Introduction

Together with Argentina and Bolivia, Chile holds 56% of the world's lithium reserves, which provides significant extraction and production advantages. The Antofagasta and Atacama regions are home to Chile's most important lithium deposits. The Salar of Atacama salt flat in Antofagasta is:

  • 2,305 metres above sea level;
  • 316 kilometres (km) from the regional capital; and
  • approximately 3,000 km squared in size.

The Salar of Maricunga salt flat in Atacama is:

  • 3,756 metres above sea level;
  • 160 km northeast of the city of Copiapó; and
  • 14,500 hectares in size.

Until 1979, the Mining Code 1932 defined the legal regime for lithium. During that period, lithium was treated like any other mineral and could be privately owned without special restrictions. Article 3 of the Mining Code expressly mentioned lithium as a mineral that could be exploited under a concession and it was exempt from Article 4 of the code, which listed the mineral deposits reserved for state ownership.

Legal situation

This situation changed with the enactment of the following laws.

Decree-Law 2,886 Decree-Law 2,886 was published in the Official Gazette on November 14 1979. Under this law, lithium deposits are state property unless they constitute a concession granted prior to the law's enactment or were being processed at that time and meet the following conditions:

  • the application was recorded with the mining registrar prior to January 1 1979; and
  • the concession's survey had already been recorded when the law was enacted.

Further, under Decree-Law 2,886, lithium concentrates, derivatives and compounds cannot be subject to any legal dealings, unless carried out by the Nuclear Energy Commission or with its prior authorisation and in accordance with its conditions.

Law 18,097 Law 18,097, the so-called 'Organic Constitutional Law on Mining Concessions', was published in the Official Gazette on January 21 1982 and introduced the following changes to the previous regime:

  • The subject matter of concessions was changed from specific substantives to cover all mining substances found in the territorial scope of said concessions.
  • Lithium was made ineligible for private ownership without prejudice of the mining concessions validly obtained prior to the corresponding declaration of non-eligibility.
  • Owners of a legally obtained mining concession were given a constitutionally protected property right and cannot be deprived or precluded from carrying out the exploration, extraction or appropriation of substances that are the subject of the concession.
  • A limit of only one mining concession per territorial area was introduced.
  • Holders of a concession were given the right to be compensated for its expropriation and any damage caused (compensation covers the commercial value of the extraction rights that are the subject of the concession).
  • Deposits containing non-eligible substances ceased to prevent the granting of a mining concession for eligible substances existing in the same deposit. However, mining concessions do not entitle their holder to appropriate the non-eligible substances found in the same deposit. The state can take possession of such substances in accordance with the Mining Code.

Mining Code The Mining Code 1983 – contained in Law 18,248 and published in the Official Gazette on October 14 1983 – includes lithium as a non-eligible substance. Article 9 of the code provides that the state may require producers to separate, dispose of or deliver to the state significant quantities of non-eligible substances from mining products that are susceptible to being reduced or separated from a technical and economic point of view. The law provides that where the state has not issued a request to the producer, it will be presumed that the non-eligible substances contained in the respective mining products were not of a significant quantity. Before delivery, the state must:

  • reimburse any expenses incurred by the producer when carrying out the reduction and delivery; and
  • pay for any modifications and complementary work that may be required to carry out the reduction or separation process, as well as compensation for damages that may be incurred as a result of such modifications and complementary work. If non-eligible substances that belong to the state are sold, a fine of one-quarter of their value will be issued. References to the state in such cases will be understood to mean the Chilean Nuclear Energy Commission.

Supreme Decree 64  The Ministry of Mining's Supreme Decree 64 was published in the Official Gazette on March 1 2018. It establishes special operation contract requirements and conditions for the exploration, exploitation and processing of lithium deposits in the Salar of Maricunga salt flats and surrounding areas located in the Atacama region to be signed by the state with Salar de Maricunga SpA – a company controlled by the state-owned copper mining company CODELCO – in exchange for a fee and subject to a specific payment, excepting the concessions created in accordance with the Mining Code 1932.

For further information on this topic please contact Santiago Montt Vicuña at Montt y Cia SA by telephone (+56 22 233 8266) or email (smonttv@monttcia.cl). The Montt y Cia SA website can be accessed at www.monttgroup.com.

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