The mining sector in the Republic of North Macedonia is centred on polymetallic deposits, including copper, lead, zinc, gold and silver, together with industrial minerals such as limestone, aggregates, gypsum and clay. Historically, lignite played a key role in energy generation, although current decarbonisation policies are gradually reducing coal’s importance.

Mining activities are carried out exclusively under state-awarded concessions granted by the government of the Republic of North Macedonia as the concession authority. Concessions are available to any qualified legal entity, including foreign companies operating through locally registered branches or subsidiaries, on equal legal footing with domestic investors. Several major projects involve international capital participation, particularly in underground copper and base metal developments. One of the most recent publicly recorded underground mining concessions was awarded to the legal entity BULMAK in 2016, which continues to operate active mining projects.

Geological prospectivity remains strong, with underexplored reserves increasingly relevant for European supply chains of critical and energy-transition minerals.

The Republic of North Macedonia has a civil law system. The principal statute governing the mining sector is the Law on Mineral Resources, which regulates geological exploration, exploitation, concessions, royalties, mine closure, supervision and environmental obligations. Concessions are awarded according to the Law on Concessions and Public-Private Partnerships.

Environmental regulation is primarily governed by the Law on Protection of the Environment (including mandatory environmental impact assessment (EIA) procedures), complemented by the Law on Nature Protection and the Law on Waters.

The government of the Republic of North Macedonia is currently preparing a new Law on Mining and a new Law on Geology, intended to align national legislation with Regulation (EU) 2024/1252 – the Critical Raw Materials Act (CRMA). Policy direction is provided by the National Strategy for Geological Exploration and Sustainable Use of Mineral Resources 2025–45.

Mineral resources are state-owned public goods. Ownership of surface land does not include rights over underground mineral deposits. Exploration and exploitation rights may be obtained only through a concession granted by the state – ie, the government of the Republic of North Macedonia. Concessions provide exclusive rights to explore or exploit within a defined area but do not confer ownership of the mineral deposit.

The state is the sole owner of mineral resources, which are classified as goods of public interest under national law. The state acts exclusively as a grantor and regulator of mineral rights and does not participate as an owner-operator in mining activities. No mandatory government joint venture, equity participation or contracting requirements apply to mining projects. Exploration and exploitation are carried out by private operators holding concessions awarded and supervised by the competent authorities, subject to strict environmental protection and environmental, social and governance (ESG) compliance obligations.

Mineral rights derive from statute and concession contracts, not from constitutional ownership rights. A concession constitutes an exclusive right to explore or exploit minerals within a defined area. While it does not provide ownership of mineral deposits, the concession has characteristics of a protected property interest, including exclusivity, transferability (subject to state approval), enforceability before courts and the ability to be pledged as security.

Mineral rights are granted at the national level by the Ministry of Energy, Mining and Mineral Resources. There is no regional or municipal licensing authority, and no overlapping jurisdiction. Rights are awarded through a public tender process, formalised by a concession agreement executed between the state and the successful bidder. The agreement defines the concession area, duration, ESG obligations, royalties, reporting obligations and rehabilitation duties.

Security of tenure is ensured through a combination of statutory and contractual protections. Concessions for the exploitation of mineral resources are granted for periods of up to 30 years and, depending on the verified mineral reserves established in approved geological studies, may be extended for an additional period of up to 30 years, subject to continued compliance with applicable legal and contractual requirements. Holders of exploration rights are entitled to progress to exploitation upon confirmation of commercially viable reserves and completion of all necessary permitting procedures. Revocation of mineral rights is permitted solely in cases of material breaches of legal or contractual obligations and is subject to due administrative process and judicial review. Concessions may be transferred or pledged as security with prior governmental approval. Concessionaires retain full operational control over extraction, processing and marketing activities within the applicable regulatory framework.

The legal framework regulating environmental protection in the context of mining projects is comprehensive and consists of several laws that establish the obligations for nature protection, control of industrial emissions and duties related to the exploitation of mineral resources.

The Law on the Environment is the primary law governing the rights and obligations of all entities in ensuring conditions for the protection and improvement of the environment. This law regulates key principles such as the precautionary principle, under which measures are taken even when there is only a suspicion of harmful consequences, and the prevention principle, under which measures are undertaken before harmful consequences occur.

The Law on Mineral Resources is the law regulating geological research and the exploitation of mineral resources. It explicitly states that every activity must comply with the principles of sustainable development and environmental protection for the duration of the activities, and also imposes an obligation to carry out remediation and reclamation of the area after the completion of activities.

The Law on Industrial Emissions Control is essential because it regulates the integrated prevention and control of pollution from industrial activities.

The Law on Waters regulates the management of surface and groundwater, their protection and protection from their harmful effects, as mining projects involve activities such as the abstraction, pumping or discharge of water.

The environmental permitting process for exploration and mining projects is multi-phase and integrated, involving several types of permits and approvals that are mutually interdependent.

The first and mandatory phase is the EIA; the second phase is obtaining the integrated environmental permit. However, in addition to these environmental permits, the concessionaire must also have a Waste Management Plan for mineral resources, a financial guarantee sufficient to cover the costs for eliminating harmful environmental effects and for land remediation, and a programme for the prevention of significant hazards.

The competences for environmental permitting are divided between the national and local levels depending on the scale, meaning that the Ministry of Environment and Physical Planning is responsible for larger and more complex industrial installations, whereas the mayors of municipalities are responsible for smaller projects.

The legal framework provides authorities with strong and efficient instruments for monitoring and sanctioning polluters, including the complete suspension of mining projects that do not comply with environmental regulations.

Protected areas certainly exist, and these include national parks, nature reserves, and the lakes Ohrid, Prespa and Dojran.

The existence of protected areas has a direct and significant impact on the activities of exploration, development and exploitation of mineral resources, an impact that is manifested through general and specific prohibitions, strict procedural requirements, and protection regimes that vary depending on the category and zoning of the protected area.

Any potential mining project within or in the vicinity of a protected area must undergo rigorous impact assessment procedures and obtain consent from the environmental protection authorities, which represents a significant legal, administrative and financial obstacle.

The legislation clearly prioritises the protection of nature over economic exploitation in these areas.

North Macedonia’s legislation provides and establishes a framework for managing community relations in a manner that requires:

• mandatory public participation in environmental procedures, particularly by the affected local community;
• a key role of local self-government as the representative of the community – ie the mandatory opinion of the municipality for any project intended to be implemented on its territory;
• strong protection of private property; and
• specific mechanisms for the protection of minority communities.

This creates conditions under which no mining project can be implemented without a significant level of consultation and consent from the local community.

Prior and informed consultation is unequivocally mandatory. It is systemically embedded in the legal framework and is implemented as a shared responsibility of the state and the investor.

The state sets the framework, conducts the formal procedures and renders the final decisions, while the investor is responsible for providing detailed information, directly negotiating with property owners and financing the transparency process.

The legislation establishes several mechanisms ensuring that the public, and especially the local community, is informed in a timely manner and actively involved in the decision-making process.

This obligation is not merely a formality, but is integrated into the key phases of licensing, from environmental assessments to the granting of concessions. The responsibility for conducting these consultations is divided between the state authorities and the investor.

The legal system does not use the terms “indigenous” or “traditional people”; it provides an exceptionally high level of protection for groups defined as “communities” based on their ethnic, cultural, linguistic and religious identity. This protection is enshrined in the Constitution of the Republic of North Macedonia and is elaborated in detail through specific laws that guarantee a range of rights – from the protection of identity, language and culture to political participation and equitable representation in the public sector. Specialised institutions at the national and local levels have also been established to implement these rights, indicating a systemic and comprehensive approach to the protection of these communities.

A community development agreement is not legally mandatory in the Republic of North Macedonia, but the legislation provides mandatory mechanisms that largely fulfill the same function, such as:

• the mandatory requirement for an opinion from the local self-government, which provides significant negotiating power;
• mandatory public participation; and
• the possibility for citizens to directly express themselves through referendums and assemblies.

Consequently, these mechanisms imply that investors in mining projects are almost compelled to establish a constructive dialogue and take into account the interests of the local community in order to ensure the smooth implementation of the project.

In the legislation of the Republic of North Macedonia, there is no single law or set of regulations called “ESG”; rather, there exists a complex and interconnected system of laws covering all three components.

Through mandatory environmental permits and assessments, mechanisms for public and local government participation, strict occupational safety rules as well as obligations regarding transparency, oversight, and corporate governance, a de facto framework has been established that addresses the ESG risks and impacts in the mineral sector.

The existence of detailed and strict legal provisions regulating and sanctioning the illegal exploitation of mineral resources indicates that the legislature recognises this as a significant problem.

The legal system establishes a clear distinction between legal and illegal activity, whereby legal exploitation is conditioned on obtaining a concession and an exploitation permit, while any activity without these documents is considered unlawful and entails administrative and criminal liability.

Moreover, the state authorities respond to illegal exploitation, starting from detection and urgent field measures, up to serious administrative and criminal sanctions, including imprisonment and permanent confiscation of equipment.

A good example of community relations and consultations would be a mining project that follows all legally prescribed steps for transparency, public participation and respect for local rights. Such a project would proceed through the following phases:

• planning and information phase;
• co-operation with local self-government;
• protection of property and community rights; and
• operational phase and continuous dialogue.

In this scenario, the project is implemented with minimal social conflict, as the community is involved and informed, and its rights are respected at every stage.

A bad example would be a project where the investor and/or competent authorities neglect or merely formally implement the legal obligations for consultation, leading to conflict, mistrust and legal challenges.

In such a scenario, the project is accompanied by constant conflicts, legal battles, financial losses due to fines and work stoppages, and may ultimately result in the revocation of the operating permit.

Initiatives to address climate change impact the mining industry in the Republic of North Macedonia at multiple levels. They are not presented as a single policy, but as an integrated system of legal obligations arising from regulations on air protection, industrial emissions control, energy, nature conservation and mineral resource management. This system compels the mining industry to:

• invest in cleaner technologies through the obligation to apply the best available techniques (BAT) and comply with strict emission limit values;
• increase energy efficiency and shift towards renewable energy sources, in accordance with the national energy and climate policy;
• plan and implement remediation and reclamation measures, ensuring responsibility for the entire life cycle of the mining project; and
• integrate climate considerations into its strategic and operational planning to align with national climate change and emissions reduction plans.

In this way, the legal framework creates pressure on the mining sector to transform its operations towards sustainability and reduction of its impact on climate change.

In the legal system of the Republic of North Macedonia, there is no single law entitled “Law on Climate Change and Mining”; rather, there exists a comprehensive and interconnected legal framework that directly and indirectly regulates the impact of the mining industry on climate change. This framework is based on several key pillars: integrated control of industrial emissions, national climate change planning, an energy policy oriented towards decarbonisation and principles of sustainable use of mineral resources.

The main characteristics of this legislation are as follows:

• integrated prevention and control of pollution;
• national climate change planning;
• energy policy and transition; and
• sustainable use of mineral resources.

Although there is no single law dedicated specifically to climate change and mining, legislation in the Republic of North Macedonia has been adopted and is actively implemented. This creates a complex regulatory framework that obliges the mining sector to integrate climate-related considerations into its operations.

Sustainable development initiatives in the Republic of North Macedonia constitute a systemic approach, integrated across multiple laws, which imposes obligations from the earliest planning stages, through the licensing and operational processes, up to the closure of mining facilities and site remediation. This approach is based on the principles of precaution, prevention, comprehensiveness, public participation and polluter responsibility, aiming to achieve a balance between economic development and the protection of the environment and social well-being for current and future generations.

In essence, although there is no direct legislation on “energy-transition minerals”, the Republic of North Macedonia has established a legal and strategic framework that supports the objectives of energy transition and climate change.

Through its strategies and plans, this framework indirectly stimulates the demand for and exploration of minerals such as lithium, cobalt, rare earth elements and copper, which are crucial for the development of renewable energy sources and energy storage technologies. The exploration and exploitation of these minerals are regulated by the Law on Mineral Resources, with a strong emphasis on sustainable development and environmental protection.

According to North Macedonia’s legislation, the charges related to mining/exploitation of mineral resources are mostly fees and concession payments.

The concessionaire is obliged to make the following concession payments:

• one-time fee for detailed geological explorations – ie, for using the area for exploration;
• an annual fee for using the area awarded under the exploitation concession in the amount of DEN300,000.00/km² for metallic mineral resources; and
• a fee/compensation for the quantity of exploited mineral resources, in the amount of 4% of the market value of the exploited metal per ton in each ton of concentrate produced by the concessionaire. This is effectively the “royalty-type” component – the mineral output is taxed.

The concessionaire is also obliged to pay 10% profit tax.

North Macedonia’s legislation does not make a distinction between national and foreign investors, and the fees, concession payments and taxes are in the same amount regardless of whether it is a legal entity established by foreign legal entities or individuals or domestic legal entities or individuals.

In North Macedonia’s legislation, taxes are generally low and flat:

• profit tax is 10%;
• personal income tax (for individuals, salaries, dividends, etc) is also 10%; and
• VAT has a general rate of 18%, with reduced rates applying to certain goods/services depending on the item/category.

However, there is no tax reduction that applies exclusively to mining. In the mining sector, if part of the project – such as processing and/or industrial production – is located within a technological industrial development zone (TIDZ), the investor would gain the right to benefit from applicable incentives for legal entities, namely:

• ten years exemption from profit tax;
• ten years exemption from paying personal income tax for newly employed individuals within the legal entity;
• exemption from customs duties on the import of equipment and materials for production;
• exemption from VAT on the trade of goods and services within the TIDZ, except for trade intended for final consumption; and
• exemption from VAT on imported goods, provided the goods are not released for free circulation – ie, are not intended for final consumption.

Tax stabilisation agreements are not recognised under North Macedonia’s legislation for any sector.

If the concessionaire intends to transfer the concession for the exploitation of mineral resources, it is required to first obtain consent from the grantor – ie the government of the Republic of North Macedonia.

The entire procedure is conducted before the competent Ministry of Energy, Mining and Mineral Resources, which, upon receiving the request for consent to the transfer of the concession, submits a request for an assessment of the concessionaire’s business venture using the income method, in accordance with the Law on Valuation.

The new concessionaire is required to pay a transfer fee amounting to 7% of the appraised value of the concession for the exploitation of mineral resources, based on the valuation report, and such payment is a precondition for effectuating the change in the transfer of shares/stakes to the new concessionaire in the Central Registry of the Republic of North Macedonia.

The transfer fee is payable regardless of whether the legal entity to which the concession is being transferred is under foreign ownership.

The Republic of North Macedonia attracts mining investment through a concession-based system established under the Law on Mineral Resources, supported by ongoing reforms aimed at aligning the sector with EU standards. The country offers a transparent and competitive framework for obtaining exploration and exploitation rights, including public electronic auctions and mandatory EIAs for all major projects.

The fiscal regime is competitive: the concession fee for metallic mineral resources is relatively low (4% per tonne of produced concentrate), and the Republic of North Macedonia maintains one of the lowest corporate tax rates in Europe (10% profit tax). Labour costs are also highly competitive compared to other European jurisdictions.

Additional strengths include an experienced and technically skilled workforce, established mining tradition and cost-efficient operational environment. These factors, combined with access to EU markets, create favourable conditions for attracting foreign and domestic investment into the exploration and mining sectors.

Foreign investment in the Republic of North Macedonia is generally unrestricted and protected under the Law on Foreign Investments, which provides guarantees such as free transfer of funds and protection against expropriation. Foreign investors may hold 100% ownership in exploration or mining companies, and there is no separate foreign investment approval procedure for entering the sector.

Entry into mining is primarily regulated through the standard concession procedures for exploration and exploitation, which apply equally to domestic and foreign entities. However, strategic or critical mineral projects are increasingly subject to government approval, in line with new legislative developments and the forthcoming Law on Mining.

General requirements such as company registration, ultimate beneficial owner (UBO) disclosure and AML/CFT compliance continue to apply. Restrictions may affect the acquisition of real estate by foreign entities depending on reciprocity, but these do not limit access to mining concessions.

The Republic of North Macedonia is party to several multilateral and bilateral treaties that protect foreign investments in the exploration and mining sector. As a WTO member and a signatory to the Energy Charter Treaty (ECT), the country provides broad guarantees for foreign investors, including fair treatment, protection from expropriation without compensation, unrestricted transfer of profits and access to international arbitration.

The country has also concluded a wide network of bilateral investment treaties (BITs) with EU and non-EU jurisdictions, including Austria, Germany, Switzerland, the Netherlands, the United Kingdom, Turkey, China and others. These BITs generally provide classic investment protections such as national treatment, most-favoured-nation treatment, protection against unlawful expropriation, free movement of capital and recourse to ICSID or UNCITRAL arbitration.

In addition, the Republic of North Macedonia is a contracting state to the ICSID Convention, giving foreign investors direct access to investor–state dispute settlement for disputes relating to mining and natural resources.

Taken together, these treaties establish a stable international legal environment that favours and protects foreign investment in exploration and mining projects in the jurisdiction.

Financing for exploration, development and mining projects in the Republic of North Macedonia is drawn from a mix of equity, debt and off-take arrangements, with foreign capital remaining the primary driver.

Early-stage exploration is typically supported through equity investments from strategic investors, private equity funds and joint ventures between domestic companies and international mining groups.

Debt financing is available but remains limited in the domestic market. Local banks are increasingly hesitant to provide project or operational financing for mining companies due to internal ESG-driven policies, the push towards the green transition and broader institutional reluctance to finance industries perceived as environmentally sensitive. Nevertheless, both domestic financial institutions and international development banks (such as the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC) and various EU funding instruments) are willing to support the mining sector when projects are aligned with environmental improvement, green transition or sustainability objectives – such as renewable energy integration, reduction of harmful emissions or environmentally improved tailings management.

Large-scale development continues to rely predominantly on foreign commercial banks and industry-focused lenders. Off-take and prepayment structures remain widely used for securing funding tied to future production, while equipment suppliers often offer vendor or leasing arrangements for heavy machinery. Access to domestic capital markets is limited. Existing operational mines commonly rely on internal cash flow and refinancing from domestic banks for capacity expansion.

In the Republic of North Macedonia, domestic securities markets play a very limited role in the financing of exploration and mining projects. The North Macedonian Stock Exchange is relatively small and illiquid, and mining companies rarely access equity or debt capital through public offerings or listed instruments. Mining companies, especially ones previously involved in underground exploitation, are rarely listed locally due to limited access to capital, and at the moment every company granted a concession for underground exploitation of minerals is a limited company.

As a result, exploration and development activities are predominantly funded through private equity investments, shareholder loans, strategic joint ventures and direct foreign investment. For larger mining projects, financing is typically sourced from international financial institutions, commercial banks or multilateral development banks, or through the capital markets of foreign jurisdictions. In practice, international capital markets play a significantly more substantial role than the domestic market in securing funding for mining exploration, development and production in the Republic of North Macedonia.

Under North Macedonian law, mineral resources are state-owned and may be used by private entities only on the basis of a concession granted under the Law on Mineral Resources. Concessions are administrative rights, not proprietary rights, and therefore they cannot be freely mortgaged or pledged in the same way as tangible assets.

A concession may be transferred or encumbered only with prior consent of the government/Ministry of Energy, Mining and Mineral resources, and only if statutory conditions are met. Any attempt to create security without obtaining such consent is legally ineffective.

Security in mining finance is typically structured as follows:

• pledge over movable assets (equipment, machinery, vehicles) registered in the Pledge Registry;
• mortgage over land and buildings related to the mining site if they are owned by the company;
• pledge over shares of the concessionaire company (this is the usual workaround to “indirectly” control the concession);
• assignment of receivables and bank accounts; and
• control agreements over contractual rights (off-take agreements, supply contracts).

The concession itself may not be pledged unless specifically approved by the government. Even then, enforcement by the lender is limited because the state must approve any change in control or transfer of rights arising from the concession agreement in accordance with the law.

Over the next two years, the mining sector in the Republic of North Macedonia is expected to undergo a phase of accelerated regulatory consolidation and investment stabilisation, driven by a comprehensive reform agenda designed to fully align national legislation with European standards, most notably Regulation (EU) 2024/1252 (CRMA). This process is being led by the Ministry of Energy, Mining and Mineral Resources, which has positioned the modernisation of mining legislation as a central pillar of the country’s energy transition and decarbonisation strategy.

The forthcoming adoption of the new Law on Mining and the new Law on Geology is intended to strengthen legal certainty, introduce more predictable and transparent licensing procedures, streamline permitting timelines and integrate reinforced ESG governance, environmental safeguards and mine closure requirements within the concession regime. These reforms aim to create a stable, compliance-driven framework capable of supporting sustained foreign investment.

Exploration and development activity is expected to focus on energy-transition minerals, particularly copper and related polymetallic ores classified as strategic and critical under the CRMA, positioning the Republic of North Macedonia as an emerging contributor to European supply diversification initiatives. Concurrently, national climate policies promoting long-term net-zero objectives will continue to accelerate the gradual phase-down of coal operations while incentivising remediation projects and circular economy mining initiatives.

The implementation of the National Strategy for Geological Exploration and Sustainable Use of Mineral Resources 2025–45 will provide long-term policy coherence, reinforcing investment confidence and supporting the responsible growth of the sector during this period of regulatory transition.