Montenegro Cancels Concession Contract with Tara Resources for Brskovo Mine

03/06/2024

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Montenegro has canceled its concession contract with Swiss-based Tara Resources for the geological exploration and exploitation of polymetallic sulphide deposits in the area of the former Brskovo mine, according to local media reports on Thursday. The decision followed the discovery of a problem with a feasibility study that conflicted with the country’s current laws, stated energy minister Sasa Mujovic as quoted by public broadcaster RTCG.

“We notified the concessionaire and gave a deadline of 30 days to correct the deficiencies. However, that deadline expired on May 25 but we did not receive a response, which means that we have in place the conditions to unilaterally terminate the contract,” Mujovic explained. Tara Resources retains the right to appeal the decision.

In 2010, the Montenegrin government awarded Australian mining company Sultan Corporation a 25-year exploration and mining lease for the Brskovo lead and zinc complex. By 2011, Sultan announced it had discovered an initial inferred resource of 9.2 million tonnes at Brskovo, with strong potential for further findings. Tara Resources acquired the project in 2018 and has been operating it via its local subsidiary Brskovo Mine.

Tara Resources reported on its website that it completed a preliminary economic assessment in 2019 and a pre-feasibility study in 2021, demonstrating the strong economics of the project. The construction of the Brskovo mine was projected to involve a capital investment of around 180 million euro ($195 million) and would include two open-pit mines, a processing plant, and an integrated waste management facility.

In February, local media outlet Vijesti reported that during the first session of the working group formed to examine the project, the state body responsible for protecting property rights and interests in Montenegro asserted that the government had a legal basis to cancel the concession contract with Brskovo Mine due to missed deadlines for receiving urban and technical permits by the concessionaire.

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