New rules for establishing and altering the boundaries of subsoil plots

From 1 March 2025, new rules for establishing and altering the boundaries of subsoil plots allocated for use came into force as approved by Resolution of the Government of the RF dated 30 November 2024 No. 1693 (hereinafter – the “Rules”)

The new Rules not only clarify and supplement the norms of the Policy on establishing and altering the boundaries of subsoil plots allocated for use as approved by Resolution of the Government of the RF dated 3 May 2012 No. 429 but also introduce several new regulatory mechanisms.

State authorities’ control over the alteration of subsoil plots has been tightened

The Rules expand the list of state authorities which have the right to participate in the process of approving an increase in the size of a subsoil plot allocated for use. Now, this procedure may also include the participation of the Ministry of Agriculture, Rosvodresursy, and Rosleskhoz.

In addition, the Rules have also changed the composition of the commission considering applications on altering the boundaries of subsoil plots. In addition to representatives of Rosnedra, the Ministry of Natural Resources, Rostekhnadzor, and Rosprirodnadzor, the commission includes representatives of institutions subordinate to the above authorities, as well as representatives of the Rosleskhoz.
At the same time, representatives of the Ministry of Energy were excluded from the commissions.

These changes are aimed at raising the quality of government oversight over applications to alter the boundaries of subsoil plots and minimizing challenges to decisions from the commission on altering the boundaries of subsoil plots in connection with the possible failure to account for each prohibition and restriction of subsoil use corresponding to the legal status of the relevant land plot.

Reserving part of a subsoil plot

The Rules introduce special regulations for parts of subsoil plots, which according to the submitted application are planned to be used to expand the subsoil plot initially provided to the subsoil user.

Such parts of subsoil plots acquire the status of “allocated for use” from the moment the application on altering the boundaries of the subsoil plot is registered and until the date the applicant is notified of the application’s rejection / until the date of the issuance of the decision to alter the boundaries of the subsoil plot or to refuse to alter the specified boundaries.

Thus, if a subsoil user filed an application for the expansion of a subsoil plot at the expense of part of another subsoil plot and such an application has been registered, and afterwards another subsoil user applies for an expansion for a subsoil plot at the expense of the same part of another subsoil plot, the subsoil user who applied later will be denied approval to expand his subsoil plot.

New grounds for increasing subsoil plots

The following new grounds for expanding the subsoil plot are provided for by the Rules:

• on the overlying and/or underlying part of the subsoil outside the subsoil plot, there are minerals included in government statistics and related to a deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (a state examination of mineral reserves and groundwater will be required)^[1]
• outside the subsoil plot there is groundwater included in government statistics and related to the deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (a state examination of mineral reserves and groundwater will be required)
• outside the subsoil plot, which has the status of a geological allotment granted to a subsoil user or an entity which is part of the same group of persons, there are minerals included in government statistics and related to a deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (a state examination of mineral reserves and groundwater will be required)
• outside the subsoil plot, which has the status of a mining allotment granted to a subsoil user or an entity included in the same group of persons, there are minerals included in government statistics and related to a deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (it is important that the work on geological study of the subsoil or exploration of mineral deposits, according to the results of which the minerals are included in government statistics, were carried out at the expense of the subsoil user's own and (or) attracted funds) (a state examination of mineral reserves and groundwater will be required)
• outside the subsoil plot there are minerals related to table, potassium and (or) magnesium salts, included in government statistics and related to a deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (it is important that the work on geological study of the subsoil or exploration of mineral deposits, according to the results of which the minerals are included in government statistics, were carried out at the expense of the subsoil user's own and (or) procured funds) (a state examination of mineral reserves and groundwater with information on the impossibility of independent industrial development of the attached part of the deposit will be required)
• subsoil use waste (including overburden) is located on a land plot located outside the boundaries of the subsoil plot (design documentation that has been approved or sent for approval (if there is a notification of revision) will be required, and if it is planned to use the waste for extraction, a state examination of mineral reserves and groundwater will additionally be required)

In addition, grounds indicated in the legislation previously in force have been clarified by the Rules:

• outside the subsoil area, in unused parts of the subsoil within the territory of the Russian Federation and its continental shelf which constitute the state subsoil fund, there are minerals included in government statistics and related to a deposit partially located on the subsoil plot, the boundaries of which are planned to be changed (a state examination of mineral reserves and groundwater will be required)^[2]
• expansion of subsoil plot boundaries without an increase in reserves:
  
  • for geological exploration of the subsoil or exploration and assessment (design documentation with a positive expert opinion or design documentation sent for examination (if there is a notification of revision) will be required)
  • for exploration and production or geological studies, exploration and production (documents certifying the updated boundaries of the mining allotment or a technical project for the development of deposits (if there is a notification of revision) will be required)
  • for the construction and operation of underground structures not related to mining (documents certifying the updated boundaries of the mining allotment or a technical project for construction and operation (if there is a notification of revision) will be required)

Adjacent plots

For subsoil plots with the status of geological or mining allotment, the Rules provide for a procedure of “parallel” alteration of their boundaries (reducing one plot and expanding another).

For the purposes of “parallel” alteration, the following criteria must be met simultaneously:

• the deposit or parts thereof must be located within the boundaries of the main plot and the adjacent plot
• the main and adjacent plots are provided to one subsoil user or one of the plots is provided to a person belonging to the same group as the subsoil user of the second plot
• the conclusion of the state examination of mineral reserves and groundwater must be obtained

In this case, applications for reducing/expanding the main plot and reducing/expanding the adjacent plot are submitted simultaneously.

This mechanism of “parallel” alterations simplifies the adjustment of the boundaries of subsoil plots provided to subsoil users that are members of one group of entities in many respects and necessarily has a positive effect on the process of developing deposits.

Changes in restrictions

One of the main innovations provided by the Rules is the cancellation of the 20% limit in relation to added mineral reserves as a result of changing the boundaries of a subsoil plot.

This limit is not applicable in the two following situations:

• for hydrocarbon deposits, the reserves of which are included in government statistics based on the results of work carried out by subsoil users at the expense of their own and (or) borrowed funds
• for deposits of coal, table, potash and (or) magnesium salts, in respect of which the conclusion of the state examination of mineral reserves and groundwater has been obtained, containing the conclusion on the impossibility of independent industrial development of parts of these deposits

The lifting of these restrictions is aimed at stimulating the development of the oil and chemical industries by reducing delays for subsoil users thanks to the simplified procedure of expanding the boundaries of subsoil plots.

At the same time, the Rules establish new grounds for refusing to alter the boundaries of a subsoil plot.

These grounds can be divided into two groups.

The first group includes cases of altering the characteristics of the subsoil plot that result in the subsoil user losing tax benefits (for example, the degree of depletion of reserves, the amount of initial recoverable
resources, etc.)

The second group includes grounds related to the legal status of part of the subsoil plot which is planned to be integrated into the main plot:

• the subsoil plot has the status of “allocated for use”
• the subsoil plot contains reserves / projections of mineral species not specified in the license
• the subsoil plot is located within the boundaries of the territory of activity specified in the technical project for the development of mineral deposits approved by another subsoil user

This second group may also encompass situations in which a subsoil plot is provided to another subsoil user^[3]. However, this ground was also enshrined in the previous legislation.

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[1] Previously, this ground was applied only to the underlying part of the subsoil.

[2] This ground does not apply to minerals located on the overlying and (or) downstream parts outside the subsoil plot.

[3] This ground does not apply to changes in the boundaries of subsoil plots in connection with the performance of obligations under an international treaty, nor to the case of a “parallel” alteration in the boundaries of adjacent plots.