This section presents some brief information on the Legal Framework of a group of Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru and Uruguay.
If you are interested to learn more on these topics, you can find a summary of the regulatory framework related to extractive activities on the Latin American Country fiches & SCOT anlyses tool available in the Members' Area. This tool is organised in 8 indicators: Government and judiciary systems; Exploration licenses; Mining licenses; Mining Code, Permitting procedures; Government support for the mining industry; Mining tax regimes; Occupational Health and Safety.
- The Mining Code (Law No. 1919; Decree No. 456/1997; Law No. 25225) is the main normative body, complemented by provincial procedure laws and some special federal laws containing specific dispositions, e.g. Law on Investment in Mining (No. 24196), as amended by Laws No. 25429 and No. 25161.
- Mineral rights are owned and managed by the provinces.
- The exploration concession (Permiso de cateo) gives the owner a preferential right to explore a specific area for minerals and to apply for a mining concession.
- The mining concession (Concesión minera), under which exploration can be conducted too, is the title that grants the right to exploit minerals.
- Government incentives for mining activities include, among others, deductions on explora-tion expenses in income tax assessments, VAT refund on exploration costs, exemption from import duties for capital assets and goods used in mining activities.
- The Brazilian Mining Code (Decree-Law No. 227 of 1967), as amended, and the Mining Code Regulation (Decree 9.406/2018), are the base of Brazil’s regulatory framework for the mining sector.
- Complementary regulatory developments include:
- Law No. 13.575/17 which creates the Brazilian National Mining Agency (ANM)
- Law No. 13.540/17 that has reformulated the royalty regime.
- Decree No. 9.406/18 specifying competences of the ANM and new environmental and public safety requirements
- Decree No. 9.407/18 establishes a new royalty payment structure.
- Mineral exploration licenses are granted by the ANM.
- The Ministry of Mines and Energy (MME) issues development-mining concessions (Concessão de Lavra).
- Mining Concessions are currently awarded for indefinite period until exhaustion of the mine.
- The main pieces of regulation for the Chilean mining sector are the Mining Code (Law 18.248), and its Regulation (Decree N 1/1989), the Mining Concessions Act 18.097 and the Copper Reserve Law (Law 16.624).
- Exploration concessions are granted by a judicial resolution from ordinary courts, issued at a noncontentious proceeding with solely the technical opinion the National Geology and Mining Service (SERNAGEOMIN).
- The holder of an exploration concession can request a mining concession, which is granted by court after a technical review by SERNAGEOMIN.
- Chile has a progressive royalties system based on company sales (with a fixed rate for lithium). The mining royalty is a deductible expense for corporate tax purposes; in special cases, mining companies may apply for special value added tax exemptions.
- The Colombian Mining Code (Law 685/2001, modified by Law 1382/2010) and Decree 2655 of 1998 regulate the matters pertaining to mining concessions, contracts, permitting procedures, etc.
- Complementary Decrees and Resolutions establish additional regulation, for example Resolution 352 of 2018 (new criteria to evaluate the economic capacity of applicants for con-cessions).
- The National Mining Agency (ANM) is responsible for granting exploration and exploitation concessions as well as administering the national mining registry, the mining cadaster and the Unique Registry of Minerals Traders (RUCOM).
- The Mining Concession Contract (Contrato de concesión) is the mining title that exclusively and temporarily grants the rights to explore and exploit minerals within a given area.
- Incentives for mining include tax benefits such as the works for taxes scheme and tax credit for investment in innovation.
- The Mexican Mining Law (from 1992, last amended in 2014), its Regulation, and Article 27 of the Mexican Constitution regulate mining issues, in particular the exploration, exploitation, and processing of minerals.
- The General Directorate of Mines (Dirección General de Minas), under the Secretariat of Economy, issues and administers the mining concessions.
- Mining concessions grant their holders the right to explore, exploit and benefit all the substances that are explicit in the title and located within the area granted. Mining concessions are valid for 50 years and can be extended for the same period.
- Royalties are levied on the mining sector but concession holders may benefit from incentives such as tax credits for investing in R&D&I.
- The General Law of Mining (Supreme Decree Nº 014-92-EM; Legislative Decree Nº 109) and its corresponding regulation, the Mining Procedures Regulation (Supreme Decree 020-2020-EM of 2020), regulate mining activities, concessions, taxes and related matters.
- Complementary laws and decrees establish additional regulation, e.g. the Law for Mining Investment Promotion (Legislative Decree DL N° 708) and the Law on mining royalties (Law Nº 27506 of 2001), last modified in 2018, with its regulating decree D.S. Nº 005-2002-EF, last modified in 2019.
- The mining concession (concesión minera) grants the right to both explore and exploit the mineral resources within the area granted by the concession.
- The Geological, Mining and Metallurgical Institute (INGEMMET) conducts the administrative procedures leading to the granting of mining concessions for medium and largescale mines.
- In the case of smallscale mining, the title is granted by the Regional Directorate of Energy and Mines (DREM).
- Royalties are levied on mining companies but they may benefit from incentives such as legally guaranteed tax invariability and the works for taxes scheme.
- The Mining Code (Law 15.242 of 1982, modified by Law 18.813 of 2011) with its Regulatory Decree (No. 110/82 of 1982), and the Law on Large Scale Mining (Law 19,126 of 2013), regulate mining rights and organize the regimes that enable mining activity in Uruguay.
- The National Directorate of Mining and Geology of the Ministry of Industry, Energy and Mining (DINAMIGE) is the institution in charge of granting the prospection and exploration permits, and the exploitation concessions..
- The exploitation concession (Concesión para explotar) grants the exclusive right to mine one or more mineral substances in a specified area. Exploitation concessions are granted for up to 30 years with the possibility of subsequent extensions.