Investments in the metallic and non-metallic mining sectors in Paraguay. In Paraguay, mineral resources are the property of the State and may be mined on the basis of government permits and concessions. Over the past few years Paraguay has been busily updating its mining legislation to make it attractive to investments in the metallic and non-metallic mining sectors.

Mineral resources are the property of the State and may be mined on the basis of government permits and concessions. A concession requires congressional approval. A foreign person may obtain mining rights provided he establishes a domicile in Paraguay or appoints a representative.

Prospecting rights on the basis of a permit may be granted for up to 400000 hectares for a period of one year and renewed for the same period. Exploration rights on the basis of a permit may be granted for a period of 3 years and renewed for the same period upon application filed two months before expiration of the permit. Extraction rights on the basis of a concession may be granted for a period of 20 years and are renewable automatically for 10 years for non-gold projects.

The mining canon payment is set per hectare and is payable annually. The annual mining canon for extraction of metallic ore is set a US$2.50/hectare. Royalties are payable each quarter in money or in kind and are set at 2% up to a maximum of 8.40% of net income. Fiscal incentives exempt machinery, equipment and materials from duties and taxes for the duration of the prospecting and exploration stages.

The right of way process follows Civil Code rules, and the Law establishes that properties are subject to right of way upon the granting of a concession. If negotiation with the landowner is unsuccessful, the project developer can obtain those rights through expropriation.