COMMENTARY TO ARTICLE 13. TECHNOGENIC MINERAL FORMATIONS, RIGHTS TO TECHNOGENIC MINERAL FORMATIONS TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSOIL AND SUBSOIL USE"

Home / RLA / COMMENTARY TO ARTICLE 13. TECHNOGENIC MINERAL FORMATIONS, RIGHTS TO TECHNOGENIC MINERAL FORMATIONS TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSOIL AND SUBSOIL USE"

1. Accumulations of waste from mining, mining processing and energy industries containing useful components and (or) minerals are recognized as technogenic mineral formations.

Man-made mineral formations of mining industries include waste from the extraction of solid minerals, formed as a result of the separation of solid minerals from the rock mass during their extraction from the subsoil (overburden, host rock, dust, poor (substandard) ore).

Man-made mineral formations of mining and processing industries include processing waste generated as a result of mining and processing industries (tailings and processing sludge) and (or) chemical and metallurgical industries (slags, cakes, clinkers and other similar types of waste from metallurgical processing).

Technogenic mineral formations of energy production include solid waste generated as a result of fuel combustion during the production of electric and (or) thermal energy by generating plants (ash and ash slag).

2. Man-made mineral formations located within a subsurface area belong to such a site.

Man-made mineral formations that have arisen as a result of the activities of chemical, metallurgical or energy industries located outside the area of the subsurface in use are the property of these industries. Ownership of such man-made mineral formations remains with the owner of the production facilities until the closure of the landfill (part of the landfill) for the placement of these man-made mineral formations in accordance with the environmental legislation of the Republic of Kazakhstan.

3. The ownership right to man-made mineral formations that have arisen as a result of the activities of a subsurface user in a subsurface area used by this subsurface user remains with him for the duration of the subsurface use right.

Subsurface users who own man-made mineral formations have the right, subject to the provisions of this article, to own, use and dispose of man-made mineral formations that have arisen as a result of activities on the subsoil plot provided to them for use, as well as to alienate them to third parties.

The alienation of these man-made mineral formations to third parties without removal from the subsurface area or the landfill of their placement is not allowed, except in cases of transfer of the right of subsurface use or, accordingly, ownership of the production provided for in paragraph 2 of this Article.

In the case of alienation to third parties of man-made mineral formations located on a subsurface area in use, their withdrawal must be carried out during the period of validity of the right of subsurface use.

4. The placement of man-made mineral formations of mining industries is carried out only within the boundaries of subsurface areas that are in use under a license for exploration of solid minerals, a license for the extraction of solid minerals, a license for the extraction of common minerals or a license for the use of subsurface space.

The placement of man-made mineral formations of mining and processing plants is carried out only within the boundaries of subsurface areas that are in use under a license for the extraction of solid minerals or a license for the use of subsurface space.

In order to ensure the efficient use of the resource potential of man-made mineral formations, their placement at the same facility as a result of the activities of different industries (mining, mining and processing, chemical and metallurgical industries) is prohibited if such man-made mineral formations do not have homogeneous physico-chemical properties and such placement does not comply with the requirements of the environmental legislation of the Republic of Kazakhstan.

5. Man-made mineral formations left in the subsurface area after the termination of the right of subsurface use or, accordingly, after the closure of the landfill (part of the landfill), are included in the subsurface.

For the purposes of this Code, the legal regime of solid minerals is applied to man-made mineral formations included in the subsurface.

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(Odilov T.A.)

1. The commented article reveals the concept of TMO as a resource of the subsoil, provides their classification, establishes the legal status, as well as some features of their property turnover.

In the legislation of the Republic of Kazakhstan, the concept of TMOS was first mentioned in the 1992 Code on Subsoil and Processing of Mineral Raw Materials as man-made formations or man-made mineral resources (the concepts were used equivalently). In the 1992 Code on Subsoil and Processing of Mineral Raw Materials, the legislator did not single out TMO as a separate object of legal relations in the field of subsoil use. In accordance with paragraph 3 of Article 43 of the 1992 Code on Subsoil and Processing of Mineral Raw Materials. The same provisions on geological exploration and mining were applied to TMOS, which are typical for natural deposits.

However, in this case we are talking exclusively about TMOS owned by the state. This conclusion follows from the content of other provisions of the 1992 Code on Subsoil and Processing of Mineral Raw Materials, in particular Articles 5 and 7, the meaning of which is that TMOS together with mineral deposits form the state fund of the subsoil (used and unused parts of the subsoil), which is exclusive (the word "exclusive" was provided for only in the 1992 Code on Mineral Resources and Processing) state property.

With the adoption of the Subsoil Code, the application to state-owned TMOS of the legal regime for regulating subsurface use operations provided for by TPI was again directly reflected in Part 2, paragraph 5 of the commented article. In essence, the logic is based on the fact that the state considers the accumulation of TMOS belonging to it in the same way as

accumulations of minerals that, by definition, also belong to the state.

2. The legislative regulation of the issue of distinguishing and classifying TMOS as state or private property has undergone significant changes in all four main legislative acts in the field of subsurface use, including the commented Code on Subsurface Resources.

With the adoption of the 1992 Code on Subsoil and Processing of Mineral Raw Materials, the legislator established state ownership of TMOS (man-made mineral resources/formations: products of tailings and sludge storage facilities, substandard ores and rocks in landfills, etc.), which arose by the day of the entry into force of the said Code (paragraph 4 of art. 43). It is important to note that, based on the meaning of this rule, state ownership of such TMOS was established regardless of the availability of a passport or records of them in the system of state accounting of the state of the subsoil. Such an unambiguous distinction is explained by the historical conditions under which this norm was introduced – before the independence of the Republic of Kazakhstan and the adoption of the 1992 Code on Mineral Resources and Processing, all mining enterprises on its territory belonged to the state. It also follows from the meaning of the norm that, due to the emergence of private ownership of mining and processing industries, TMOS formed since the entry into force of the 1992 Code on Subsoil and Processing of Mineral Raw Materials could now be privately owned.

With the adoption of the Decree on Mineral Resources of 1996 in Article 72, the legislator did not exclude the emergence of state ownership of TMOS from May 30, 1992 (this date, however, is not the date of the entry into force of the 1992 Code on Mineral Resources and Processing of Mineral Raw Materials), but only as a result of the inclusion of TMOS in the state fund of mineral resources before the entry into force of by virtue of the Decree on the Subsoil of 1996, i.e. until January 29, 1996: "Technogenic mineral formations deposited before May 30, 1992 or included in the State fund of mineral resources before the entry into force of this Decree are state property."

One can only guess about the historical prerequisites for the need for an additional period (from May 30, 1992 to January 29, 1996) for the emergence of state ownership of TMO at that time. Presumably, in the period after the entry into force of the 1992 Code on Subsoil and Processing of Mineral Raw Materials and before the entry into force of the 1996 Decree on Subsoil, they still remained unprivatized and in force

State-owned enterprises that formed TMOS, which were subsequently included in the state fund of mineral resources as state property until the moment of privatization of such enterprises.

With the adoption of the 2010 Law on Mineral Resources, the time limit on the emergence of state ownership of TMOS by including them after May 30, 1992 in the State fund of Mineral Resources in accordance with paragraph 4 of Article 10 was lifted: "Technogenic mineral formations deposited before May 30, 1992 or included in the state fund of mineral resources are state property.". Presumably, this measure is related to the need to include (designate) TMOS in the state fund of mineral resources as state property, which were abandoned by subsurface users after January 29, 1996, for further involvement in subsurface use.

At the same time, in accordance with the Law of the Republic of Kazakhstan dated December 29, 2014 No. 271-V SAM "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on subsoil use", paragraph 3 of Article 10 of the 2010 Law on Subsoil, which establishes state ownership of TMO, has undergone an additional revision. In addition to the provisions already in force, the wording of the paragraph was supplemented with a provision on the establishment of state ownership of "minerals contained in man-made mineral formations deposited after May 30, 1992, to the extent that no mining tax and (or) royalties have been paid." This addition is related to the claims of the tax authorities to exclude the avoidance of payment of mineral extraction tax or royalties on minerals remaining in the TMO after extraction of mineral extraction from the subsurface or processing by subsurface users. It is important to emphasize that minerals also include useful components (at that time, the legislator had not yet established a clear correlation between these concepts), given that, according to the definition of TMO provided at that time, they contain precisely useful components. In addition, some types of TMOS cannot contain minerals in principle (for example, metallurgical slags and some types of enrichment tailings), since they are wastes of deep physico-chemical basement (see the commentary to art. 12 of the Subsoil Code).

Thus, by the time the Subsoil Code was put into effect, State ownership was legally established.:

1) for TMOS formed before May 30, 1992.;

2) formed after May 30, 1992 and included in the state fund of mineral resources (as state);

3) for minerals (including useful components) contained in TMO, for which no mineral extraction tax and/or royalties have been paid by subsurface users during extraction of minerals from the subsurface or during processing (see paragraphs 12 and 13 below).

In the second case, it is necessary to clarify that, except in the context of TMO, none of their three legislative acts in the field of subsoil use (the 1992 Code on Subsoil, the 1996 and 2010 Laws on Subsoil) no longer used the concept of "state fund of mineral resources". The most appropriate concept in terms of meaning and widely used in all three legislative acts, reflecting the totality of well-known mineral resource accumulations related to the subsurface, is the "state subsurface fund", in order to take into account the condition of which, among other things, the cadastre (objects) of TMO is maintained. Therefore, in the context of the second case, the phrase "... included in the state fund of mineral resources" is more logically interpreted in the meaning of "... included in the state fund of mineral resources" or even "... included in the cadastre of man-made mineral formations."

The inventory of TMO is a systematic set of information about TMO facilities (storage facilities and landfills), which, as noted, may be privately and publicly owned. By itself, the inclusion of TMOS in the cadastre (in the state subsoil fund) has only an accounting value, therefore, in the context of the case being commented on, appropriate entries should have been made to indicate that TMOS belong to state ownership when they were included in the cadastre (in the state subsoil fund). These records are important especially in determining the volume of private and public TMO located (stored) at the same facility (dump, storage) or territory.

Comparing the first and second cases of establishing state ownership of TMO, it is important to note that for the first case, the establishment of state ownership of TMO did not involve any actions and was carried out on the basis of a direct legislative norm. Whereas the second case involved making appropriate entries in the state subsoil fund (inventory of TMO), directly establishing and designating certain TMO as an object of state ownership.

The third case raises the greatest number of questions from the point of view of further practical implementation by the state of its property rights, since, based on the meaning of the norm, it assumes a certain amount of state-owned minerals and mineral components contained in the array (location) of TMO, which are privately owned. It is impossible to distinguish and differentiate the volume of private and public TMO in kind. In this case, we were talking about the conditional share of minerals and useful components in the array of the located TMO facility.

3. In the Subsoil Code, the legislator did not re-provide for the norms establishing state ownership of TMOS that arose before the introduction of the Subsoil Code, since this was done in previously existing legislative acts in the field of subsoil use.

On the contrary, in order to potentially extract useful properties from TMO as a man-made deposit within the framework of the unified legal institution for the use of mineral resources (along with mineral deposits), the legislator applied a different approach, excluding any additional procedures for establishing state ownership of TMO, involving the actions of a government agency and making an entry on the inclusion of TMO in the state subsoil fund (part of the subsurface). The new approach also eliminates the risks associated with non-fulfillment of obligations to eliminate the consequences of subsurface use in relation to TMOS due to their ownership by right of private ownership.

So, earlier, before the adoption of the Subsoil Code, there was an opinion about the inexpediency of carrying out liquidation work on the formed TMO, for example, in case of early termination of the right of subsurface use of the contract for exploration and (or) extraction of TPI due to the potential usefulness of TMO in the future. However, the global practice of handling TMOS shows that in order to ensure the safety of the environment and the public, liquidation work on TMOS must begin immediately after the termination of the right of subsurface use, since it is impossible to predict when the formed TMOS will again arouse commercial interest and will be used for the purpose of seizing minerals or useful components. In addition, the subsequent removal of TMOS covered with a reclamation layer, according to generally accepted world practice, is technically feasible, without causing any difficulties or loss of quality or volume of TMOS.

The essence of the new legislative approach is that TMOS formed during subsurface use operations, while being privately owned by the subsurface user, upon termination of the right to use a subsurface area, are considered transferred (included) into the subsurface, and therefore transferred to state ownership, since the subsurface is owned by the state. Being part of the subsurface, such TMOS in accordance with subclause 2 of clause 2 of art. 10 of the Subsurface Code are considered as a subsurface resource on an equal basis with minerals, the study (exploration) and extraction (extraction) of which in the future, in accordance with Part 2, paragraph 5 of the commented article, is carried out in the same manner and regime that is provided for TPI. The new approach is borrowed from Western Australian and Chilean mining laws.

The envisaged legal structure for the transfer of TMO to the subsurface and, accordingly, to the ownership of the state is objective and does not depend on the subjective assessment of both government agencies and the person who has lost the right to subsurface use. Such a transfer is provided for in Part 1, paragraph 5 of the commented article, according to which the abandonment of TMO on a subsurface area that has ceased to exist (legally), as well as the burial of TMO on a landfill located outside the subsurface area, entails the termination of ownership (additional basis according to paragraph 1 of art. 249 of the Civil Code of the Republic of Kazakhstan), although it is very similar to the legal institution of renunciation of property rights in art. 250 of the Civil Code of the Republic of Kazakhstan.

The transfer of TMO to state ownership does not exclude, however, the fulfillment of public-law obligations to keep records of TMO and liquidation measures.

4. TMOS should be considered a legally established special status of industrial wastes with significant resource potential and involved in production or use in a manner similar to that of solid minerals, including common ones. Nevertheless, being industrial waste, TMO management operations are also regulated by the environmental legislation of the Republic of Kazakhstan.

To designate industrial waste as a TMO, a special passport is issued – a document that specifies the characteristics of these wastes (volume, content, method of disposal, etc.), the type and parameters of the disposal facility (dump, storage), waste generator, location of the facility, and other features. TMO passports are subject to submission to the authorized body for the study of mineral resources in accordance with the procedure provided for

by-law NPA. The TMO passport is the main source of information for the registration of TMO in the unified cadastre of the state subsoil fund.

5. The regulation of relations related to TMO has been allocated by the legislator to a separate institution of legislation on subsoil and subsurface use due to the content of useful components and (or) minerals in such formations, thereby carrying resource potential. Updated definition of TMO in paragraph 1 of the commented article indicates that, depending on economic and environmental factors, the type and origin of TMOS, their resource value may be due to the presence of either minerals, or useful components, or both, once again distinguishing these two concepts from each other according to paragraph 1 of Article 13: "... accumulations waste from mining, mining processing and energy industries containing useful components and (or) minerals." For example, an overburden is an array of rock, which, in addition to inclusions of TPI ores, soil and other mixtures, usually contains OPI. Whereas, for example, tailings (TMOS of mining and processing production) contain small amounts of mineral particles containing useful components, and rock particles (of different sizes) - to an overwhelming extent. This is due to the technical and (or) economic impossibility of fully separating the useful component contained in the ore from the rest of its empty (non-useful) part or rock (waste). In turn, there are no minerals in the chemical and metallurgical processing facilities. However, even such TMOS can contain useful components in the form of metals or their compounds in very small quantities (depending on the perfection of the technology), but in a different structure (formula) as a result of physico-chemical processes. In this case, the useful components contained in TMOS cannot be called natural, i.e. they arose as a result of natural (natural) processes.

The quantitative, mining and qualitative characteristics of TMOS, which allow the use of TMOS as the technology of their processing develops and economic conditions change, as well as the accumulation of minerals in their natural form, determine the presence of a deposit, albeit man-made.

6. The definition of the concept of TMO given in paragraph 1 of the commented article, in its meaning, incorporated the definition of the concept of TMO, previously provided for by the 2010 Law on Subsoil (paragraphs 107 of art. 1). The current definition of TMO is based on the classification of industries that are sources of

TMO entities: 1) mining production; 2) mining and processing production; 3) energy production. However, further in Parts 2, 3 and 4 of the same paragraph of the commented article, the legislator provides a specific list of types of waste related to TMO, based on the educational industries. This is a detailed legal construction of the definition of TMO (collectively, the entire clause 1 of the commented article) is intentionally provided in order to ensure in other paragraphs of the commented article the possibility of applying a differentiated regulatory approach to TMOS, depending on the specifics of their production and their direct connection with subsurface use operations.

With regard to mining, the legislator restricts the types of TMOS to a specific list, which includes overburden, host rock, dust, and poor (substandard) ore. Mining and processing production, in turn, involves the division of TMOS into the following subgroups: 1) formed as a result of the activities of mining and processing industries, which include tailings and processing sludge; 2) formed as a result of the activities of chemical and metallurgical industries (slags, cakes, clinkers, etc.). It should be noted that the closed list of TMOS is typical for mining and processing, while chemical and metallurgical production is not limited to the above-mentioned types of TMOS and suggests that other types of such formations may form as a result of metallurgical conversion (open list).

The list of TMO formed as a result of fuel combustion during the production of electric and (or) thermal energy is exhaustive. These include only ash and ash slags. The classification of waste from energy production as TMO is unconventional in comparison with waste generated during the production of products (ore, concentrate, metal) related to subsurface resources. The legislator's decision to classify ash and ash slags as TMOS is explained by the similarity of the methods of disposal, resource potential and further extraction with similar features of waste from mining and mining processing industries, traditionally recognized as TMOS.

7. Paragraph 2 of the commented article recognizes TMOS located within a subsurface area as belonging to such a site. This rule assumes the following: 1) the presence of a designated subsurface area as an object of the right of subsurface use and an object of relations between the state and the subsurface user; 2) the allocated subsurface area is provided for operations for exploration or production of mineral resources, OPI or prospecting (because

the rule on ownership of TMOS is applicable only for such operations in which such TMOS can be formed); 3) ownership is represented by TMOS that are located within such a site and that are not in state ownership (since state-owned TMOS constitute the content of the subsurface area itself as a resource). Thus, TMOS belong to a subsurface area as long as the subsurface area legally exists.

It is necessary to consider the rules of ownership of TMO to a subsurface area through the prism of the provisions of parts 1 and 2 of paragraphs 4 of the commented article, which determine the placement of TMO on subsurface areas. In accordance with these provisions, the "relationship" of the subsurface area and the TMO is established only: 1) between the TMO of mining industries (overburden, host rock, dust and poor (substandard) ore), on the one hand, and the site of exploration or extraction of TPI, extraction of OPI or the site of use of subsurface space (for the purposes of paragraphs 4 art. 249), on the other hand (that is, areas where operations usually result in these types of TMO); 2) between the TMO of mining and processing plants (tailings and processing sludge) and the TPI extraction site or the subsurface use area (for the purposes of paragraph 4 of art. 249). These features are also reflected in the provisions of the Special Part of the Subsoil Code.

The rules for the ownership of a TMO to a subsurface area are similar to the rules for the ownership of the main thing provided for in art. 122 of the Civil Code of the Republic of Kazakhstan. The difference is that the legislator defines a subsurface area instead of the main thing. It follows from the rule that as long as the TMOS of the subsurface user are located within the subsurface area, they follow the fate of the subsurface area. When the right to use a subsurface area (subsurface use rights) is transferred to a new user of the site (subsurface user), ownership of the TMO located on this subsurface area is transferred. Upon termination of the right to use a subsurface area (termination of the existence of a subsurface area), ownership rights to TMO located on the subsurface area also cease (see paragraph 2 above).

There is no reservation about the possibility of a subsurface user to alienate TMO separately from the right to use the site (the right of subsurface use), while leaving them located on this subsurface area, and it is prohibited. This prohibition follows from Part 3, paragraph 3 of the commented article, which provides for the mandatory withdrawal of TMO from the (territory of) a subsurface area when they are alienated to a third party who does not simultaneously acquire these

TMO and the right to use this subsurface area. Therefore, transactions made in violation of this rule, in accordance with paragraph 1 of Article 158 of the Civil Code of the Republic of Kazakhstan, are contested and may be declared invalid by a court. Such a claim, for example, may be filed against the new owner of TMO located within the boundaries of a subsurface area that has ceased to exist, by interested government agencies or by the person responsible for fulfilling the obligation to liquidate these TMO (as a rule, reclamation of the surface of TMO facilities and possibly other measures).

Thus, in aggregate, Parts 1, paragraphs 2, parts 1 and 3, paragraphs 3 of the commented article form a rule according to which TMO, being an affiliation of a subsurface area, located within its limits, must always belong to the person who is the user of this site (subsurface user) and who, upon termination of the right of use (subsurface use) the subsurface area is obliged to eliminate the consequences of the operations performed. The described legal structure is intended to avoid a situation in which the interests of the owner of the TMO conflict with the obligation of another person (who is a subsurface user) to eliminate the consequences of subsurface use operations upon termination of the right of subsurface use.

8. In addition to the ownership of TMO to a subsurface area, paragraph 2 of the commented article also defines as belonging TMO formed as a result of chemical, metallurgical and energy industries and placed on landfills outside the subsurface areas. Similarly to the rule that TMOS of mining and processing industries belong to a subsurface area, TMOS of chemical, metallurgical and energy industries, being located at a landfill outside the subsurface area, are recognized as belonging to the industries that formed them. When the landfill is completely closed or in its closed part, in accordance with Part 1, paragraph 5 of the commented article, these TMOS are considered to be included in the subsurface as their resource, thereby becoming state property.

The rules for the ownership of such TMOS to the industries that formed them are similar to the rules for the ownership of the main thing provided for in art. 122 of the Civil Code of the Republic of Kazakhstan. However, instead of the main thing, the legislator defines the production-educator of TMO. It follows from the rule that as long as TMOS are located at the landfill of chemical, metallurgical or energy production, the originator of such TMOS, they follow the fate of this production. During the transition

ownership rights to the TMO located at this landfill are transferred to the new owner.

The possibility of alienating TMO of chemical, metallurgical and energy industries without removing the educational production from the landfill separately from such production is absent and prohibited. This prohibition follows from part 3, paragraph 3 of the commented article. Therefore, transactions made in violation of this rule, in accordance with paragraph 1 of Article 158 of the Civil Code of the Republic of Kazakhstan, are contested and may be declared invalid by a court. Such a claim, for example, may be filed against the new owner of the TMO by interested government agencies or by the person responsible for the closure of the landfill and reclamation in relation to these TMO.

As in the case of TMO belonging to a subsurface area, in aggregate, Parts 2, paragraph 2 and Part 3, paragraph 3 of the commented article form the rule according to which TMO of chemical, metallurgical and energy industries, being their affiliation, located on the landfills of these industries, must always belong to the owner of the manufacturing facilities of such TMO, which, when closed The landfill must be recultivated on top of the TMO data. Such a legal structure is provided in order to avoid a situation in which the interests of the new owner of TMO of chemical, metallurgical and energy industries will be opposed to the responsibilities of the landfill owner and the educational production to close the landfill and reclaim on top of the TMO.

9. Landfill is a concept used in environmental legislation and means "a specially equipped place for permanent disposal of waste without the intention of its removal ...". "Without the intention of removing them" means that the owner of the landfill, when placing TMO at the landfill, at that moment does not have a specific idea and plan for the reverse removal and use of TMO.

It should be noted that the locations of TMO mining and processing plants in accordance with the environmental legislation of the Republic of Kazakhstan also have the status of landfills, which, however, according to Part 1 of paragraph 4 of the commented article should be located only within the subsoil area.

In turn, TMOS of chemical, metallurgical and energy industries, as usual, are not located in subsurface areas. Therefore, in a legal structure that ensures that upon completion of the placement of such TMOS, they become part of the subsurface as a resource, the legislator uses

the concept of a polygon, since the latter, like a subsurface area, also has territorial boundaries.

10. In accordance with Part 3, paragraph 3 of the commented article, the order (alienation to third parties) TMO by the owners of subsurface plots and TMO production facilities on which these TMO were originally located, without transferring the rights of subsurface use or ownership to the TMO production facility, is due to the withdrawal of TMO data from the territory of the subsurface site or, accordingly, the territory of the landfill.

However, in the case of a subsurface area, such withdrawal (export) in accordance with Part 4, paragraph 3 of the commented article must necessarily take place during the period of existence of the subsurface area (use of the subsurface area) as an object of the right of subsurface use. Otherwise, in accordance with Part 1, paragraph 5 of the TMO, those alienated to third parties, but not physically seized (not exported) by the time the right to use the subsurface area is terminated, are imperatively considered "abandoned", becoming part of the subsurface and state property. Similar consequences follow from part 1 of paragraph 5 also for chemical, metallurgical and energy industries that were alienated to third parties but not removed from the landfill by the beginning of its closure.

These requirements are also designed to exclude the occurrence of a situation when TMO belonging to persons who are not legally obligated to eliminate the consequences of subsurface use operations, to close and reclaim the landfill, thereby creating an obstacle to persons who have such an obligation.

11. Parts 1 and 2 of clauses 4 (in the new version) of the commented article provide for the requirements for the placement of mining and processing facilities only in subsurface areas provided on the basis of an appropriate subsurface use license.

Thus, TMOS of mining industries (overburden, host rock, dust and poor (substandard) ore) can only be located at the exploration site, the TPI production site, the OPI production site or the subsurface space use site (for the purposes of clause 4 of Article 249). This requirement takes into account the fact that the listed types of TMO are always located near mining workings, and their formation is an integral part of the work carried out at these sites as part of the relevant subsurface use operations.

In turn, TMO of mining and processing plants (tailings and enrichment sludge) should be located only at the mining site or the site of the use of subsurface space (for the purposes of clause 4 of Article 249). This requirement takes into account the fact that the facilities for the placement (storage) of the listed types of TMOS are usually located near the mine located at the mining site, and the formation of these TMOS is strongly linked to mining operations. This requirement also takes into account economic, logistical, environmental or other circumstances that do not allow tailings or enrichment sludge to be placed at the mining site, i.e. near the mine. In this case, the allocation of a subsurface use area is provided for the placement of these types of TMO.

The envisaged legal structure is designed to ensure that these types of TMO are "covered" by obligations to eliminate the consequences of relevant subsurface use operations and amounts to ensure the fulfillment of these obligations submitted in accordance with the Special Part of the Subsoil Code (especially important when planning and calculating the amounts of elimination of the consequences of operations for the extraction of TPI or OPI and for the use of subsurface space).

The restrictions provided for the placement of TMOS from mining and processing industries in the relevant subsurface areas should be taken into account, including when removing these types of TMOS from subsurface areas (places of initial placement) in accordance with Parts 3 and 4 of paragraph 3 of the commented article and their subsequent placement, unless such removal is carried out by delivering TMOS directly to the processing plant. production.

12. It should be noted that, in accordance with Part 2, paragraph 4 of the commented article, the placement of sludge and tailings of enrichment is not provided for (prohibited) in the exploration areas of the TPI, which is also reflected in paragraph 6 of Article 194 of the Subsoil Code.

This ban was not established by chance and is intended to encourage subsurface users to exclude waste disposal from pilot testing or industrial enrichment of TPI samples extracted from the subsurface, which implies extensive land disturbance, high risks to the environment and the public, which are usually inherent in TPI mining sites or the use of subsurface space.

Thus, paragraph 4 of the commented article in relation to the exploration of TPI admits the inevitability of the formation and placement of overburden, dust and poor ores at the exploration site (the formation of a host rock on

atypical stage of exploration) as a result of extraction of rock mass, large-tonnage samples and the occurrence of exploration workings.

13. Part 3 of paragraph 4 is new and was introduced by the Law of the Republic of Kazakhstan dated January 2, 2021 No. 401-VI SAM "On Amendments and Additions to certain Legislative Acts of the Republic of Kazakhstan on environmental issues." This part is included in the implementation of the principle of sustainable development provided for in clauses 6 of Article 5 of the EC RK and the principle of rational management of the state subsoil fund (see commentary to Article 5 of the Subsoil Code), consisting, as noted above, including TMO included in the subsoil.

The preservation of the uniformity of the composition of TMOS is a determining factor for their qualitative characteristics, which determine the value of TMOS and their formation of man-made deposits for future development.

Man-made deposits formed by TMO are a source of secondary resources, the use of which is a priority from the point of view of the principle of sustainable development, while preserving natural ecological systems.

Thus, Part 3, paragraph 4 of the commented article provides for a ban on the placement of TMO on the same object (dump, storage) in the context of the provided classification. For example, it is prohibited to place overburden (TMO of mining production) and ash and slag (TMO of energy production) on the same dump. However, this provision does not regulate the issue of placing TMO at the same facility within the same classification group (for example, overburden and poor ores).

This prohibition provides for an exception, which nevertheless meets the goal of preserving the homogeneous composition of TMOS. According to the exception, the legislator allows the placement of TMOS formed by different industries on the same site, subject to two conditions at the same time.: 1) the TMOS placed must have homogeneous physico-chemical properties; 2) such joint placement complies with the requirements of the environmental legislation of the Republic of Kazakhstan, in particular, the norms governing waste management operations.

The most common example in the practice of placing chemical waste products of different industries at the same facility, but nevertheless having a homogeneous composition, is the placement of sediment from mechanical treatment of quarry and mine waters together with tailings or enrichment sludge in one storage facility. Currently, the legislator does not classify sediment from mechanical treatment of quarry and mine waters (sludge from quarry and mine waters) as TMO

mining industries, which nevertheless inevitably arise as a result of mining operations and, as a rule, have useful components.

In accordance with paragraph 4 of Article 358 of the EC RK, the joint placement of various types of waste materials (with the exception of ash and ash slag, since these wastes are not recognized as mining waste for the purposes of the EC RK) is allowed only if it is expressly provided for by the terms of the environmental permit issued. Thus, in order to comply with the requirements of environmental legislation, persons intending to place TMO (with the exception of ash and ash slags) with homogeneous physico-chemical properties at the same facility must obtain an environmental permit with appropriate conditions for this.

The placement of various types of TMO on the same site should be distinguished from mixing them with each other or with other wastes and materials in order to eliminate the consequences of subsurface use, including the reclamation of disturbed lands (i.e. disposal, according to environmental legislation), which are also carried out in accordance with an environmental permit. Thus, the technical features of the elimination of the consequences of subsurface use at the site of extraction of TPI or OPI and the site of the use of subsurface space during the placement and (or) operation of facilities for the placement of TMO mining and (or) mining and processing plants, approved at the subordinate level, in paragraphs 27 and 33 explicitly provide for the possibility of using inert materials overburden and empty (containing) rocks for filling quarries, vertical and horizontal openings of underground mines. In turn, subclause 4 of the clause 41 of the specified Technical features of the liquidation allows the laying of tailings in underground mines or flooded quarries, depending on the quality of the water contained. Thus, in the complex, these points allow the mixing of waste rock with enrichment tailings, forming a paste-like mass, for laying underground mine workings, provided, however, that this does not lead to a deterioration in the quality of groundwater and is directly provided for by the terms of the environmental permit, as prescribed by the EC RK.

14. The commented article, in accordance with paragraph 3 of Article 277 of the transitional provisions of the Subsoil Code, applies to relations arising under contracts for exploration and (or) extraction of mineral resources, as well as contracts and permits for exploration and (or) extraction of mineral resources, concluded and issued prior to the entry into force of the Subsoil Code.

Based on the content of paragraph 3 of Article 277 of the Subsoil Code, the application of the commented article to legal relations on TMO that arose before the Code came into force is carried out through the prism of relations between the use of subsurface areas (for subsurface use) on the basis of subsurface use contracts concluded before the introduction of the Subsoil Code.

However, based on the classification of TMOS given in paragraph 1 of the commented article, it is obvious that the application of the provisions of the commented article through the prism of paragraph 3 of Article 277 of the Subsoil Code applies only to TMOS of mining industries by virtue of their formation (emergence) as a result of relations for the extraction of solid minerals (mining production) based on permits, licenses and contracts for subsurface use issued and concluded prior to the enactment of the Code on Subsurface Resources.

However, the provisions of the commented article still do not fully apply to the TMOS of mining industries. Thus, paragraph 10 of Article 277 of the Code establishes an exception from the requirements of Part 1 of Paragraph 4 of the commented article, which provides that "facilities for the placement and (or) operation of man-made mineral formations of mining and (or) mining and processing industries that arose before the entry into force of this Code, including in the case of their reconstruction with changes in territorial boundaries, require a license to use the subsurface space for the purposes of specified in article 249, as well as the restrictions provided for in subparagraph 2) paragraph 1 of Article 25 of this Code shall not apply." It follows that if the facility for the placement of mining waste (for example, a landfill) is not new, i.e. it already existed by June 29, 2018, then the further placement of such waste in this landfill for storage and removal purposes in the context of art. 249 of the Subsoil Code does not require obtaining a license to use the subsurface space, nor does it require obtaining a license to extract TPI or OPI, if only because these TMO are not considered as an integral part of the subsurface - a subsurface resource, and therefore do not imply the emergence of an object of subsurface use rights for the purpose of extracting minerals from them (provision of a subsurface area for mining operations) as long as they are privately owned. A similar exception to the rule of part 2 of paragraph 4 of the commented article is established only within the boundaries of mining sites or the use of subsurface space for the same reasons for mining and processing industries. Withdrawal data has been generated

based on the understanding of the economic inexpediency and impossibility of forcing the registration of licenses for the use of subsurface space for the purposes of subclause 4 of Article 249 of the Code on Subsurface Resources for all previously existing TMOS of mining and processing industries due to the requirements for the provision of financial security to eliminate the consequences of the placement of such TMOS used in this case.

In other respects, the Code does not provide for exceptions from the commented article regarding the TMOS of mining industries.

15. Application of the commented article in accordance with paragraph 3 of art. 277 of the Code on Subsurface Resources, to the legal relations on TMOS of mining industries formed before the Code came into force as a result of activities under contracts for subsurface use, also concluded before the Code on Subsurface entered into force, creates the possibility of solving the legal and practical problem of transferring, along with the right of subsurface use to a subsurface area, also the right to use such TMOS, in particular the array (location) of which contains private minerals (for which the mineral extraction tax and (or) royalties were paid during their extraction) and state - for which the mineral extraction tax or royalties have not been paid (see paragraph 2 above). Thus, the retrospective application of the commented article to the specified TMOS presupposes the application, within the term of the subsoil use right under the relevant contract, of the provisions of Part 1, paragraph 3 of the commented article on the ownership of the entire volume of these TMOS, regardless of the payment of the mineral extraction tax. It should be noted that this provision on the right of state ownership of minerals contained in TMO for which the mineral extraction tax has not been paid was in effect from the beginning of 2015 until June 29, 208, the date of the Code's entry into force.

Otherwise, it is impossible to implement the provisions of the commented article, for example, on following the fate of a mining site provided under a previously concluded contract (see paragraphs 7 and 13 above), as well as on sale to third parties through removal from the site. Thus, when the right of subsurface use is transferred under a previously concluded subsurface use contract, it will become impossible to transfer to the ownership of the acquirer the rights of subsurface use formed as a result of activities under the mining contract (according to paragraph 3 of art. 407 GC), since it will be impossible to identify the amount of minerals contained in the array of these TMOS and vice versa. According to the author of this comment on

In practice, the parties should only identify the TMO location and its (their) parameters according to the TMO passport when making such a transfer.

In the opinion of the author of this commentary, the problem of paying the mineral extraction tax on the volume of minerals and mineral components contained in the array of all types of TMOS that are privately owned and subject to alienation, use or processing should be resolved in the tax legislation of the Republic of Kazakhstan.

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Kazakh Association of Organizations of the Oil and Gas and Energy Complex KAZENERGY

Nur Sultan 2022

The Kazenergy Association expresses its sincere gratitude for the support in preparing the commentary to the following companies: North Caspian Operating Company NV, NC KazMunayGas JSC, Mangistaumunaygas JSC, Karachaganak Petroleum Operating BV, White & Case Kazakhstan LLP, Haller Lomax LLP)", "Erlicon CG" LLP, "Signum Law Firm" LLP. © Kazenergy Association, 2022 © team of authors, 2022 © authors, 2022

Dear readers!

We offer you a scientific and practical commentary prepared by a group of Russian specialists with extensive practical experience in legislation on subsoil and subsoil use and who participated in the preparation of the Code on Subsoil and Subsoil Use.

Subsurface use is a very complex and specific area of public relations, the regulation of which has its own historical background and takes into account the technological specifics of the process of subsurface development, as well as environmental, commercial, legal and other features of exploration and development of deposits.

Kazakhstan's legislation on subsoil and subsurface use has passed through several stages in its development, and has always been based on a balance of interests between the state and subsurface users, transparency, striving for the maximum possible degree of protection of the rights and legitimate interests of investors, ensuring sustainable social, economic and environmental development of the country.

The Code "On Subsoil and Subsoil Use", adopted at the end of 2017, was developed taking into account many years of accumulated experience and law enforcement practice, as well as the results of extensive discussions with experts working in the industry.

It reflects specific, important measures on the part of the state to increase the investment attractiveness of exploration and further reduce administrative barriers.

Nevertheless, practice and legislation do not stand still, constantly evolving, taking into account new challenges facing both the subsurface use industry and the economy as a whole.

In this regard, this commentary is intended to serve as an aid for a wide range of interested persons – specialists working in the industry, in

understanding the meaning of the norms, their historical context, the interrelationship and mutual influence of the various provisions of the Code.

We also hope that studying the commentary will serve as an incentive for new generations of young domestic specialists to work scientifically and practically in this important industry, for the benefit of the development of our country, current and future generations of Kazakhstanis.

Sincerely, U. Karabalin, Deputy Chairman of the Kazenergy Association, Hero of Labor of Kazakhstan