Mining industry


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

The mining industry in Chile is historically the most significant economic activity in the country. Until 2018, the mining sector constituted 10 per cent of Chilean gross domestic product, which makes this sector the most important part of the nation’s economy. Also, until 2018, this industry accounted for 5.4 per cent of all jobs in the country (direct contracts, not other wide-ranging industries related to mining). Finally, considering the income from royalties and other general taxes and duties, this sector made a 7.8 per cent contribution to national revenues.

Taking into account the above-mentioned data, it is possible to state that mining is crucial to the country, which is why legislation focuses on stimulating and protecting investments and projects.

Geographically and geologically, Chile has favourable conditions for mining activities, combining attractive mineral resources with short distances between extraction sites and exporting facilities, which, in addition to large-scale government investment in the transport infrastructure during the past 15 years, makes transit through the country fast, easy and safe.

Target minerals

What are the target minerals?

The main target metal is copper. However, there are several important projects concerning other minerals such as molybdenum, gold, silver, zinc, lead and iron.

Regarding non-metallic minerals, the most significant of which are lithium and nitrate.


Which regions are most active?

The mining industry is located mainly in the northern area of the country and spread along the Andes mountain range. The province with the highest income provided by mining is Antofagasta. Other relevant political districts in the industry include the regions of Atacama, Libertador General Bernardo O’Higgins, Tarapacá and Valparaíso.

Legal and regulatory structure

Basis of legal system

Is the legal system civil or common law-based?

The legal system is civil law-based.


How is the mining industry regulated?

Chile is a unitary country consisting of one state with a central government. Politically, Chile is divided into 16 regions; each region is divided into provinces. Within the provinces, the minimal administrative structures are the municipalities. The law has effect over the whole country and any special or territorially limited effects are the exception to the rule.

According to the Chilean Constitution, the state has exclusive ownership of all mines, except for surface clays, including:

  • guano deposits;
  • metal-bearing sands;
  • salt deposits;
  • coal and hydrocarbon deposits, fossil substances; and
  • sands, rocks and other materials directly used for construction.

The exploration and exploitation of such substances may be granted through a judicial procedure to any person or company by means of a mining concession.

Moreover, liquid and gaseous hydrocarbons, lithium or deposits of any kind in territorial waters, or deposits of any kind located in whole or in part, in areas that, by law, have been classified as important to national security with mining activities, shall be excluded from mining concessions.

The Mining Code sets the framework regarding the activity in general, whereas there are several special regulations that deal with special aspects (eg, the Foreign Investment Statute, environmental protection statutes and mine-closure procedures).

Regional governments, provinces and municipalities and other administrative entities have little or no authority over the mining sector and they are restricted mostly to grant extraction permits over surface clays, sands, rocks and other materials directly used for construction, which are located within Chilean territory under their administration.

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 most relevant laws regarding mining are as follows:

  • the Constitution of Chile, setting the cornerstone of property over every economic activity;
  • the Mining Code (Law No. 18,248), which is the main legal body regarding mining activities and sets the framework for Decree No. 1/1986, establishing the Regulation of Mining;
  • the Law of Mining Concessions (Law No. 18,097), which focuses on the mechanism of concession of the deposit;
  • the Law of Foreign Investment (Law No. 20,848), which replaces Decree-Law No. 600 and creates the new legal framework for foreign investment; and
  • the Special Tax for the Mining Industry (Law No. 20,026), which is a special regulation concerning taxation over mining activities.

The main government entity related to mining activities is the Mining and Geology National Service (Sernageomin), which approves the technical features of a project.

Regarding the new Law of Foreign Investment, it is important to note that it replaces Decree-Law No. 600, while maintaining, however, some of its benefits. Decree-Law No. 600 was one of the mechanisms established enabling capital flows into Chile. Under this optional mechanism, foreign investors were authorised to bring capital, physical goods or other authorised forms of investment into Chile, through the execution of a foreign investment contract with the Chilean state. However, under Law No. 20,848, foreign investment contracts shall not be entered into with the Chilean state - investors’ rights shall be evidenced through a certificate granted by the Foreign Investment Promotion Agency.

Classification system

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

A commission created by Law No. 20,235 established a code for the reporting of mineral resources and reserves and is comprised of mining experts and members of the public sector. The reporting code is based on that of the Australian Joint Ore Reserves Committee. It is also recognised by the Committee for Mineral Reserves International Reporting Standards.

The code defines mineral resources as a concentration or occurrence of a natural, solid, organic or non-organic fossilised material in such a form, quality and quantity that there is a rational prospect of its technical or economic potential. Moreover, the code’s concept of mineral reserve also includes the diluted materials surrounding the resource site that can also be contaminated as a mining side effect.

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?

The Chilean state has the exclusive ownership over all mines, excluding surface clays, within the territory of Chile (see question 5). The exploration and exploitation of such substances may be granted through a judicial procedure to any person or company by means of a mining concession. Both kinds of concession are given the same status as a real estate property right and any encumbrance or appropriation by third parties is susceptible to be challenged at the courts. Also, the said concession only grants rights on the mineral substances but not on the surface land in which they are located. In order to obtain the necessary rights to execute the exploration or exploitation over the surface land, the Chilean Mining Code sets forth a system of mining easements, which are granted through a judicial procedure, contemplating the necessary compensation to the surface land owner.

Also, as mentioned in question 5, liquid and gaseous hydrocarbons, lithium or deposits of any kind in territorial waters and deposits of any kind located in whole or in part in areas that, by law, have been classified as important to national security with mining effects, shall be excluded from mining concessions. Regarding the latter substances, not subject to a mining concession, they may be explored or exploited directly by the state or by one of its companies, by means of an administrative concession or by special operation contracts under the requisites and conditions set by the president of Chile specifically for each case by a Supreme Decree.

Finally, regarding surface clays, sands, rocks and other materials directly used for construction, they belong to the owner of the surface land. However, if the surface land is under public administration, such as a municipality, the municipality shall be entitled to grant extraction permits over these materials.

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?

Several agencies hold information related to geographic, economic or commercial data about the mining industry. Generally, this information is public and any private concern may request it from the relevant authority.

Among the most important information holders are the Undersecretary of Mining, Sernageomin and the Chilean Copper Commission (Cochilco).

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?

Under Chilean legislation, private parties may acquire several mining rights. These are:

  • mining claims (mining exploitation concessions under constitution process);
  • mining petitions (mining exploration concessions under constitution process);
  • mining exploration concessions (reconnaissance licences); and
  • mining exploitation concessions (mining licence).

All mining rights are acquired on a first-come, first-served basis.

Mining concessions are considered as real immovable rights, having the same legal status of a property, but only regarding the mineral substances. Also, mining concessions entitle their holders to request the necessary access over the surface land through the constitution of mining easements for both exploration and exploitation concessions, with the obligation of adequately compensating any damage to the land owner. To this rule, however, some exceptions may apply. Additionally, the exploration licence grants preferential rights for requesting an exploitation licence.

Concerning the main obligations of the rights holder, they are obliged to pay the necessary annual fee for either exploration or exploitation licences. The avoidance of complying with this obligation to obtain and comply with all the pertinent administrative authorisation such as environmental approvals, health and safety procedures, labour, taxation and municipal regulation may cause the loss of the concession.

Renewal and transfer of mineral licences

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

An exploration mining concession is granted for a period of two years and is renewable for another two years. Holding this type of concession gives priority to those applying for an exploiting mining concession, which is granted to the requesting party without a time limit. Both kinds of concession are granted after a judicial writ is submitted to the competent court. Under Chilean law, a concession is equivalent to a real estate property right, but differs as to the dominion over the land where it is constituted.

Concessions can be transferred to any private or public entity fulfilling the formal requirements, which are similar to any sale of property in the related regulation. This kind of right is also susceptible to be given as collateral to any kind of commercial operation.

Duration of mining rights

What is the typical duration of mining rights?

Regarding the duration of mining rights, see question 11. Mining concessions cannot be revoked or cancelled by the government due to the property right that its holder has over such concessions, which is guaranteed by article 19 No. 24 of the Chilean Constitution.

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 are neither special requirements nor distinctions between nationals of foreign countries or Chilean parties. As such, there is no necessity or desirability of having a domestic partner for the activity.

Protection of mining rights

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

Mining rights are protected in the same way as property rights and others of similar characteristics. There are no special courts concerning mining, because it is considered part of the general jurisdiction of the civil courts of each district.

The Chilean judicial system is independent and respectful of the rule of law and due process.

Chilean law follows the rules of the New York Convention of Recognition and Enforcement of Foreign Arbitral Awards 1958, which makes international arbitration awards fully valid and enforceable in the country.

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?

The holder of a mining concession may acquire any kind of rights contained in the Chilean legislation over the surface property. Therefore, the interested party can constitute dominion, settle easements or pact leases over it. Nevertheless, the proprietor of the surface land is entitled to ask the mining licensee to remedy any damage caused by the operation of the mine; however, he or she cannot oppose the request for mining easements.

The Mining Code also considers the possibility for a series of easements the licence holder can impose on the landowner of the surface land. Examples include the permit to transit and to construct pipelines, ports and railways, among others.

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?

There is no special right for the Chilean government and its agencies to engage in mining activities. Moreover, the relevant regulation forces the state to act through state-owned companies, which require a special law to exist and are treated commercially as if they were private companies.

There is no local listing requirement needed for mining projects.

Government expropriation of licences

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

The Chilean Constitution establishes that, only in cases where there is a public need, is it possible to proceed on expropriation of any right of particulars. In the case of a mining licence, the legislation establishes a procedure to protect and to justly determine the price of the dispossessed. The procedure is both administrative and judicial and it is designed to reduce the eventual involvement of the government in the final decision. The relevant legislation is the Organic Law of Expropriation Procedures (Decree No. 2,186 of 1978).

This piece of legislation follows the international standard for prompt, adequate and effective compensation in the case of expropriation.

Protected areas

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

There is no cohesive body of legislation containing regulations regarding protected areas. Therefore, there are several classifications of areas that are restricted to economic exploitation or human activities. This structure is made considering the location’s importance either environmentally or culturally.

These areas are well delineated by the relevant authorities, and the level of human activity they can be subject to is variable with consideration of their characteristics. Some of the protected areas allow economic activities, yet there are still specific restrictions or requirements that must be fulfilled beforehand (eg, in protected indigenous or cultural areas).

Another relevant regulation is set out in article 17 of the Mining Code, which lists several authorities from which the mining company must request permits before proceeding to extraction activities.

Generally speaking, most of the environmentally restricted areas are located in the southern provinces of the country, away from the populated centres, which, considering that the more active mining provinces are in the northern part of the country, make them of limited interest from the mining perspective.

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?

The general tax regime applicable to mining activity is dependent on the size of the operation.

Small mining operations with a maximum of five employees are subject to an overall income tax with a fixed rate calculated according to a formula that takes into account the average price of copper and the company’s sales.

Larger companies, for instance stock corporations or limited responsibility partnerships, whose annual sales do not exceed 36,000 tonnes of metallic non-ferrous minerals or 2,000 annual tax units, regardless of the type of mineral, are considered to be medium-scale.

Medium-scale mining operations are subject to a presumptive tax regime, under which the taxable income of the period is presumed to be a certain percentage of their net sales, being subject to the general tax rates. This percentage ranges from 4 per cent to 20 per cent according to the average copper price during the tax period.

Companies exceeding the previous criteria are considered large mining operations. These entities will be subject to the general income tax regime. As such, they are subject to income tax, which since 2016 is 24 per cent, and a global complementary or additional tax, depending on whether the contributor is a Chilean or foreign national.

There is a royalty, or specific mining tax, over mining activities that covers any concessionaire who extracts and commercialises minerals in any type of production. The rate of this tax is progressive and follows the volume of the company’s production. The rule is the following:

  • companies whose annual sales exceed the equivalent of 50,000 tonnes of fine copper pay a progressive rate of between 5 per cent and 14 per cent;
  • companies whose annual sales are between the equivalent of 12,000-50,000 tonnes of fine copper pay a progressive rate of between 0.5 per cent and 4.5 per cent; and
  • companies whose annual sales are equal to or less than 12,000 tonnes of fine copper are exempt from the royalty.

The value upon the tonnes of fine copper is calculated as according to the average value of grade A copper registered at the London Metal Exchange.

Finally, other duties and fees applying to any business are also applicable to mining activities. As such, these companies are subject to municipal and stamp duties and VAT.

Tax advantages and incentives

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

There is no cohesive body of legislation for the incentives to the mining activities to be found. The most relevant investment incentive is the one contained in Law No. 20,848, described in question 21.

There is a special tax regime and other minor benefits granted for mining and industrial activities operating in isolated provinces of the northern and southern regions of the country.

Other incentives, contained in the general tax regulation include accelerated depreciation of assets, VAT refunds in qualified cases and deferred payment of custom duties over the importation of certain goods, among others.

Tax stablisation

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

Since 1974, most foreign investors in the country choose the rights granted by Decree-Law No. 600. Under these rights, investors bringing capital, physical goods or any other kind of investment from abroad could choose to sign a foreign investment contract with Chile. According to the statistics issued by the Foreign Investment Committee, by 2011, at least 56.5 per cent of the capital brought in from abroad used this mechanism.

One of the features of this scheme was the existence of a stabilisation clause. Under this special tax regime investors could choose either to be subject to the standard tax regime or to choose a special regime that sets an invariable rate of additional tax on profit remittances at 42 per cent, unmodified for a period of 10 years. The investor could exit from this regime at any time in favour of the standard regime, but could not subsequently return to the special regime.

This latter structure was replaced by Law No. 20,848. This new legislation is applicable to foreign direct investment, which is defined as ‘the transference to the country of foreign capital or assets owned by a foreign investor or controlled by it, for a total amount equivalent to or higher than US$5 million or its equivalent in another currency, implemented through convertible foreign currency, physical assets in any state or form, earning reinvestments, credit capitalisation, technologies in its diverse forms capable of being capitalised or credits associated to foreign investment coming from related companies’.

Foreign investors shall be protected by the applicable Chilean law and no new stabilisation clauses shall apply. However, the ones already executed by the Chilean state shall remain in force.

Law No. 20,848 mandates that the president issue the Fostering and Promotion Strategy for Foreign Investment. This strategy seeks to spur and streamline foreign investment in Chile, positioning the country as an international hub for business and investment. This strategy will consist of a examination of Chile’s international competitiveness, including an evaluation of the capacity of the Chilean economy to add value in the production of goods and services through the promotion of foreign investment, along with the definition of long- and mid-term recommendations.

In order to promote and simplify foreign investment in Chile, the new legal regime sets up the creation of the Foreign Investment Promotion Agency, which will be charged with promoting and attracting foreign investment and implementing the Fostering and Promotion Strategy for Foreign Investment. This agency will be the legal successor of the current Foreign Investment Committee.

Carried interest

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

There is no governmental entitlement to a carried interest or free carried interest in mining projects.

Transfer taxes and capital gains

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

There is no specific tax regarding the transfer of licences. However, there must be considerations regarding the rules about capital gains contained in the Income Tax Law as licences have regulations similar to the transfer of real state property rights.

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 is no distinction between Chilean nationals and foreign nationals concerning the taxes they must pay.

Business structures

Principal business structures

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

The usual mechanisms used by foreign investors are stock companies, limited liability partnerships and agency or branch offices. The most flexible of them is the stock company, whereas the one that provides relatively better taxation conditions is the limited liability partnership. As any mechanism presents benefits and deficiencies, it is the investor who is entitled to choose between them.

Local entity requirement

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

There is no specific requirement for a local partner to be part of the transaction.

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?

See question 46.


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?

Traditionally, project finance has been the most used mechanism for large investments in the mining industry. Concerning medium-scale projects, local or syndicated banking loans tend to be the favoured option.

Another available option is the bond market, although this has not yet been exploited by many mining companies. Additionally, the stock market has not been significant in financing mining projects.

Direct financing from government or major pension funds

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

Neither the government nor its agencies are involved in direct financing for mining projects. However, there are some programmes for fostering investment and technology, focused on mining, funded by the national treasury.

Pension funds are allowed to invest in both domestic and foreign financial markets. Therefore, they are free to invest in mining companies at their will. However, no specific legislation targets these investments on mining projects.

Security regime

Please describe the regime for taking security over mining interests.

Under the rules of the Mining Code, the mining licence is considered as a real-estate property right. As such, it is possible for the proprietor to mortgage it as collateral for obtaining credit in similar conditions to that of real estate.

For this purpose, the applicable regime is the same as the general rules regarding real estate and contracts of mortgages.


Importation restrictions

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

There is no specific limitation or restriction upon mining machinery or equipment, the general rule being that all kinds of goods can be imported into the country.

Standard conditions and agreements

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

In general terms, oral contracts are used in Chile (as opposed to standard conditions such as the International Federation of Consulting Engineers) although large international companies have prepared their own templates for procurement and other services or works contracts. Generally, these types of contracts are owner friendly, although it largely depends on current market conditions and the bargaining power of each party.

In relation to disputes, there is an increase in the use of technical experts to solve technical disputes, although this still cannot be labelled as a trend. These types of alternative dispute mechanisms are more common in large international projects.

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?

The general principle in the international commerce regulation is that there are no export quotas or a mechanism that prohibits or prevents the marketing of goods abroad.

However, there is one restriction contained in Law No. 16,624. This regulation imposes on all copper producers generating more than 75,000 tonnes per year, that they reserve a percentage of their production for the national industry. Cochilco is the entity in charged with determining such a percentage.

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 governing principle of the international currency exchange in Chile is the free flow of capital. This guiding principle has been progressively implemented since 1990 and has changed the role of the Central Bank of Chile from a comptroller and restrictive agency to a supervisor and an information holder. Accordingly, regulation is lenient and mainly establishes that funds must be brought to the country via the formal capital market consisting of banks, certain exchange bureaux, stockbrokers and some entities approved by the Central Bank.

The Central Bank requests a series of procedures and requirements with the aim of maintaining updated information about the amount and origin of the capital. The relevant regulation for these purposes is contained in the Compendium of Foreign Exchange Regulations.

This regulation establishes that investments and profits must be transferred outbound from and inbound to the country via the rules of Chapter XIV of the Compendium.


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 main environmental laws in the country are Law No. 19,300 (the Environmental Framework Law), Law No. 20,417, which created the Ministry for the Environment, the Service of Environmental Assessment and the Superintendency of the Environment and Law No. 20,551 (Regulating Mines and Installations Closure).

This regulatory structure is set on a nationwide basis, with few exceptions to the procedure, and forces all provinces to follow the same process once they have received environmental approval applications. The exceptions are limited and the process is designed to incorporate any local or special features of the location where the project is located. Additionally, the information regarding these special features is generally public and the relevant agencies are holders of such information.

The main agencies overseeing environmental issues are the Ministry of the Environment, the Superintendency of the Environment and the Environment Assessment Service. Also, regarding mining, Sernageomin plays a relevant part in every aspect of the project and in the planning and approval of the mine closure procedure.

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?

Mining projects are expressly mentioned as one of the activities subject to the Environmental Impact Assessment Service. This service requires the project to submit either an environmental impact declaration or an environmental impact study. The difference between the necessity of the submission of either of these documents is reliant on the environmental concerns of the project and the specific criteria to determinate it and, therefore, the relevant law and regulation. Generally speaking, the declaration is needed for minor projects where the potential harm to the environment is limited, whereas the study focuses on major and more environmentally perilous activities.

In consideration of the process, the authorities, once receiving the required documentation, have 120 days to deliver a decision on the application. If, after this period, there is no official response, there is a legal presumption that the project is authorised. However, there are several deferrals to this term and usually the final authorisation takes between four and 12 months.

Once the operations are authorised, the Environmental Assessment Service will produce a global environmental permit certifying that the project complies with the environmental requirements.

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?

Law No. 20,551 sets the procedure and measures the mining companies must perform regarding mine closure. The core idea behind this legislation is that the mine closure is an integral part of the operation of the project and it must be considered and implemented progressively through its exploitation. It also implements the ‘polluter pays’ principle.

As such, the mining company must establish a guarantee up to the value of the implementation of all the closure and post-closure measures previewed in the closure plan. The amount of this guarantee is determined considering the cost of remediation and closure and post-closure measures. The specific time for the submission of this guarantee is set following the rules regarding the assumed life of the deposit, taking into consideration the estimated life of the extraction operation.

The relevant authority for this procedure is Sernageomin

Restrictions on building tailings or waste dams

What are the restrictions for building tailings or waste dams?

Supreme Decree No. 248 from 2007 for the ‘Approval, Design, Construction, Operation and Closure of Tailings Dams’ establishes technical requirements and safeguards for those facilities. All the specific measures regarding environmental impacts and safety mechanisms for communities are determined case by case by the environmental authority and the National Service of Mining and Geology, depending on the exact location of the dam and the level of risks that its construction presents.

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?

Decree No. 132/2004 is the relevant regulation in relation to mining health and safety. The main objective of this Decree is to establish a general framework to protect the life and integrity of workers within the mining industry and of the activities closely related to it, and to protect the installations, infrastructure, machinery, buildings and premises that make mining operations possible.

The government agencies overseeing this purpose are Sernageomin and the regional office of the Ministry of Health.

The Labour Code sets a general employment framework, being the main legislation concerning the conditions and characteristics of the jobs that can be offered and the employees that any company can hire. The principal governmental agencies are the Ministry of Employment and the Employment Inspection.

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?

Decree No. 248/2007 of the Ministry of Mining regulates the management of mining waste. It states that any mining company may deliver a management project to Sernageomin applying for its authorisation to start building tailings ponds or waste piles. After its approval, the mining operator must send quarterly reports to Sernageomin with the conditions of such tailing ponds and waste piles and its maintenance.

Additionally, the owner of the mine concession from which the waste is extracted is the only entity permitted to explore and exploit such waste. In spite of this, if the mine concession is expired or the wastes are abandoned the owner of the mine concession where the waste is located will be entitled to explore or exploit them.

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?

There are no special restrictions and limitations regarding the nationality of employees in the mining industry. However, there is an extensive regulation concerning the general conditions a foreign national must have to be allowed to work in the country and the responsibilities that the employer must fulfil.

Concerning this, the main condition the legislation imposes on the employer is that a maximum of 85 per cent of the total direct work force can be foreign employees. Nevertheless, there are some exceptions to this rule, which are dependent on the size of the company and the technical level of the employee.

Another relevant item regarding foreign employees is the fulfilment of general migratory conditions and the surveillance of the corresponding visa.

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?

There is no legislation regarding corporate social responsibility (CSR) in Chile. However, it is recommended that a mining company undertakes its own policies.

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?

There is a special status for indigenous lands and natural resources within the national territory. This status is set by Law No. 19,253, the Indigenous Law, and Convention 169 of the International Labour Organization (ILO).

According to this legislation, indigenous people cannot be detached from their land by any means without the approval of the Indigenous Development National Corporation.

As a result of the former rule, the exploitation of a mining project might be hindered and the mining company must be aware of any indigenous land affected by its operations.

International law

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

There is no specific legislation concerning CSR. However, there is some regulation of the rights of indigenous people derived from Chile’s membership of Convention 169 of the ILO.

Anti-bribery and corrupt practices

Local legislation

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

Law No. 21,121 was enacted and entered into force on 20 November 2018 - a specific anti-bribery law in accordance with OCDE recommendations and modifies the Criminal Code and other regulations concerning the prevention, detection and prosecution of crimes related to corruption. Among its various legal amendments, Law No. 21,121 broadens the offence of bribery to include:

  • public servants;
  • broadens the offence of ‘incompatible negotiation’;
  • punishes ‘bribery between private parties’; and
  • typifies the crime of ‘unfair administration’.

It also modifies Law No. 20,393 on Criminal Liability of Corporations so that legal entities can now be criminally responsible for committing any of the aforementioned crimes, along with the already punished offenses of bribery to public servants, money laundering, financing of terrorism and handling of stolen goods.

Together with these new regulations, outstanding legislation on this matter includes:

  • international treaties on the context of Chile as a member of the Organisation for Economic Co-operation and Development (OECD) 1997 Convention on Bribery of Public Servants on International Transactions;
  • Decree No. 1,879/1998 (Inter-American Convention against Bribery);
  • Law No. 20,414 on Transparency and Modernisation of the State;
  • Law No. 20,285 of 2008, on Access to Public Information, granting access to individuals to any kind of information held by governmental agencies;
  • Law No. 19,880, on the Basis of Administration of the State, setting the framework on which the government, its agencies and public servants must conduct and operate. One of the most important features of this act is the ‘Principle of Integrity’ of public servants, stating they must perform their activities on the highest legal and moral levels; and
  • Law No. 20,900 of 2016 on Financing of Political Campaigns, which among other issues, forbids private companies to contribute in any kind with electoral campaigns or candidates.
Foreign legislation

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

There is no binding legislation related to adopting any foreign anti-bribery regulations. However, Chilean companies are free to subject themselves in this issue to any higher standard they choose.

As Chile is a member of the OECD, there are two laws that national companies take into consideration. These are the US Foreign Corrupt Practices Act and the UK Bribery Act.

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?

Chile is not a member of EITI. Additionally, individuals’ or companies’ income tax payments are not public information. However, there are detailed statistics of the incomes received by the Treasury from the mining industry.

Foreign investment

Foreign ownership restrictions

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

There are no restrictions in Chile related to the ownership of a mining project by foreign nationals.

International treaties

Applicable international treaties

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

In the past 30 years, the Chilean economy has progressively become more open to the world. Under this policy, Chile has signed free trade agreements with more than 60 countries and regions, the two most important being those with the United States and the European Union. To date, Chile is also a notable participant in the development of the Trans-Pacific Partnership treaty.

As such, for most products, custom duties are minimal and restrictions to either imports or exports tend to be few.

Particularly in the mining field, Chile has three noteworthy treaties:

  • the Mining Treaty with Argentina;
  • the Mining Treaty with the Asia-Pacific Economic Cooperation (APEC); and
  • membership of the International Copper Study Group (ICSG).

The Mining Treaty with Argentina created a permanent body whose mission is to review and propose legislation and solutions to binational controversies and difficulties that any mining project may have. One of the main examples of the execution of this treaty is the Pascua Lama project.

Regarding APEC and ICSG membership, Chile is an active participant in identifying modern solutions to mining problems and delegates of the Ministry of Mining concern themselves regarding the most recent situations in the international forum.

Finally, Chile is a member of the Kyoto Protocol and the Stockholm Convention. Also, it has signed several double taxation treaties with Argentina, Canada, Mexico and South Korea, among others.

Update and trends

Recent developments

What were the biggest mining news events over the past year in your jurisdiction and what were the implications? What are the current trends and developments in 2019 in your jurisdiction's mining industry (legislation, major cases, significant transactions)?

To date, no new regulations have come into force, except for Law No. 21,055, which creates a price stabilisation mechanism for copper but is only applicable to small-scale mines.

The bill seeking to modify Law No. 20,551 on the closure of mining operations and installations entered the Senate for discussion on 18 December 2018. The bill seeks to alleviate the financial burden that owners of mining projects must assume in order to comply with the regulations, especially medium-scale mining companies, which provides flexibility in constituting the guarantees required by the law.