Our Corporate Structuring lawyers at Al Tamimi & Company discuss Attractive Investment: Mining Sector and its Regulation in Fujairah and provide updates on
Ali Bachrouch Partner, Head of Corporate Structuring - Northern Emirates
Hussam Helal Associate, Corporate Structuring
Sara Omer Ali Associate, Litigation
The importance of investing in the rock and mineral sectors lies in the fact that many industries rely on the wealth of the minerals. This generally includes ores and minerals that are found on the surface of the earth or in its interior, which are then extracted from quarries and mines through various extraction and mining operations.
The mineral wealth of any country is an important branch of its national economy therefore; it strives to draw the attention of investors and companies that specialise in the metallurgical industries in order to invest in this field.
The location of the Emirate of Fujairah is considered one of the locations that is rich in natural wealth and mineral resources, especially its mountains that are full of rocks that contain precious minerals of important economic value. The Emirate of Fujairah is a hub for scientific research and advanced academic studies. This makes it a direct target for investors and companies specialized in investing in the activities of the mining industries and those investing in activities related to crushers, quarries and the cement industry. This is specifically considering the Emirate of Fujairah has huge reserves of mineral wealth, which in itself constitutes a cornerstone for future investments and projects in this sector.
The government of Fujairah is fully aware of the natural wealth and rich resources that the Emirate enjoys; consequently, it accelerated to issue Local Law No. (1) of 2009 regarding the establishment of the Fujairah Natural Resources Corporation (FNRC). This law is concerned with establishing the Fujairah Natural Resource Corporation in order to organizing this field with purpose to developing those natural resources to ensure that they are in accordance with the requirements of sustainable economic development programs. The aforementioned law has defined the objectives of this institution, its main tasks and basic powers, which is mainly focused on conducting specialized scientific studies and research and various geological surveys in order to develop the rocks and minerals sectors through the exploitation of natural resources. In addition to the role of the institution, the law regulates works related to licenses, rights, agreements and concessions related to rocks and minerals in order to facilitate the procedures for establishing the necessary projects.
As a result of the Government of Fujairah’s interest in this vital sector and the legal legislation regulating these activities that was issued for the purpose of increase investment in these natural resources, this led to the increase in the number of establishments operating in this field by double in the past ten years.”
As a result of the Government of Fujairah’s interest in this vital sector and the legal legislation regulating these activities that was issued for the purpose of increase investment in these natural resources, this led to the increase in the number of establishments operating in this field by double in the past ten years. The number of those establishments that are actively operating in crushers and cement factories and other establishments operating in this field has reached (60) establishments. The number of establishments operating in this field outnumber the amount of establishments in the other Emirates significantly.
Meanwhile, the Sixteenth Arab International Conference on Mineral Resources was held in the Emirate of Fujairah on 22 February, 2022 under the generous patronage of the late H.H. Sheikh Khalifa bin Zayed Al Nahyan. This conference was attended by Arab ministers, major investors and experts concerned with mineral wealth affairs, under the slogan “Mineral Resources - Bedrock at the Foundation for National Development”.
We had the honour to attend the conference which discussed the most important challenges facing this sector, the appropriate solutions for its development. Moreover, it referred to the laws, regulations and procedures regulating the issuance of licenses that are concerned with the practice of mining activities and the advantages that the Emirate of Fujairah provides to investors in this regard.
Crushers and cement factories are licensed in the country in accordance with the provisions of Federal Law No. 24 of 1999 Concerning the Protection and Development of the Environment (along with its executive regulations). Additionally, the provisions of Cabinet Resolution No. 20 of 2008 regulating the Activities of Crushing Plants and Quarries and the Transport of their Products and Cabinet Resolution No. 24 of 2011 regulating the Activities of the Organizations operating in Cement Industry field.
The licensing applications are to be submitted to the relevant local authority (Municipality of Fujairah), accompanied with an environmental impact study in order to obtain an environmental permit. This is in accordance with the Environmental Impact Assessment System for Establishments as issued in Cabinet Resolution No. 37 of 2001 Concerning the Executive Regulations of the Federal Law No. 24 of 1999 Concerning the Protection and Development of the Environment.
The blasting operations are carried out under the full supervision of the Ministry of Interior in coordination with the competent local authority after obtaining prior permits from the competent local authority and the Ministry of Interior.
The Ministry of Climate Change and Environment issues an environmental compliance certificate for facilities operating in the field of crushers and quarries when issuing/renewing licenses after ensuring compliance with the implementation of the legislation regulating this type of industries.
The local authority carries out daily supervision and inspection work on crushers, quarries and cement factories and apprehends the violators.
The Ministry of Climate Change and Environment works to implement scheduled and sudden field visits to crushers and cement factories, at any time whether in the morning, evening and night throughout the year in order to confirm its commitment to implementing the requirements and standards required in the decisions regulating its work. It takes the necessary measures if it monitors any violations related to pollution that affects the public health of the residents of the areas near these facilities or the environment and natural resources.
The most important services that the Fujairah Natural Resources Corporation provides to investors in the mining sector are:
Issuing maps of the proposed sites for exploitation and investment in mining.
Issuance of maps of the exploited sites.
Receiving requests for permits for exploitation and exploration.
Issuance of a survey permit.
Issuance of a permit for exploitation and exploration.
Issuance of a permit to use the yards
Provides quarry exploitation permits.
No-objection permit to export materials.
A no-objection permit for the acquisition of explosives in cooperation with the Police Department.
A no-objection permit for the bombing in cooperation with the Police Department.
Permit to transport internal materials.
Permit to transfer secondary materials.
Issuance of identification cards for the scale system (for transport companies).
The mining sector attracts major investments; and the development of the legislative framework in Fujairah is very apparent, in addition to the investment opportunities, and the presence of a large number of licensed companies in this field. The Fujairah Natural Resources Corporation is the body responsible for regulating licenses, rights, agreements and concessions related to rocks and minerals, and it is the competent authority in regulating the exploitation of natural resources. FNRC has effectively started using modern technology to create databases that facilitate communication with those dealing with it. This contributes in supporting decision-making process and setting plans for investment in mining and other industries specialised in this field in Fujairah. Moreover, it supports the existing partnership principle between the FNRC and those establishments, which considered a new additional step in promoting the process of sustainable investment in the field of the mining industries.
For further information, please contact Ali Bachrouch or Husam Helal or Sara Omer Ali.
Published in September 2022
