undertaking non-financial activities which include specifically jewelry, precious metals, stones, and traders. In the Emirate of Fujairah, Fujairah National Corporation Resources (the FNRC ) was established in 2009 in the emirate of Fujairah. The corporation is concerned with the policies with regards to natural resources in accordance with the requirements set out in Economic and Social Development Programs. FNRC is also concerned with national and international investments in the mining sector. 3. How are rights to the mineral resources held, and who holds those rights? Are they held by the property holder? Are mineral rights severable from the general ownership of the property? Must they be registered? Also, clarify what proportion of interests is privately owned and state-owned?

Response : The rights of mineral resources are held by the UAE government which can exploit them or assign their exploitation to third parties, subject to prior approval. Consequently, exploitation of such resources requires permits from UAE Ministry of Energy or other relevant ministries prior to exploration.

4. What are the key features of the leases, licenses or concessions that are issued under the regulatory regime? Can these rights be leased by the right-holder?

Response :

Lease/Licence/Concession Term - Is there a time limit on the permissible length of these rights? How long is a typical lease, license or concession period? How can the period be extended?

The concession agreements for exploration of minerals are private arrangements between parties and the UAE government thus, are not shared with or disclosed in the public domain.

Fees

The parties agreeing to commercial terms mentioned in the concession agreement pay a license fee or sharing bonus. Additionally, the host government also seek royalties depending upon the gross revenue generated from net income, both of which are based on the amount of production and price of goods sold.

Liability

Concession holder will be held liable if there is any deviation from what is mentioned in the concession agreement. Companies must strictly adhere to the concession terms and apart from that must adhere to the following: