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PRESIDENTIAL DECREE OF THE AZERBAIJAN REPUBLIC

of March 6, 2000 No. 293

About approval of Rules of maintaining the state stock balance of minerals

(as amended on 10-02-2014)

For the purpose of ensuring execution of the Law of the Azerbaijan Republic "About subsoil" and according to the Presidential decree of the Azerbaijan Republic "About application of the Law of the Azerbaijan Republic "About subsoil" of April 27, 1998 I decide No. 701:

1. Approve "Rules of maintaining the state stock balance of minerals" (are applied).

2. This Decree becomes effective from the date of publication.

President of the Azerbaijan Republic

Heydar Aliyev

Approved by the Presidential decree of the Azerbaijan Republic of March 6, 2000 No. 293

Rules of maintaining the state stock balance of minerals

I. General provisions

1.1. These rules are prepared according to the Law of the Azerbaijan Republic "About subsoil" and the Presidential decree of the Azerbaijan Republic "About application of the Law of the Azerbaijan Republic "About subsoil" of April 27, 1998 No. 701 and establish procedure for maintaining the state stock balance of minerals on commercial fields in the territory of the Azerbaijan Republic, including within the sector of the Caspian Sea (lake) belonging to it.

1.2. The state stock balance of minerals is conducted for the purpose of accounting of condition of mineral resources and reflects in itself data on quantity, quality, extent of studying, placement, extent of use in the industry of inventories of all types of minerals on commercial fields, production, losses of minerals, ensuring the industry with explored reserves.

1.3. The state stock balance of minerals is constituted and conducted by the Ministry of Ecology and Natural Resources of the Azerbaijan Republic based on the reports provided in accordance with the established procedure by the subsoil users who are engaged in geological studying of subsoil and operation of mineral deposits (further - organizations and the organizations), to the State geological information fund. The corresponding part of the state stock balance of minerals connected with oil and gas is constituted and conducted with participation of the Department of Energy of the Azerbaijan Republic.

1.4. Execution of the requirements following from these rules is obligatory for all organizations and the organizations which are engaged in geological studying of subsoil of the earth and operation of minerals irrespective of pattern of ownership and legal form.

II. State stock accounting of minerals

2.1. On the state accounting inventories of mineral deposits which are open as a result of exploration works in the territory of the Azerbaijan Republic undertake, including within the sector of the Caspian Sea (lake) belonging to it and are confirmed in the appropriate order.

2.2. To the State stock accounting of minerals are subject:

2.2.1. Condition of mineral deposits and their sites, the mountain companies and inventories of minerals over the country for January 1 every year;

2.2.2. Inventories of minerals which undertake on the state balance, over the country;

2.2.3. Production and losses on mineral deposits, the involved in operation, annual reports on change of inventories as a result of operational and prospecting works and on other reasons;

2.2.4. Data on the level of providing the operating, under construction and projectible mountain companies with mineral and raw inventories.

2.3. The state stock accounting of minerals is kept depending on extent of their studying, quality of mineral raw material and mining service conditions of fields on the basis of categories A, B, C1, C2 separately on groups of balance reserves and off-balance inventories.

2.4. Inventories of mineral deposits which meet the requirements of the standard (conforming to standards, specifications), established for stock counting of minerals in subsoil and which operation is recognized economically reasonable are considered as balance reserves. Treat balance reserves:

2.4.1. Inventories of the mineral deposits approved in the Commission on inventories of minerals of the Ministry of Ecology and Natural Resources of the Azerbaijan Republic (further - the Commission on inventories of minerals);

2.4.2. Inventories of the mineral deposits counted according to requirements of temporary standard and approved in the appropriate order;

2.4.3. Inventories of mineral deposits which investigation was carried out earlier and which industrial inventories are approved in the operating procedure;

2.4.4. The residual stocks kept for technical reasons during operation of mineral deposits in subsoil and which operation in the future can be provided possible;

2.4.5. Inventories of fields of the operated minerals.

2.5. Inventories of minerals, geological and technical and economic indicators which do not meet the requirements of the standard (conforming to standards, specifications), approved for the corresponding mineral and raw type however are considered as off-balance inventories can be involved in the future in commercial operation. Treat off-balance inventories:

2.5.1. The inventories of minerals approved by the Commission on inventories of minerals as off-balance inventories;

2.5.2. Inventories of minerals which meet the requirements of the operating standard (to the conforming standards, specifications) however exploitation of whom using the available equipment and technology is considered inefficient in view of placement in difficult mining conditions.

III. Maintaining the state stock balance of minerals and control

3.1. The state stock balance of minerals is constituted and conducted based on annual reporting stock balances of the minerals provided by the companies and the organizations which are engaged in geological studying of subsoil and operation of mineral deposits for balance and off-balance reserves of the minerals approved in the appropriate order and taken on the state accounting.

3.2. The annual reporting stock balance of minerals consists from 5 prospecting (5 gr) statistical forms of account, the act of write-off of inventories, the protocol on growth of inventories on mineral deposits where exploration works, their transition from one category are carried out to another and the explanatory note.

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