Mining rights and title

State control over mining rights

To what extent does the state control mining rights in your jurisdiction? Can those rights be granted to private parties and to what extent will they have title to minerals in the ground? Are there large areas where the mining rights are held privately or which belong to the owner of the surface rights? Is there a separate legal regime or process for third parties to obtain mining rights in those areas?

In accordance with the National Constitution (NC), the provinces are the original owners of the natural resources existing within their territories, although they are not allowed to exploit such resources directly. The relevant mining rights are granted by the provinces to third parties (individual or legal entities) by means of a legal concession.

Once a mining concession is granted, the title holder owns all the mineral deposits within the boundaries of the property, whatever the mineral substance contained therein.

Surface landowners do not hold direct rights over the mineral deposits, which may only be obtained by means of a legal concession. Exception is made with regard to certain types of industrial and non-metallic minerals, over which surface landowners have priority rights or exclusivity rights, depending on the type of mineral.

Publicly available information and data

What information and data are publicly available to private parties that wish to engage in exploration and other mining activities? Is there an agency which collects mineral assessment reports from private parties? Must private parties file mineral assessment reports? Does the agency or the government conduct geoscience surveys, which become part of the database? Is the database available online?

Law No. 24,466 created the National Database of Geological Information, managed by public entity SEGEMAR, whose mission is to obtain, process and make available to the public all information generated by the geological and geophysical research and exploration activities conducted within Argentine territory.

The national government and other national entities, as well as the miners’ beneficiaries registered under the MIL, are required to periodically supply the database with all the mining and geological information produced, with the exception confidential material.

In recent years, the Argentine government has worked towards establishing an open-government policy as an effort to increase transparency in relation to public information. In this respect, a national and provincial database, the Argentine Mining Information Centre (CIMA), was created. This database compiles information on a national and provincial level, among which the following is included:

  • applicable legislation;
  • unified mining cadastre;
  • information regarding the MIL registry; and
  • current projects’ specifications.

 

CIMA currently provides for the mining cadastre of every mining province (ie, Buenos Aires, Catamarca, Cordoba, Chubut, Jujuy, La Rioja, Mendoza, Neuquén, Rio Negro, Salta, San Juan, Santa Cruz, Santiago del Estero and Tucuman). Some provinces provide mining cadastral maps available online – which may be more up to date than the unified national cadastre – and some others only deliver them upon request by the authorities. Despite this, in practice, and locally, certain information may not be available, updated or publicly accessible.

 

Key online databases

Scope

Database

National

www.segemar.gov.ar

National

 

http://cima.minem.gob.ar

 

Unified cadastre

https://sig.se.gob.ar/visor/visorMineria.php

Province of San Juan

https://datosabiertos.sanjuan.gob.ar/dataset/catastro-minero-digital-google-earth

Province of Catamarca

http://www.mineria.catamarca.gov.ar/sitmin.html

Province of Salta

http://geoportal.idesa.gob.ar/maps/648

Province of Jujuy

http://www.mineriajujuy.gob.ar/site/jam_catastro.php

Province of Rio Negro

http://mineriaide.rionegro.gov.ar/maps/19

Province of Neuquén

http://hidrocarburos.energianeuquen.gov.ar/?page_id=270

Acquisition of rights by private parties

What mining rights may private parties acquire? How are these acquired? What obligations does the rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a mining licence?

The Argentine Mining Code (AMC) provides for two types of mining rights – exploration permits and mining concessions – both of which are granted on a first-come, first-served basis.

Exploration permits are exclusive authorisations to explore a certain area during the period and to the extent provided by the AMC. The exploration permit is opposable with regard to third parties, and holders of such will have exclusivity rights to apply for and obtain a mining concession within the area covered by this permit.

Mining concessions grant the title holder the right to conduct further exploration works after a discovery has taken place, and to exploit all mineral deposits within the boundaries of the mine. Mining concessions are not subject to a life term and, therefore, to the extent the title holder does not incur in any of the concession termination events set forth in the AMC, the concession will last until the mineral reserves are exhausted.

The two essential obligations to keep the title of a mining concession in good standing are the payment of an annual mining fee (canon) and to file and comply with an investment plan. Non-compliance with these obligations may provide for the termination of the concession.

To obtain an exploration permit, the miner needs to lodge an application including a minimum work plan, an estimate of the investments to be made and pay a provisional exploration fee. The area shall be free of previous mining rights in force. Mining concessions are granted on mine discoveries (which may or may not have an exploration permit as precedent) and mines that are vacant on account of expired concessions.

Renewal and transfer of mineral licences

What is the regime for the renewal and transfer of mineral licences?

Exploration permits are non-renewable, and no person can be granted successive permits over the same area within one year of its expiry.

The transfer of a mining rights title (or change of control) is not subject to governmental approval, although certain formalities may apply (ie, public deed in the case of surveyed mines). Once the title has been assigned, the transfer documents need to be filed with the authority, which registers this in the public registries for publicity purposes with regard to third parties.

Despite this, certain governmental approvals (border security zone, etc) may be required for the transfer (and change of control) with respect to surface lands.

Duration of mining rights

What is the typical duration of mining rights?

Mining rights in Argentina can involve exploration permits and mining concessions. Exploration permits have a limited duration and expire according to the AMC regulations because they are intended to allow for an exclusive area within the mining concession that can be applied for.

Mining concessions do not have a duration or term; they will follow a procedure to become a mine that will be in legal existence until the minerals are exhausted.

Despite this, mining concessions can be revoked if the main conditions to keep them are not fulfilled. These conditions are the annual mining fee payment and the investment. Additionally, a mining concession can eventually be revoked if a mine has been inactive for more than four years in accordance with the terms of section 225 of the AMC.

Acquisition by domestic parties versus acquisition by foreign parties

Is there any distinction in law or practice between the mining rights that may be acquired by domestic parties and those that may be acquired by foreign parties?

There is no distinction between the mining rights that may be acquired by domestic or foreign parties. Nevertheless, foreign companies need to register in Argentina as a local vehicle (incorporation of a branch or as a shareholder of a local company) to own mining rights or conduct activities that exceed the threshold of an ‘isolated act of commerce’. Also, certain restrictions and prior approvals apply to the acquisition of land by foreign entities.

Protection of mining rights

How are mining rights protected? Are foreign arbitration awards in respect of domestic mining disputes freely enforceable in your jurisdiction?

The NC provides for a general and comprehensive protection to property rights, stating that they may not be violated and no inhabitant can be deprived thereof except by virtue of a judgment. Argentina has an independent judicial system organised under the rule of law and the principle of due process. Depending on the issue discussed, the courts with jurisdiction on the matter at hand may be either national or provincial.

In addition, and from the perspective of international public law, Argentina is party to several bilateral investment treaties with different countries for the protection of foreign investments.

With regard to the enforcement of foreign arbitral awards, Argentina is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. If there is no treaty between Argentina and the relevant jurisdiction, the relevant procedural laws of each province will apply. For instance, procedural codes usually provide that to have an arbitral award recognised and enforced without further discussion of its merits it must comply with different requirements (ie, the arbitral tribunal must have had valid jurisdiction, the dispute may be validly referred to arbitration under Argentine law or the arbitral award must not violate public policy under Argentine law).

Surface rights

What types of surface rights may mining rights holders request and acquire? How are these rights acquired? Can surface rights holders oppose these requests?

Mining rights form a different property from the land in which the deposits are located, which means title to the mining rights does not entail title to the surface land. Therefore, as a general rule, the miner is not allowed to access the surface lands without the prior landowner’s consent.

In light of this, and as mining activity is considered to be of public interest, the AMC sets forth certain rights for the holder of a mining right with respect to the owner of the surface land, which comprise:

  • the right to obtain different kinds of mining easements, such as easement of road, occupation, water use and transport and infrastructure; and
  • the right to demand the compulsory sale of the surface land.

 

Technically, surface rights holders should not be entitled to oppose the request of any easement, since it would be based on the public utility of the mining activity (section 13 of the AMC). They could only challenge the compensation if considered unsuitable. Therefore, the AMC aims to provide all miners with legal tools that can be used regarding mining activities on the surface land prior to reaching an agreement with the surface landowner regarding access. Despite this, owing to the complexity of implementing these processes in practical terms, and the associated increasing community issues and social costs, it would be always advisable for both parties to reach an agreement. The analysis needs to be made case by case, although the general trend in Argentina has been to try to reach agreements with the surface land owners whenever possible on a reasonable basis.

Also, where the surface land is state-owned, miners have the right to access this land and use it without the need to pay any monetary compensation.

Participation of government and state agencies

Does the government or do state agencies have the right to participate in mining projects? Is there a local listing requirement for the project company?

As a general rule, the AMC restricts the government’s ability to exploit mining rights, although this restriction is not applicable to state-owned entities.

The AMC allows governments (or their state-owned entities) to conduct exploration works within their territory without the need for obtaining a prior permit, and have exclusive areas of special interest for mining prospecting purposes. In these cases, the AMC allows private parties to participate in these areas of interest by public tender. The successful bidder of an area may apply for one or more exploration permits or mining concessions within that area, which are to be governed by the general provisions of the AMC, notwithstanding any such further obligation that may be applicable in accordance with the tender rules.

However, to increase the share of mining profits, provincial state-owned mining entities have, for some time, shown more interest in participating in mining projects developed by private companies, a trend that has been seen in many host countries. Another trend along this line, which began a couple of years ago, is the creation of new joint ventures and associations, which may continue based on the fact that profits of the projects need to be better allocated or shared with the public, as their purpose may not necessarily be fulfilled in traditional structures.

To this end, there are many examples of interaction and partnerships of private companies with state-owned companies at provincial levels. These arrangements have been structured in different ways. Fomicruz SE (the Santa Cruz state-owned mining company) is a 7 per cent shareholder of Cerro Vanguardia SA, the holder of a gold and copper project in the province that has been in production since 1997. Additionally, Fomicruz SE  is also connected to Patagonia Gold and Yamana Gold in their Cerro Moro project. In the case of the Bajo de la Alumbrera gold and copper deposit located in the province of Catamarca, the mining rights are owned by YMAD, a company owned by the province of Catamarca and the National University of Tucuman, and there has been an exploitation agreement in place already for 20 years as one of the key pieces in the legal structure of this project.

In the province of Jujuy, JEMSE has shown interest in participating in lithium projects, as is already the case for the Sales de Jujuy project in partnership with Orocobre. The by-laws of JEMSE allow, in general, for partnerships that could be structured legally in different ways. In the Sales de Jujuy project, JEMSE holds 8.5 per cent of the company’s shares.

We are of the view that the evolving trend in this respect and in several provinces will continue.

Government expropriation of licences

Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?

The NC provides that expropriation for reasons of public interest must be necessarily established by law and previously indemnified. This constitutional guarantee applies to all significant interests that a human being or a legal entity can possess (including mining rights). Furthermore, section 16 of the AMC provides that mines might be expropriated only for reasons of public interest of a higher level than the privilege recognised to them under section 13 of the AMC, which states that the exploration, exploitation and concession of mines have the status of public benefit.

Law No. 21,499 regulates the procedure applicable to expropriations decided at the national level. According to this regulation, the indemnification for expropriation only comprises the objective value of the asset or right and those damages that are a direct and immediate consequence of it. If no settlement agreement is reached on the value of the expropriated property, the matter shall be decided by a judicial court. Provinces have their own expropriation rules, in line with the national rules.

There are no specific rules for valuation and indemnification of expropriated mining rights.

Protected areas

Are any areas designated as protected areas within your jurisdiction and which are off-limits or specially regulated?

National Parks Law No. 22,351 prohibits the performing of any kind of economic activity (except tourism) within certain protected areas located in the Argentine territory. Mining activities are specifically prohibited therein, as well as in the establishment of industrial sites. Note also that there are many areas considered ‘protected areas’ or ‘reserve areas’ regulated locally within the boundaries of each province that may allow activities or restrict them in some way (including mining activities); this is a matter that requires case-by-case analysis. An example is the reserve area of Los Andes in the province of Salta that comprises quite a number of projects, including lithium projects. On 3 August 2018, the Secretariat of Environment of the province of Salta enacted Resolution No. 428/18 approving the Management and Development Plan for the Los Andes Reserve which, in general terms, categorises the zones in which certain activities shall be restricted or prohibited.

In addition, Law No. 26,639 on Minimum Standards for the Preservation of Glaciers and Periglacial Environments establishes a general prohibition rule that bans the development of all those activities that negatively affect the natural condition of glaciers, involving destruction, removal or interference with their progress. Mining exploration and exploitation activities are specifically prohibited. No further development has been made in relation to the execution of the national inventory of glaciers because only Stage 1 has been published; Stages 2 and 3 are pending completion.

Special reference must be made to Provincial Law No. 3,105 of the province of Santa Cruz, enacted in 2009, which created an area of special mining interest (within which it is allowed to conduct mining activities). The law also identifies certain areas that are excluded from the Area of Special Mining Interest Law.

In 1991, Argentina ratified the Convention on Wetlands of International Importance (the Ramsar Convention) and therefore committed to the rational use of internationally protected wetlands and hydric resources in its territory through national management plans, policies and legislation. Additionally, pursuant to the Ramsar Convention each contracting party has agreed to promote the conservation of wetlands and related fauna and flora by establishing nature reserves on wetlands and executing a wetlands inventory. In Argentina, there are 23 sites declared 'Ramsar sites’, as defined pursuant to the Ramsar Convention.

Notwithstanding the foregoing, no specific law or regulation, whether national or provincial, is currently in place in Argentina regarding the regulation of activities on wetlands, or any other wetlands regulation that would prohibit mining activities or other productive activities that are beneficial for the regional economy. There have been several attempts to pass national legislation regarding wetlands protection, but none have been successful.

Law stated date

Correct on

Give the date on which the information above is accurate.

8 April 2020.