New Changes To The Mining Legal Framework In Chile

• Published date: 14 December 2022
• Subject Matter: Environment, Energy and Natural Resources, Environmental Law, Mining
• Law Firm: Urzua Abogados
• Author: Mr Daniel Weinstein

Amendments to the Chilean mining legal framework in the last four decades have been infrequent and have not involved deep changes. However, this year Law No. 21,420 (the "Law") was enacted, containing the most important amendments to the Mining Code (the "Code") since it was enacted in 1983.

Although the mentioned amendments will not enter into force until February 2023, the Law was already reformed by Law No 21,462, enacted in July 2022. More importantly, the Government recently presented to the National Congress two bills of law: (i) Bill No 15,510-08, aimed at making deep amendments to the Law and, additionally, to other legal regulations related to the mining sector (the "Bill"); and (ii) Bill No 15,511-08, whose sole purpose is to postpone the entry into force of the mining-related provisions of the Law until January 1, 2024, and which is being discussed with urgency at the National Congress (the "Short Bill").

In this article, I first summarize the most important amendments introduced by the Bill and the Short Bill, and then, I combine the changes introduced by the Bill with those provisions of the Law that will remain unchanged in case the Bill is approved by the National Congress. The purpose is to present in a single place the amendments that both the Law and the Bill (which in turn reforms certain matters of the Law) will make to the mining legal framework.

I. SUMMARY OF THE MOST IMPORTANT AMENDMENTS INTRODUCED BY THE BILL

1. Right to extend the term of the exploration concession.

• An extension of the term for an additional 4 years could be requested, provided that certain requirements are fulfilled.

2. Temporal restriction on applying for the same area of an extinct exploration concession.

• Once the exploration concession has expired, the holder may not acquire, for a term of one year, a new exploration concession that includes in whole or in part the area covered by the exploration concession that has been extinguished.
• Breaches of this provision will be punished with the loss of the preference to establish an exploitation concession in that area. Third parties that denounce these contraventions can apply for mining concessions in the area, which will be dated with the date of the denounced application.

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

• Certain aspects regarding the obligation to submit geological information to the National Service of Geology and Mining (the "Service") are specified, but the more detailed regulation is left to the Regulation of the Mining Code (the "Regulation"), which should be amended accordingly. The fines applicable for non-fulfillment of this obligation are increased.
• Reports to the Service containing information about advanced exploration will remain confidential for 3 years.

4. Future changes to the Datum.

• The change to the SIRGAS datum was abolished (for now) Potential future changes on this matter shall be made by amending the Regulation accordingly.
• The expiration of the mining concession, established as a sanction for failing to register the new mining coordinates in the Mining Register, as established by the Law, is abolished by the Bill.

5. Definition of mining works for the purpose of reducing the mining fees.

• For the purposes of reducing the mining fees of exploitation concessions that are being worked, mining works will include advanced exploration in exploitation concessions.
• Small-scale mining may benefit (but only once) from the reduced mining fees, even if they do not enter the Environmental Impact Assessment System (the "SEIA").

6. Entry into force of the amendments if the Bill is approved.

• As a general rule, both the amendments made by the Bill and those made by the Law (which is reformed in turn by the Bill), will entry into force on January 1, 2024. Furthermore, for one time only, in the first year (2024), all mining concessionaires will pay the reduced mining fees.

II. EFFECTS OF THE APPROVAL OF THE SHORT BILL

• The sole purpose of the Short Bill is to postpone the entry into force of the mining-related provisions of the...