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  • MINING ALERT NO. 14 - PROPOSED REFORMS TO MINING LAW
Jueves, 17 Octubre 2019 18:07

MINING ALERT NO. 14 - PROPOSED REFORMS TO MINING LAW

On May 2, 2019, the bill for the reform of the Mining Law was presented, which was qualified by the Legislative Administration Council of the National Assembly on October 2, 2019 and which will be analyzed by the commission of biodiversity and natural resources.



On May 2, 2019, the bill for the reform of the Mining Law was presented, which was qualified by the Legislative Administration Council of the National Assembly on October 2, 2019 and which will be analyzed by the commission of biodiversity and natural resources. The proposed reforms are considered below:

1. Mining Registry, Mining Cadastre and Unique System

a) Articles 9 and 10 of the regulations to the Mining Law that define the Mining Registry and the Mining Cadastre are included in the Mining Law. This reform is done by adding these definitions through articles 15.1 and 15.2.

b) The Unique Registry and Mining Cadastre System to be managed by ARCOM is created to share information with SENAGUA and the GADs. This reform is included in article 15.3 of the Mining Law.

2. Commercialization Phase does not include finished products

c) It is established that the mining phase of commercialization does not include the sale of finished products, adding “except finished products”. This reform is included in article 27 literal (g) of the Mining Law.

3. Return of investments in reversed concessions

d) It establishes that, if one or more mining concessions is granted in favor of a public company and these are reverted to the State or to a private mining concessionaire, it will have to “return to the State all the investment made in the different mining phases implemented”. The State must prove "the real productivity of the amounts invested". This reform is included through article 31.1 of the Mining Law.

4. Concessions would be granted in favor of the parent company

e) It is established that, “mining concessions that have been granted to subsidiaries, shall be understood to have been granted to the parent company on which they depend administratively and economically, in order to avoid the accumulation of mining hectares on a single concessionaire, in an amount greater than what is established in this Law.” It should be remembered that mining title holders can request as many concessions as they wish. However, in the exploitation phase, no concessionaire may have 1 or more concessions that as a whole total more than 5,000 hectares.

5. Royalties

f) It is established that royalties must be paid on tailings, clearings, debris, and other mining-metallurgical waste, which are an accessory part of the concession, beneficiation plant or smelter from which they originate. This reform is included in article 43 of the Mining Law.

6. Illegal Mining

g) It is established that the machinery and vehicles seized from illegal mining may be donated to the GADs in whose territory it was executed, and the seized supplies will be auctioned. It is provided that, if within 180 days any of the stated actions are not carried out, the indicated property will be destroyed. In addition, fines are established for reputed illegal miners or for owners of said property. These reforms are included in article 57 of the Mining Law.

h) It is established that, once a complaint has been filed with the ARCOM for illegal mining, “this institution is obliged to issue the corresponding administrative acts in order to stop illegal mining activities within 90 days” In turn, it is provided that, “after this period has expired, both the mining title holder and the State must assume in equal proportion the economic responsibilities due to environmental and social reparation.”

7. ARCOM inspections

i) It is added that, once an inspection has been carried out at the facilities of a concession, ARCOM has a term of 30 days to submit a report, without indicating to whom it is submitted. It is established that, as a result of this report, an action plan or administrative procedure may be required, which could result in a fine, suspension or expiration of the concession. The action plan, it is said, will establish corrective measures to remedy the breaches. This reform is included in article 74 of the Mining Law.

8. Environmental and water aspects

j) In article 78, which is titled “protection of the environment”, two substantive issues are added, which are identified below:

i) Currently, the article indicates that the national environmental authority must grant environmental authorizations within a maximum period of 6 months, after which, if they are not issued “it will be understood that there is no opposition or impediment to the start of mining activities”. The proposal modifies the latter statement to the following: “If this is not done within that period, mining activities will continue to be developed based on the schedule of activities established by the proponent, until the corresponding environmental administrative authorization is issued”.

ii) It is added that, if it is found that the delay in the issuance of environmental authorizations is due to causes attributable to the proponent, “the Sector Ministry will issue a reasoned resolution to suspend the mining activities of the concession, until the holder obtains the corresponding environmental administrative authorization”.

k) The obligation is added to the mining title holder to obtain approval from the ARCOM for the design of a system for water recirculation or reuse prior to granting of a water use permit by the SENAGUA. This reform is included in article 79 of the Mining Law.

9. Prior consultation and citizen oversight

l) The obligation to carry out “prior consultation of the communities that are within the area of direct and indirect influence” for large-scale mining projects “prior to the final granting of the concession, which will be in charge of the National Electoral Council, [that] […] should exclusively consider the electoral roll”. This reform is included through article 87.1 of the Mining Law.

m) The possibility of creating a citizen oversight committee prior to the start or during the mining phase of large-scale, medium and small-scale mining projects is established. This oversight committee would have the possibility to make recommendations in the following aspects: environmental, social, labor, engineering, production, among others. The mining title holder will have the obligation to provide information that the oversight committee requests.
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