Mining/ KLSH Report: Insufficient Strategy Without Sector Measuring Indicators

The country lacks a complete strategy with real indicators on the performance of the mining sector, thus not providing an accurate picture of investments, the number of employees, or other important indicators.

A performance audit report by the Supreme State Audit Office lists this very aspect among its conclusions, underlining that there is no reporting or monitoring on this strategy, nor even a structure responsible for carrying out the latter.

"The mining strategy of the Republic of Albania is deficient, without measuring indicators for the entire period of its activity (2010-2025) for several different aspects such as the value of investments in the mining sector, the number of employees employed in the mining sector and its sub-sectors, etc.

Regarding Monitoring and Reporting on the progress of the Mining Strategy of Albania, no Report has been prepared to demonstrate its goals and objectives.

"The Albanian Mining Strategy does not specify the establishment and obligation of any structure to monitor its indicators, unlike what is specified in the Swedish Mining Strategy," the audit states.

In this context, the SAI has recommended that the Ministry of Infrastructure and Energy, in drafting the new Mining Strategy, take measures to define indicators for the entire period of its duration, as well as to clearly define the unit or structure that will periodically monitor it.

The same audit focuses on a detailed analysis of income from mining royalties and specifically on permits granted for construction materials and specifically “marbled limestone”. Despite the fact that the entities' income has been increasing as a result of the sales volume, the royalties have not reflected this trend.

The auditors highlight that in the GMMD exploitation sector, 63% of mining permits belong to the designation "Marbled Limestone".

"Production at the end of 2022 in the GMMD exploitation sector results in 27,279 m3 from 12,537 m3 in 2020. The income of entities that exploit GMMD from sales (domestic and foreign) results in 592,155,168 lek for 2022, marking a high increase compared to the income from sales for 2020, which was 230,054,425 lek.

The volume of GMMD's product sold (in m3) has increased from 11,011 m3 in 2020 to 24,927 m3 in 2022.

"Despite the increase in the volume sold on which the mining royalty is calculated, the latter's performance has marked a downward trend for the audited period from 13,320,612 lek in 2020 to 8,888,552 in 2022," the report highlights.

The same brings to attention that some entities do not pay the rent while recommending that the National Agency of Natural Resources, for all entities that exploit Massive, Marbled and Decorative Limestones, take measures to unify the payment of the mining rent based on the name of the mineral contained in the Mining Permit for exploitation./MONITOR