Changes To The Mining Legal Framework In Chile

• Published date: 24 November 2022
• Subject Matter: Environment, Energy and Natural Resources, Environmental Law, Mining
• Law Firm: Urzua Abogados
• Author: Mr Daniel Weinstein

Chile is a country rich in natural resources -especially copper and lithium- with a long tradition in mining. In the last three decades, it has attracted large amounts of foreign investment, in part because of the stability provided by the mining legal framework, whose pillars are: the Constitution enacted in 1980 and heavily amended in 2005, the Organic Constitutional Law of Mining Concessions of 1982 and, finally, the Mining Code enacted in 1983. Despite an attempt to change the mining legal framework in a draft of constitution that was rejected last September in a referendum, mining regulations have pretty much remained unchanged in the last 40 years. That is, until now, as the most important amendments to the Mining Code since it was enacted will enter into force in February 2023.

Indeed, several matters were modified or introduced by Law No. 21,420¹ which "Reduces or eliminates certain tax exemptions" (the "Law") to the Mining Code (the "Code"). Although the Law -which amends regulations of various sectors of the economy- entered into force on April 1, 2022, as a general rule with regard to amendments to the Code, it will enter into force on February 4, 2023.

The most important amendments introduced by the Law to the Code are the following

1. Increase in the term of the exploration concession.

• The term of the exploration concession is increased from 2 years to 4 years. Once this term has expired, the concession will be extinguished, without the possibility of requesting an extension of the term.

2. Prohibition of applying for the same area of an extinct exploration concession.

• Once the exploration concession has expired, the holder may not acquire, by himself or through an intermediary (e.g., a relative or a related company), a new exploration concession that includes in whole or in part, the area covered by the original exploration concession that has been extinguished.

3. Obligation to report by the holder of a mining concession.

• The holder of an exploration concession, once said concession has expired or the granting period has elapsed, has to send to the National Service of Geology and Mining (the "Service") all the geological information that has been obtained from the exploration works.
• The holder of an exploitation concession must send to the Service, every 2 years, any geological information obtained from the geological exploration works carried out during that period.
• Failure to comply with this obligation to report, will be sanctioned...