Our mining team have been monitoring developments in various Latin American countries over the last few months – we have set out some points of note in this article.


The Argentine government intends to submit proposals for federal legislation to allow creation of open-pit mines across the country’s provinces, in order to boost investment into the country’s mining sector. Substantive mining legislation is enacted primarily through the Argentine Mining Code, however, local provinces (of which there are 23, and the Autonomous City of Buenos Aires) are permitted to regulate the industry and are responsible for granting mining concessions.

Having lifted the previous government’s foreign currency export restrictions, import restrictions and export duties in Argentina, the new government (as of December 2015) is seeking to attract new investment by unifying the approach of granting concessions for open-pit mines across the country through a common usage policy over the next 30 years. Several provinces have restrictive prohibitions on operations, including outright bans on open-pit mining, as in Chubut. However, the new government is seeking to implement a uniform approach to granting concessions across the provinces. The government aims to have a broad agreement in place with the provinces by December 2016, with legislation approved by congress and ratified by the provinces thereafter.


In January 2016, a new tax regime came into effect. Under the previous regime, foreign investors were able to agree an effective overall and invariable tax rate of 42 per cent. on taxable income for a period of up to 10 years beginning with the commencement of works, with scope for expansion depending on the value of the project. Under the new regime, the ability to fix an invariable tax rate is no longer possible. However, under the new regime’s transitional arrangements, foreign investors may, between 2016-2020, agree to a fixed rate of 44.45 per cent. for 10 years. Benefits under the new regime include certain exemptions from VAT on imported capital goods, the ability to remit abroad both the capital and earnings of investments (subject to tax compliance) and access to the formal foreign exchange market.

The Chilean government has also recently sought to protect the country’s key reserves. Despite forming the National Lithium Commission in 2014 to review the regulatory framework around lithium extraction, the Chilean government has this year maintained lithium’s status as a ‘strategic mineral’, limiting the amount capable of extraction. Though companies are able to apply for concessions, the designation requires an agreement with the state to limit the amounts of lithium extracted under each concession.


Ecuador is creating initiatives to attract foreign investment into the country. It is hoped that a competitive tax rate on extractive projects and the creation of the Ministry of Mines to better support operators will attract foreign investment in similar numbers to neighbouring Peru.

Though the Ecuadorian constitution requires at least 50 per cent. of the accumulated beneficial value of non-renewable projects to be given to the state, the government has devised a new formula by which the payment will be delayed until the final phases of the project’s life, and only where the accumulated benefits to the company exceeds those which would be due to the state.

Further regulatory and fiscal changes passed in 2015 concerning the reimbursement of VAT on mineral exports will take effect from 1 January 2018, whilst a new taxation threshold on share transactions (over 20 per cent. of the company’s value) replaces the previously unlimited taxation regime. The government is also seeking to encourage smaller existing operations to expand by removing restrictions on foreign investment in small mines.

Significantly, the government has, since April, allowed private companies to apply directly for mining concessions. The requested area will then be subject to a “Swiss challenge” procurement process, where the government publishes the bid and invites third parties to match or exceed it.

The Ecuadorian government may be learning lessons from previous phases of investment in Peru and Chile, which commentators argue failed to address local concerns and impacted projects in those countries. The government has claimed 60 per cent. of royalties from projects will be invested in local communities and infrastructure surrounding the operations, half of which will support indigenous communities.


In July 2014, the Peruvian government passed legislation designed to further increase foreign investment into the country by reducing fines for environmental damage, reducing the time periods of environmental studies and allowing certain operations in protected areas.

Following recent elections in Peru, the new government (as of July 2016) has committed itself to restarting mining projects which had been placed on hold and granting concessions for new projects, e.g. in Tambomayo, taking advantage of newly delegated powers from Congress. An estimated US $25 billion is tied up in around 20 projects currently on hold in the country: commentators attribute this to local opposition to projects over environmental and sustainability concerns, as mentioned above.

Further changes to mining legislation in Peru concern efforts to combat illegal mining operations. The government is preparing to submit proposals for legislation to concentrate at a national level the processes by which small and artisanal mining operations may be formally recognised and regulated.