July, 2013 - Partner Rafael Vergara and Associate Francisco Corona
Mining Industry
1. What is the nature and importance of the mining industry in your country?
The mining industry accounts for 13 per cent of the GDP and 62.6 per cent of Chile’s total exports (US$49.3 billion). Chile is the largest producer of copper (31.9 per cent) in the world market and also produces other metals, such as silver and gold, and many non-metallic substances.
The mining industry is mainly owned by private foreign and national companies. A significant part of the copper production of the country is in the hands of state-owned companies (Codelco and Enami).
2. What are the target minerals?
The target minerals in metallic mining are copper, iron, molybdenum, manganese, lead, zinc, gold and silver. In non-metallic mining, there are different groups of target minerals, of which nitrate, lithium and iodine are the most significant.
3. Which regions are most active?
The most active regions in mining are Arica and Parinacota, Tarapaca, Antofagasta, Atacama and Coquimbo, all located in the northern part of the country.
Legal and regulatory structure
4. Is the legal system civil or common law-based?
The legal system is civil law-based.
5. How is the mining industry regulated?
The mining industry is regulated by means of certain provisions in the Political Constitution (PC), specific mining laws – the Constitutional Organic Mining Law (COM) and the Mining Code (MC) – and other general and special regulations.
6. What are the principal laws that regulate the mining industry? What are the principal regulatory bodies that administer those laws?
The PC provides that the state is the owner of all mines although any individual or entity may apply for a mining concession to explore and exploit mines. Ownership of mines and concessions are different from the ownership of the surface land, which may be subject to obligations and limitations to facilitate mining exploration and exploitation activities.
The COM regulates mining concessions and establishes that all metallic and non-metallic substances may be subject to concesssions, except for oil and gas deposits, lithium, and deposits of any kind located in the sea bottom under Chilean jurisdiction or in areas deemed, by law, to be important to national security. These nonclaimable mineral substances may be mined by the state or stateowned companies or under administrative concessions or special operational contracts, all of them governed by their own legal statute.
The MC elaborates on the provisions of the PC and the COM. Chilean civil courts are the only entities that can receive the application for a concession, grant it and declare it terminated or extinguished. They also resolve all situations and conflicts related to concessions.
The National Geology and Mining Service (Sernageomin) is the governmental entity within the Ministry of Mining that approves the technical requirements related to the form, boundaries and location of concessions; it keeps a public record of concessions; and supervises the technical compliance with certain mining regulations.
Footnotes: gettingthedealthrough.com |
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