Cyprus as a mining location
In 2004 the Republic of Cyprus became a full member of the EU, followed by joining the European Monetary Union (Eurozone) in 2008. Cyprus is Europe’s most southerly and eastern nation.
As a place to operate, Cyprus is relatively low cost with highly educated English speaking professionals and a good infrastructure. Locally sourced contract work has been consistently reliable and competent, and allowed Chesterfield to build a high quality and experienced local and expatriate technical team.
The Republic of Cyprus legal and regulatory framework is based on English Common Law and is recognised as a business-friendly and effective system.
Tenure types, royalties and tax
There are two types of mineral exploration tenure in Cyprus:
- Reconnaissance Permits: Allow reconnaissance work only, including basic surface sampling and geophysics. Reconnaissance Permits have less strict conditions upon grant and are reviewed more quickly.
- Prospecting Permits: Allow all typical exploration work, including surface sampling, geophysics and drilling, subject to the approval of specific programmes. Prospecting Permits can be up to 5 km2 (500 ha) and are valid for 5 years with a further 5-year extension readily available.
The current government royalty, calculated on the Free-On-Board (FOB) price, is 1% for metals and alloys; 2.5% for enriched minerals, cemented metals, salts or compounds of metals; and 5.0% for raw minerals (Eighth schedule, Regulation 36; Cyprus Mines Service, 2018a). Cyprus has a corporate tax rate of 12.5%.
Cyprus is a modern, first-world country with excellent infrastructures such as roads, ports and mobile phone coverage. There are international airports at Larnaca and Paphos with daily flights to many destinations throughout the year. There is a comprehensive, modern road network but no rail network. A network of paved roads joins all of the villages across the country. Numerous unpaved roads facilitate access into all but the remotest of areas. Access to each of Chesterfield’s project areas is excellent.
Since Cyprus has no primary energy sources, the Electricity Authority of Cyprus (EAC) depends entirely on imported fuel (mainly heavy fuel oil) for electricity generation. At present, the EAC owns and operates three Power Stations with a total installed capacity of 1478 MW: Vasilikos, Dhekelia and Moni (EAC, 2018). Local renewable generation is provided by wind turbines and solar panels. There are also a number of biofuel installations. Power is distributed via medium voltage lines.
According to the Transmission and Distribution Rules (EAC, 2018), the transmission starts from the busbars of the transmission substations that are housed in the power stations and via 132 kV or 66 kV overhead power lines or underground cables reaches the 11 kV or 22 kV Medium Voltage switchgear in all the other transmission.
Water use in Cyprus is administered by the Water Development Department. Rainfall is unevenly distributed with the highest mountains and the south-western coastal region having the highest rainfall. Approximately 90% of rainfall returns to the atmosphere as direct evaporation or transpiration. The remainder is distributed between surface and groundwater storage with a ratio of 1:3, respectively.
Cyprus has one of the warmest climates in the Mediterranean area and is classified as sub-tropical with very mild winters on the coast and warm to hot summers.
In general, the island experiences mild, wet winters and dry, hot summers. Variations in temperature and rainfall are governed by altitude and, to a lesser extent, distance from the coast. Average annual temperatures range from a minimum of 13.9°C to a maximum of 23.6°C, averaging 18.7°C. Mean annual rainfall is 386.7 mm (Cyprus Meteorological Service, 2018). There is typically enough snow in winter at the top of Mount Olympus that a number of short ski runs are maintained.
The climate does not limit the operating season and Chesterfield will be able to conduct exploration all year round.