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Mining industry


What is the nature and importance of the mining industry in your country?

There is a large potential in different geological provinces for mining projects of world-class magnitude. With only 25 years of consistent though not continuous mining exploration, bulk mineable ore bodies for copper-gold-silver-lithium (specially in brines) have been identified, resulting probably in one of the largest undeveloped resources within Latin America today.

In accordance with official data recently published by the Ministry of Energy and Mining, the mining industry represented only 1 per cent of national GDP in recent years. However, the trend and forecast indicate that the mining sector’s overall contribution to the country’s GDP will increase by 3 or 4 per cent in 2025 as projects in the portfolio start being developed and new funds from foreign direct investment are allocated to greenfield exploration.

After many years of unreliable official industry statistical information, the current administration has been producing and publishing credible and reliable economic and geological data.

Pursuant to a report made in 2018 by the Argentine Chamber of Mining Enterprises, in 2017 the mining industry contributed US$3,774 million to the economy, increasing by 4.2 per cent compared with 2016. Total mining exports in 2017 increased by 6 per cent, totalling US$4,143 million.

Target minerals

What are the target minerals?

The main target minerals in Argentina were and still are copper, gold, silver and lithium, this last mineral with an increasing interest in the past couple of years. Other targeted minerals include potash, iron, aluminium, uranium, boron, molybdenum lead and zinc.

During the past few years, and particularly in 2016-2017, there has been an increased interest in minerals used in battery technology and renewable energy such as lithium, cobalt and manganese in the main. The increasing trend worldwide regarding lithium has also taken place in Argentina. The country is part of the ‘lithium triangle’, together with Chile and Bolivia, and is considered potentially the third-largest producer of lithium in the world; therefore the interest in this mineral will continue to increase. Owing to different regulatory schemes both in Chile and Bolivia, which are more restrictive, Argentina has gained a very strong position as a target for investors in this mineral.

Additionally and in recent years there has been a growing interest in fracking sands, intended to supply the needs of Argentina’s flagship shale oil and gas deposit Vaca Muerta.


Which regions are most active?

The majority of mining deposits in Argentina are concentrated alongside the Andes Mountains, which are one of the most important sources of mineral resources in the world. In addition, in the Deseado massif located in the Patagonian province of Santa Cruz there are many significant mining resources.

Consequently, the most active and traditional provinces in the mining industry are San Juan, Catamarca, Salta, Santa Cruz and more recently Jujuy (in connection with lithium), where the main producing mines are located. In terms of mining exploration (including early and advanced stages) are the provinces of San Juan, Santa Cruz, Salta, Jujuy and Rio Negro and Chubut.

Legal and regulatory structure

Basis of legal system

Is the legal system civil or common law-based?

The legal system in Argentina is civil-law based. The system is mainly based on its pillars which are the National Constitution (NC) and the National Civil and Commercial Code (NCCC).


How is the mining industry regulated?

Argentina is organised as a federal republic, consisting of 23 autonomous provinces and the autonomous city of Buenos Aires, organised under the NC. Each province enacts its own provincial constitution. As a result, the mining industry is regulated at national, provincial and municipal levels.

In accordance with the NC, the provinces are the original owners of the natural resources existing in their territories. Therefore, while the National Congress enacts the substantive mining legislation, through the Argentine Mining Code (AMC) and related legislation, the provinces are empowered to regulate the procedures related thereto (which cannot conflict with substantive legislation) and enact complementary regulation, which includes environmentally protected areas. Municipal governments have jurisdiction in regulating related issues.

What are the principal laws that regulate the mining industry? What are the principal regulatory bodies that administer those laws? Were there any major amendments in the past year?

The principal law that regulates the mining industry is the AMC, which governs the rights, obligations and procedures regarding the exploration, exploitation and use of mineral substances. The AMC sets forth the legal framework that rules the relationship between the state and the miner (through an exploration permit or a mining concession) and between the miner and third parties.

In relation to the regulatory bodies administering the legal framework, it depends on whether the legislation is national, provincial or municipal. The provinces are the granting authorities of mining rights. Depending on the administrative structure of each province, the rele­vant provincial mining authority may either be a mining directorate within the provincial executive branch, or a mining court within the provincial judicial branch.

Additionally, there are other key regulations at the national and provincial levels that constitute the legal mining framework, such as:

  • the provincial Proceedings Mining Codes;
  • the Mining Investment Law No. 24,196, as amended by Law No. 25,161 (MIL);
  • the Federal Mining Agreement, approved by Law No. 24,228, recently amended by the New Federal Mining Agreement (though subject to its ratification by the National Congress and provincial legislatures); and
  • Resolution No. 110/2017 of the National Secretariat of Mining, which abrogates Resolution No. 12/2012 and Resolution No. 13/2012.

It is also important to mention other material regulations that, although not being of a strictly mining nature, affect the industry, which are as follows:

  • national and provincial environmental regulations;
  • Archaeological and Paleontological Heritage Protection National Law No. 25,743;
  • border zone restrictions;
  • Rural Lands Law No. 26,737;
  • provincial zoning laws;
  • Public Private Partnership Law No. 27,328 (PPP Law); and
  • Anti-Corruption Law No. 27,401.

Major amendments to the mining legal framework over the past year include the following:

  • Resolution No. 110/2017 of the National Secretariat of Mining, which abrogated Resolution No. 12/2012, Resolution No. 13/2012 and Resolution No. 54/2012, that established the obligation for beneficiary companies of the MIL to hire national freight services for the export operation of minerals or derived products. Additionally, Resolution No. 110/2017 established that new mining projects and expansion projects seeking to request the benefit of fiscal stability contemplated in section 8 of the MIL must submit, along with the project’s feasibility study, a Participation in National Industry Plan, and also the beneficiary companies are requested to provide information on purchases and contracting of capital goods, equipment, parts or components elements of said goods, inputs, services and a project for substitution of imports;
  • the New Federal Mining Agreement signed on 13 June 2017 sets general principles and guidelines for the mining sector. The signatory parties are the federal government and the Argentine provinces, except for the provinces of La Rioja, Chubut, La Pampa and San Luis. The agreement intends to make uniform the different rules and practices adopted by the provinces for the mining sector in past years and it intends to modify some provisions of the AMC and the MIL. However, all the provisions of the Federal Mining Agreement that require legislative approval or ratification to be in force or operative must become in force with the approval of the federal congress and each of the provincial legislative bodies, as applicable. It is foreseen that the federal congress will approve these provisions during 2018;
  • although not specifically for the mining sector, the regime established by the PPP Law was approved in 2016 and regulated in 2017. The regime sets forth a new tool for infrastructure development in the country. PPP is conceived as a new alternative regime for public construction works, different from the traditional system. The PPP projects announced by the federal government are related to transport infrastructure (construction and amendments of roads and highways) and extension of existing power transmission lines, among others. These significant projects, once finalised, could improve the infrastructure for many mining projects. In addition, once the PPP regime is consolidated it could be used for mining-related infrastructure as well and become an important tool to foster mining development in certain areas of the country;
  • also unrelated specifically to mining, although very relevant for all industries, in 2017 the Argentine Anti-Corruption Law No. 27,401 was enacted and established a corporate criminal liability regime for offences against public administration and for international bribery. The legal entities involved in the offences described in the regime are liable for the crimes committed. To avoid being held liable, legal entities must show that the individual who committed the crime acted on his or her exclusive benefit and that the company did not benefit from such act. Also, the legal entity shall not be subject to any sanction or administrative liability when all the following circumstances are present:
  • self-reporting as a consequence of an internal investigation;
  • existence of an adequate compliance programme in place prior to the occurrence of the offence; and
  • refunding of the monies illegally obtained;

Finally, the Anti-Corruption Law states that legal entities must have an adequate compliance programme in place; and

  • in February 2018, the provincial government of the province of San Juan enacted two provincial laws that foster and promote mining activity. Provincial Law No. 1722-M created a provincial incentive fund for mining entrepreneurs that will encourage and help projects at the exploration stage aiming to invest in mining entrepreneur activities through corporate and other types of participation or investment in new projects. Provincial Law No. 1723-M established a mining promotion regime, exempting mining exploration companies from paying provincial taxes such as gross incomes and stamp taxes, among others. Such exemptions are provided only from the exploration stage of the project until the production date.

Classification system

What classification system does the mining industry use for reporting mineral resources and mineral reserves?

Argentina lacks specific regulation in this field. Local geologist associations have been lobbying - with the support of professional bars and industry chambers - for the implementation of an Argentinian code on classification and reporting of mineral resources and mineral reserves, based on the guidelines and standards set forth by the Committee for Mineral Reserves International Reporting Standards.

Notwithstanding the foregoing, since the vast majority of investments in the mining industry are undertaken by foreign companies, the resources and reserves of Argentinian-hosted projects are usually classified and reported by the controlling entities in accordance with the system in force in their place of incorporation or listing (mostly Canada or Australia).

It is relevant to note, however, that there are ongoing negotiations between chambers of commerce and the Comisión Nacional de Valores (the capital markets regulator) to develop guidelines in this respect.

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?

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 by way of a legal concession.

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

Surface landowners lack proprietary rights over the mineral deposits, which may only be obtained by means of a legal concession. Exception is made with regards 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 a 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 the Argentinian 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 all the mining and geological information produced, with the exception of that which qualifies as confidential.

Even though the information should be publicly available, in practice access to it may not be direct or straightforward. It is expected that this situation will be improved in the coming years.

In addition, certain provinces make material mining cadastral information available and some of them provide a mining cadastral map online.

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 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 such permit.

Mining concessions grant the title holder the right to conduct further exploration works after a discovery has taken place, and to exploit all the in-place 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 extinction of the mineral reserves.

The two essential obligations to keep the title of a mining concession in good standing are the payment of an annual mining fee and the lodgement of and compliance with an investment plan. Non-compliance with these obligations provides 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 not renewable, and no person can be granted successive permits over the same area within one year from its expiry. Mining concessions are not subject to a life term, thus they do not need to be renewed.

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 such in the public registries for publicity purposes with regard to third parties.

Notwithstanding the foregoing, certain governmental approvals 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?

As explained in question 10, mining rights can involve exploration permits and mining concessions. Exploration permits have a limited duration and expire according to the AMC regulations since they are intended to allow for an exclusive area and within such mining concessions can be applied for.

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

Notwithstanding this, mining concessions can be revoked if the main conditions to keep them are not fulfilled. These conditions - as explained in question 10 - 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) in order 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 based on law. 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 may be either national or provincial.

With regards to the enforcement of foreign arbitral awards, Argentina is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958. Should there be no treaty between Argentina and the relevant jurisdiction, the relevant procedural laws of each province shall apply. For instance, procedural codes usually provide that in order 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 Argentinian law, or the arbitral award must not violate public policy under Argentinian 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, thus title to the mining rights does not entail title to the surface land.

The AMC allows for different kinds of mining easements, such as easement of road, occupation, water use and transport, infrastructure and any other necessary use of land that would allow for an easement placement.

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. They could only challenge the compensation if considered unsuitable. Therefore, the AMC sets forth certain legal tools in favour of the miner for purposes of achieving access to the surface lands, such as the right to obtain easements (use and occupation, road, water) and even the right to demand the compulsory sale of the surface land. Notwithstanding the foregoing, owing to the complexity of implementing these processes in practical terms, and the increasing reputation and social costs associated, it is always advisable for both parties to reach an agreement.

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?

The AMC restricts - as a general rule - the government’s ability to exploit mining rights, although such 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 of 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.

Note that to increase the share of mining profits, provincial state-owned mining entities have started to show more interest in participating in mining projects developed by private companies. A trend along this line with new joint ventures and associations started a couple of years ago and may still continue based on the fact that profits of the projects need to be better allocated or shared with the public, which purpose may not necessarily be fulfilled by this structure.

In addition, and in certain provinces (eg, Jujuy) that may consider certain minerals as strategic (eg, lithium), this also provides grounds for the provincial state to participate in the project.

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 the expropriation only comprises the objective value of the asset or right and those damages that are a direct and immediate consequence thereof. 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 ones.

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 Argentinian 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 a 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.

In addition, National 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. In May 2018, the national inventory of glaciers, stage 1, was published by Argentina’s Institute of Nivology, Glaciology and Environmental Sciences (IANIGLIA). Final work will require stages 2 and 3.

Special reference must be made to 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.

Duties, royalties and taxes

Duties, royalties and taxes payable by private parties

What duties, royalties and taxes are payable by private parties carrying on mining activities? Are these revenue-based or profit-based?

Argentina is organised as a federal country, in which the taxing power is distributed between the national government and the provinces. In addition, municipalities also hold taxing power faculties with limited scope.

As a general rule, entities carrying on mining activities in Argentina are subject to the general taxation framework applicable to all companies, which comprises income tax, VAT, alternative minimum income tax, gross turnover tax, etc.

With regards to specific duties payable by the mining sector, the provinces, as owners of the mineral resources, are entitled to collect a royalty payment to be calculated as a percentage of the pithead value of the mineral extracted. The MIL capped the royalties to be collected by the provinces at 3 per cent. Provinces that have adhered to the MIL - which most have - are legally committed not to exceed this cap.

Export taxes on mineral concentrates and gold bullion have recently been removed.

It is worth noting that some provinces have been considering increasing the mining royalty, although from a legal perspective this would require that the relevant province waives its adherence to the MIL. In recent times, provinces had also initiated a trend to create additional taxes or fees in order to participate to a more significant degree in the benefits of the projects.

Tax advantages and incentives

What tax advantages and incentives are available to private parties carrying on mining activities?

The MIL establishes a promotional regime that provides for certain tax incentives and benefits for companies duly registered thereunder, which has proven to be especially useful for large-scale mining projects.

The main features and benefits of the MIL are as follows:

  • tax stabilisation: 30 years of tax stabilisation;
  • cap on royalties: 3 per cent on the pithead value;
  • income tax benefits:
  • deductibility benefits: right to deduct each year from their income tax return 100 per cent of the amounts invested in prospecting, special research, mineral and metallurgical tests, pilot plants, applied research and other works performed for the purpose of determining the technical and economic feasibility of a project. In the cases of expansion of existing projects or starting new projects, the above-mentioned deductions may be recognised in the fiscal year in which production commences. In addition, beneficiaries are allowed to deduct provisions of cost to prevent and remedy any environmental damage derived from their activity up to 5 per cent of their operational costs;
  • accelerated depreciation benefits: investments in housing, transport, construction of plants and equipment in connection with the necessary infrastructure for mining activities (including gas pipelines, transmission lines, roads) may be depreciated within three years, in accordance with certain rules;
  • capital contributions: any income derived from the contribution of mines and mining rights as payment for the subscription of shares of registered beneficiary companies are exempt from income tax. Such contributions must be maintained on the beneficiary’s books for a minimum term of five years, except where otherwise authorised by the National Mining Authority. The relevant capital increase and issue of shares is exempt from stamp taxes;
  • VAT benefits: beneficiaries that purchase or import new capital assets or services that are directly or indirectly applied to mining activities may obtain a relief in the financial impact of VAT by means of two special mechanisms:
  • advance VAT reimbursement; or
  • interest-free loan;
  • import benefits: exemption on duties and other charges in relation to the import of capital assets associated to local projects; and
  • other tax benefits: assets associated to mining projects under the MIL are exempt from alternative minimum presumed income tax.

In addition to the federal advantages, most Argentine provinces foresee the following:

  • exemption or reduced gross turnover tax rates on the local commercialisation of minerals;
  • export of minerals is not subject to gross turnover tax in any province; and
  • stamp tax exemptions.

The scope and extension of each benefit depends on each jurisdiction.

Tax stablisation

Does any legislation provide for tax stabilisation or are there tax stabilisation agreements in force?

The MIL provides a 30-year tax stability applicable to the project’s tax burden in force as at the filing of a feasibility report. The MIL works as a general framework applicable to all mining companies that comply with its requirements. There are no tax stabilisation agreements.

Consequently, the total tax burden applicable to the project at the national, provincial and municipal levels will not be increased as a result of any new tax, duty or charge. The benefit works as a cap, thus if taxes are abrogated or tax rates decreased, stabilised projects will bene­fit from those changes.

General information exchange regimes and customs duties regulations are likewise included in the law (except for exchange rate, reimbursements and refunding of taxes as a result of exports that are governed by different specific laws). Indirect taxes (eg, VAT and excise taxes) and social security contributions are excluded from the tax stability benefit.

Carried interest

Is the government entitled to a carried interest, or a free carried interest in mining projects?

The government does not have carry rights in mining projects. Nevertheless, it had become common practice in certain provinces that mining rights were awarded to state-owned companies, which in turn entered into farm-out or option agreements with private third parties and retained free carry rights or options over these properties or over the vehicles through which these were held.

Transfer taxes and capital gains

Are there any transfer taxes or capital gains imposed regarding the transfer of licences?

The transfer of mining rights is subject to capital gains tax, which varies depending on the status of the seller. This tax also applies if the transfer is accomplished by transferring the shares of the Argentine vehicle.

Distinction between domestic parties and foreign parties

Is there any distinction between the duties, royalties and taxes payable by domestic parties and those payable by foreign parties?

There are no substantial distinctions between resident and non-resident investors from an Argentine tax perspective. The only factor that could lead to tax differentiation is for business entities or vehicles resident in non-cooperative jurisdictions with tax transparency (as a general rule, this includes those with which Argentina does not have an in-force convention for information exchange or is not in the course of negotiating an international treaty including an information exchange clause).

Business structures

Principal business structures

What are the principal business structures used by private parties carrying on mining activities?

There are different business vehicles available to conduct mining activities under Argentinian law, although the structures most commonly used are the sociedades anonimas (SA) (similar to corporations) and branch offices.

The advantages that derive from the use of SAs are related to the share structure and therefore flexibility in transfer and related arrangements and the isolation of responsibility. In turn, branches enjoy certain advantages over SAs (eg, there is no requirement of having at least two shareholders, neither of having a majority of residents in Argentina to form the board).

There were two recent business vehicles added to the regulatory regime: the SAU (sociedad anónima unipersonal) or single shareholder corporation and the SAS (sociedad anónima simplificada) or simplified corporation.

The SAU was foreseen by the NCCC, enacted in 2015. This vehicle would stand as a good alternative for foreign investors, since only one shareholder is required (in contrast to SAs, which require at least two). Also, intercompany funding may not prove as flexible as in other entities.

The SAS entered into force in September 2017. With lower complexity and administration costs and greater flexibility to regulate internal corporate affairs, it is considered an additional vehicle option. The SAS can be incorporated by digital means and its mandatory book and records should be identified and kept by the General Inspector of Corporations by electronic means.

Local entity requirement

Is there a requirement that a local entity be a party to the transaction?

This is required for foreign companies in order to own mining rights or conduct mining activities, their registration in Argentina as a local vehicle or to participate in a local company.

Bilateral investment and tax treaties

Are there jurisdictions with favourable bilateral investment treaties or tax treaties with your jurisdiction through which foreign entities will commonly structure their operations in your jurisdiction?

Argentina has subscribed to over 50 bilateral investment treaties for the reciprocal protection and promotion of investments. If a dispute under these agreements cannot be settled amicably, the national or private company concerned may choose to submit the dispute for resolution in the courts of the party that is a party to the dispute; or for settlement by binding arbitration either at the International Centre for Settlement of Investment Disputes or in accordance with UNCITRAL arbitration rules. Australia, Canada, China, Russia, the UK and the US are some of Argentina’s counterparties. Additionally, as a member of the WTO, Argentina has participated as an observer to the Investment Committee of the OECD and is a member of the Multilateral Investment Guarantee Agency.

Argentina has also entered into double taxation treaties with: Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Russia, Spain, Sweden, Switzerland, the United Arab Emirates (already signed, though not in force) and the UK. Under these treaties, reduced withholding rates are contemplated for dividends, royalties, interest and capital gains or business profit clauses for types of income not specifically treated.


Principal sources of financing

What are the principal sources of financing available to private parties carrying on mining activities? What role does the domestic public securities market play in financing the mining industry?

Argentina has no developed capital market to allow the funding of mining companies.

Most mining companies conducting mining activities in Argentina are controlled by foreign entities, and therefore the financing of local projects is mostly obtained by the companies’ headquarters in overseas jurisdictions. Usually, exploration activities are funded by equity finance in the Toronto Stock Exchange (TSX), TSX venture exchange, the Australian securities exchange and London’s alternative investment market. At a production stage, besides equity finance, corporate debt (by the controlling entities) and project finance have played a role in Argentina’s largest producing mines.

Resource-orientated private equity funds as well as streaming and royalty finance companies also provide funding to the sector.

Additionally and most recently, end users have become a source of financing specially in lithium-related projects.

Direct financing from government or major pension funds

Does the government, its agencies or major pension funds provide direct financing to mining projects?

There are no local agencies or pension funds providing specific financing to the sector. However, certain credit facilities for the acquisition of capital assets may be obtained from the local banking sector.

Security regime

Describe the regime for taking security over mining interests.

Mines that are surveyed are capable of being mortgaged, owing to the fact they are considered ‘real estate’ properties. These mortgages comprise related easements. Mortgages must be passed into public deeds and registered with the relevant mining authority.

In the case of exploration permits and mining concessions of mines not yet surveyed, it is not legally possible to grant a mortgage over such rights as these do not qualify as real estate properties, Nevertheless, other rights may be granted for purposes of securing these assets (eg, pledges of the local vehicle shares and guarantee trusts, among others).


Importation restrictions

What restrictions are imposed on the importation of machinery and equipment or services required in connection with exploration and extraction?

In the past, Argentina had an overall import-restrictive policy (not specifically targeted at the mining industry), but this has been gradually removed and relaxed by the current national administration.

In general terms, there are no specific restrictions on the importation of machinery and equipment or services for the mining industry. Nevertheless, National Mining Secretariat Resolution No. 110/2017 abrogated Resolution No. 12/2012, Resolution No. 13/2012 and Resolution No. 54/2012. These resolutions created a framework applicable to mining companies registered under the MIL, aimed at prioritising the sourcing of local products and services. The new framework establishes that new mining projects and expansion projects seeking to request the benefit of fiscal stability contemplated in section 8 of the MIL must submit, along with the project’s feasibility study, a Participation in National Industry Plan, and also the beneficiary companies are requested to provide information on purchases and contracting of capital goods, equipment, parts or components elements of said goods, inputs, services and a project for substitution of imports.

Standard conditions and agreements

Which standard conditions and agreements covering equipment supplies are used in your jurisdiction?

There are no specific standard conditions and agreements covering equipment suppliers that are used in Argentina. However, it is worth noting that Resolution No. 110 issued by the Secretary of Mines, currently in force, refers to mandatory submission of a Participation in National Industry Plan, along with the project’s feasibility study and also to provide information on purchases and contracting of capital goods, equipment, parts or components of said goods, inputs, services and a project for substitution of imports.

In addition, the provinces usually have their local procurement regulations that also need to be addressed.

Mineral restrictions

What restrictions are imposed on the processing, export or sale of minerals? Are there any export quotas, licensing or other mechanisms that prevent producers from freely exporting their production?

As a general rule, there are no restrictions on the export of minerals. Exception is made with regards to the export of nuclear minerals, concentrates and derivatives, which enjoy special treatment.

Import of funds restrictions

What restrictions are imposed on the import of funds for exploration and extraction or the use of the proceeds from the export or sale of minerals?

The inflow and outflow of funds to and from Argentina is subject to a complex set of foreign exchange (FX) regulations that are subject to constant change. Argentina’s current administration has removed and relaxed material FX restrictions. Moreover, the FX policy of the new administration provides for certainty and clarity on regulations and their application.

As a general rule, FX transactions (the purchase, sale and cross-border transfer of foreign currency) in Argentina can only be made in the local FX market upon prior authorisation of the Central Bank, except for those transactions specifically foreseen under the FX regulations that may be conducted without prior authorisation.

There is no restriction on the inflow of funds resulting from capital contributions or indebtedness, although such funds are required to meet a 120-day minimum mandatory waiting period in order to be repatriated. It is worth noting that the current administration has recently removed the ‘mandatory deposit’, which provided for an interest-free mandatory deposit for 365 calendar days of 30 per cent of the funds transferred into Argentina (unless a specific exemption applied to the case).

With regards to the proceeds from the export of minerals, Argentine residents are required to repatriate to Argentina and sell these proceeds in the local FX market. Nonetheless, companies will be allowed to then repatriate these amounts to their jurisdictions by means of dividends payable by the local vehicle to its shareholders or by servicing intercompany debt, where applicable.


Principal applicable environmental laws

What are the principal environmental laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

The NC and specific Minimum Standards Laws such as the General Environmental Law No. 25,675 are the main sources of environmental legislation, together with the following:

  • the Complementary Title of the Environmental Protection for Mining Activity of the AMC, as amended by Law No. 24,585;
  • the Complementary Rules approved in 1996 by the Federal Council of Mining; and
  • provincial local procedural regulations.

Additionally, there are also many other national and provincial environmental protection regulations (eg, on hazardous and industrial wastes, protection of archaeological and paleontological heritage, water effluents and gas emissions, and conservation of natural resources, flora and fauna).

Regarding regulatory and enforcement authorities, according to article 41 of the NC, the national government must issue basic regulations containing minimum standards on environmental protection, natural resources, natural and cultural heritage, biological diversity, and environmental information and education, while the provincial governments must issue the provisions required to complement said basic regulations in order to effectively implement the protection provided by the NC, adapting them to their own environment and development modalities and peculiarities. At a national level, the environmental legal framework is administrated by the Ministry of Environment and Sustainable Development. At a provincial level, and regarding the mining industry in particular, the environmental and enforcement authorities are, in certain cases, the mining authorities themselves.

Environmental review and permitting process

What is the environmental review and permitting process for a mining project? How long does it normally take to obtain the necessary permits?

According to the AMC, as amended by Law No. 24,585, prior to the commencement of any of the different phases of mining activity, an environmental impact report (EIR) shall be submitted to the relevant provincial enforcement authority, provided that, until approval has been obtained, no mining activity shall be performed.

The EIR shall be assessed with a technical, scientific and legal administrative process of analysis and assessment and once the process has concluded, the enforcement authority shall issue an environmental impact statement (EIS), containing the terms under which the activity shall be performed in connection with the environment, the community and the authority. In some cases, the environmental authorisation requires summoning the affected community to an obligatory public hearing, although the opinions or objections of those attending do not force administrative decisions.

The specific procedural rules applicable to the authorisation process, as well as the time it might take to obtain the relevant permit, vary from province to province.

It must also be mentioned that the EIS must be updated - at least every two years - through the filing of a new EIR containing the results of executed environmental actions, as well as any new factors that have been generated.

Closure and remediation process

What is the closure and remediation process for a mining project? What performance bonds, guarantees and other financial assurances are required?

According to the AMC, the environmental protection rules established by Law No. 24,585 are applicable to all those activities related to the closure of the mine. At a national level, there are no detailed specific rules for closing procedures. Only Annex III of the Complementary Rules of the AMC (which determines the contents of the EIR for the exploitation stage) establishes that an environmental management plan shall include: ‘Actions concerning the cessation and abandonment of the exploitation and post-closure monitoring.’

Nonetheless, at a provincial level and as a first mover, the province of Catamarca enacted in 2016 a regulation that foresees specific rules for closing procedures. It includes a guide to be followed for the preparation of the mine closure plan with technical and economical requirements to be submitted before the mining authority at the commencement of the mining activity and that should include a closure procedure for each stage of the mining project, which must be updated every two years once approved.

In addition, the New Federal Mining Agreement, if ratified by the federal and provincial legislative bodies, would seek to regulate and established a regime for mine closure.

Under the AMC regime, no specific bonds, guarantees or assurances are required. Note, however, that the MIL requires companies to allocate an annual amount to a reserve fund to finance prevention and remediation tasks. The amount of this reserve is left to the decision of the mining company. In addition, as a general requirement foreseen under Law No. 25,675, environmental insurance needs to be taken out by any company conducting activities that might involve a risk to the environment. The new Catamarca regulation provides the granting of a guarantees and financial assurances.

Restrictions on building tailings or waste dams

What are the restrictions for building tailings or waste dams?

The construction and operation of tailings or waste dams are mostly subject to local regulations, which may vary from province to province. National regulations contained in the AMC establish certain general principles concerning technical conditions applicable to mining exploitation, though with a low degree of detail. As regards alarm systems and emergency drills, the AMC provides that in the event of an accident or whenever there is reason to fear that a serious accident might occur, the manager of the mining project shall notify the mining authority without delay. The mining authority will then decide the urgent necessary measures to be adopted to eliminate all danger or mitigate existing damage. At the same time, the mining company shall observe its own action plan for environmental contingencies, which shall be submitted and approved as a condition precedent to obtaining the relevant environmental permit. Again in this respect, it shall be noted that specific requirements concerning emergency drills and responsibilities related to the rescue of people may vary from province to province, since national rules do not regulate such. Furthermore, it must be noted that according to the AMC, the relevant mining authority shall visit once a year (at least) the mining projects subject to its jurisdiction and, additionally, when it becomes aware of an accident or of any violation of applicable regulations. Above this minimum, each provincial mining authority has its own inspection schedule that is managed according to its own criteria of opportunity and need.

Health & safety, and labour issues

Principal health and safety, and labour laws

What are the principal health and safety and labour laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

Health and safety at work in Argentina is governed by Law No. 19,587 and Decree No. 351/1979, as amended. In addition, the mining industry has specific rules established under Decree No. 249/2007.

Labour Contract Law No. 20,744 is the main source for regulating employer and employees’ relationships in Argentina. This law governs the relationships of all workers independently of their nationality and place of execution of the labour agreement as long as the activities are conducted in Argentina.

Other sources of regulation are the NC and applicable international treaties, the Employment Injuries Act and the Collective Bargaining Agreement Act. Local and specific industry collective bargaining agreements should also be considered.

The enforcement authorities of these regulations are the National Superintendence of Work Risks, the National Ministry of Labour, Employment and Social Security and the relevant provincial authorities.

Management and recycling of mining waste

What are the rules related to management and recycling of mining waste products? Who has title and the right to explore and exploit mining waste products in tailings ponds and waste piles?

Management of industrial waste products is mainly regulated by Law No. 24,051 of Hazardous Wastes, to which most of the provincial jurisdictions have adhered, and Law No. 25,612 of Integrated Management of Industrial Wastes and Services Activities, which provides the minimum mandatory standards of environmental protection applicable to waste derived from industrial processes or from service-related activities.

There are other relevant environmental provisions such as: Law No. 23,922, which adopts the Basel Convention governing cross-border movements of hazardous waste; Law No. 25,018, which provides the minimum standards on management of radioactive waste; Law No. 25,670, which provides the minimum standards on management of polychlorinated biphenyls; Law No. 25,916, which provides the minimum standards on management of household waste; and Law No. 26,011, which adopts the Stockholm Convention on persistent organic pollutants.

Title holders of mining concessions have the right to exploit the wastes generated by the mining exploitation, in compliance with the applicable environmental rules. Additionally, even when the AMC contains general provisions referring to the possibility of having third parties conducting mining activities over wastes products, note that this is not common practice and moreover it is to be stressed that such provisions were established a century ago for more basic mining operations and may not be appropriate today for large-scale mining projects.

Use of domestic and foreign employees

What restrictions and limitations are imposed on the use of domestic and foreign employees in connection with mining activities?

Foreign workers must obtain a residence permit from the Argentine national migrant authorities. A temporary residence permit for migrant workers is granted for a limited period. Applicants of this type of permit must comply with certain conditions, including being sponsored by a local company (which needs to be registered with RENURE). Nationals of the Southern Common Market (eg, Brazilians) do not need to be sponsored by local companies.

Additionally, certain provinces establish a mandatory minimum threshold of local employees to be hired by mining companies.

Social and community issues

Community engagement and CSR

What are the principal community engagement or CSR laws applicable to the mining industry? What are the principal regulatory bodies that administer those laws?

No specific CSR regulations are in force at the national level applicable to mining companies. Exception is made regarding those liabilities and obligations foreseen under the general environmental legal framework.

Note that the national mining authority announced its intention to create an environmental and social responsibility fund, which should be funded with private contributions of 1 per cent of mining exports, payable by the mining companies. No further details regarding the structure and implementation of this fund are available to date.

At the local level, is quite common that provincial and municipal governments agree with the mining companies, on a case-by-case basis, the assumption of certain commitments aimed at compensating the affected communities. As a novelty, the province of Santa Cruz created a CSR trust fund that has been subscribed to by several mining companies operating in the province.

Rights of aboriginal, indigenous or disadvantaged peoples

How do the rights of aboriginal, indigenous or currently or previously disadvantaged peoples affect the acquisition or exercise of mining rights?

Pursuant to the NC, the National Congress has to guarantee the indigenous peoples of Argentina the ownership of the lands they have been traditionally occupying and their participation in issues related to their natural resources and in other interests affecting them.

Accordingly, the recently enacted NCCC establishes that indigenous communities have the right to possess and own those lands they have traditionally occupied, as well as those other lands that might be adequate and sufficient for human development. Although this right still needs to be further regulated by a special law, it is expected - following ILO Convention 169 (ratified by Argentina through Law No. 24,071) - that the exploitation of natural resources that might have an impact on indigenous habitats would be subject to prior information and consultation of the indigenous communities concerned.

International law

What international treaties, conventions or protocols relating to CSR issues are applicable in your jurisdiction?

In 1992 Argentina ratified, through Law No. 24,071, ILO Convention 169 related to Indigenous and Tribal Peoples (1989), and has adopted the UN Declaration on the Rights of Indigenous Peoples (2007).

Moreover, and as part of soft law, International Finance Corporation performance standards are also guidelines that are being taken into account by exploration and mining companies currently investing in Argentina.

Anti-bribery and corrupt practices

Local legislation

Describe any local legislation governing anti-bribery and corrupt practices.

Argentina is a party to the Inter-American Convention against Corruption (ratified by Law No. 24,759) and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (ratified by Law No. 25,319).

Law No. 25,188 (the Statute on Ethics in the Exercise of Public Office) was enacted in order to implement the Inter-American Convention against Corruption and the Argentine Criminal Code (as amended by Laws Nos. 25,188 and 25,825) punishes bribery, meeting the standards of the OECD Convention.

Finally and specifically, Law 27,401 enacted in November 2017 creates a specific regime for anti corruption and bribery. For more details see question 6.

Foreign legislation

Do companies in your country pay particular attention to any foreign legislation governing anti-bribery and foreign corrupt practices in your jurisdiction?

Given the extraterritorial reach of anti-bribery and foreign corrupt practices regulations, and the fact that most mining companies conducting mining activities in Argentina are controlled by entities headquartered overseas, market participants - principally major mining companies - have started paying attention to these regulations.

Disclosure of payments by resource companies

Has your jurisdiction enacted legislation or adopted international best practices regarding disclosure of payments by resource companies to government entities in accordance with the Extractive Industries Transparency Initiative (EITI) Standard?

On 6 December 2017 the Ministry of Energy and Mines announced a formal request to join the EITI. Argentina is currently in a preliminary stage towards the implementation of the EITI Standard. For the global standard to be applied in the country, Argentina will need to pass legislation internalising the EITI. Prior to becoming an implementing country, Argentina must complete a few sign-up steps related to the commitment of the government, companies and civil society engagement, the establishment of a multi-stakeholder group and agreement on an EITI work plan.

Foreign investment

Foreign ownership restrictions

Are there any foreign ownership restrictions in your jurisdiction relevant to the mining industry?

There is no restriction on foreign ownership of mining rights. The Foreign Investments Law No. 21,382 establishes that foreign investors that invest in economic activities in Argentina shall have the same rights and obligations that the NC and other laws award to local investors. Nevertheless, as previously stated, foreign companies need to register in Argentina as a local vehicle to own mining rights.

In addition, Decree-Law No. 15,385/1944, as amended, establishes that the acquisition, rental or lease of real estate properties located within a security zone (mainly borderlands) by foreign companies requires prior government approval. Although there is a special exemption for mining permits and concessions, this exemption does not comprise the surface land over which the mining rights are located.

Rural Lands Law No. 26,737, as regulated by Decree No. 274/2012, also establishes certain limits to the acquisition or possession of rural lands by foreign investors.

International treaties

Applicable international treaties

What international treaties apply to the mining industry or an investment in the mining industry?

Argentina has signed more than 50 bilateral investment treaties that are applicable to the mining industry.

Specifically, in 1997 Argentina and Chile signed a Mining Integration and Complementation Treaty. The purpose of the treaty is to allow investors of each country to participate in the mining integration development of the mining projects located in the designated area of the international border, through a number of benefits such as easy border crossing and a legal framework for tax coordination. The treaty created an administrative commission that coordinates the relationship between the parties and mining investors.

Additionally, Argentina has signed memorandums of cooperation and technical assistance with Bolivia, Brazil, Canada, Chile, China, Ecuador, Germany, India, Mexico, Russia, the US, Uruguay and Venezuela, among others.