Royalty Agreements In Accordance With The Mining Legislation

What is a Royalty Agreement?

A royalty agreement refers to a legal relationship that enables the transfer of the right to operate a mining licence, for a specified period and under contractual terms, to natural or legal persons, provided that the essence and ultimate responsibility of such operating right remain with the license holder. Under this agreement, the royalty holder assumes the actual operation of the mining site and becomes obliged to pay the license holder a fee determined in advance between the parties for each unit of mineral produced.

In the Mining Regulation, a royalty agreement is defined as "agreements concluded between license holders and third parties or entities for the purpose of granting disposal rights over the whole or a part of the license area in order to operate and utilize the minerals within the license areas," whereas a royalty holder is defined as "natural or legal persons, public institutions and organizations, their