Lithium mines in Argentina | Dentons

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Argentina does not have a specific legal framework applying to lithium projects nor a specific agency that monitors its execution.

Due to the federal nature of the country, federal and provincial laws apply to the exploration and exploitation of minerals, including lithium which is considered a Tier 1 mineral (primera categoría mineral)[1]

Under the federal legal system, the National Constitution establishes that the provinces own the mineral resources under their jurisdiction,[2] while the Federal Mining Code sets out the rights and obligations regarding the acquisition for the exploration and exploitation of minerals.[3]

Two types of concessions are established in the Federal Mining Code, allowing natural or legal persons who acquire them to explore and develop mineral deposits and to freely dispose of extracted minerals.[4] The concessions are granted in perpetuity but can expire if the obligations of works and investment – necessary to maintain the title in good standing – are not duly fulfilled.

In addition, federal laws and regulations encouraging investment and establishing export rights, free competition, tax incentives, and minimum environmental standards apply to the exploration and exploitation of minerals, including lithium. .

It should be mentioned that the mining activity benefits from a special promotional regime which grants investors significant tax advantages at the federal level, including deductions, exemptions and subsidies.[5] It also guarantees fiscal stability for thirty years from the filing of the mining feasibility study. In addition, mining royalties should not exceed 3% of the mine’s value of the ores extracted.

In addition, the National Mining Secretariat recently approved the “Strategic Plan for Argentinian Mining Development” aimed at developing a general strategy focused on consolidating the role of the mining industry over the next thirty years by increasing exports, implementing a progressive tax regime, and promoting sustainable mining.[6]

In addition, Decree No. 234/21 recently promulgated at the federal level created the “Promotion of Export Investments” intended to promote direct domestic and foreign investments to increase productive export capacities.

This regime applies to investments in new mining industry projects with a minimum value of US $ 100 million, determined at the time of project filing. Beneficiaries can freely use up to 20% of the foreign exchange obtained in exports related to the project to pay principal and interest on commercial or financial liabilities abroad, and / or income and dividends related to closed balance sheets and audited, and / or repatriation of direct investments from non-residents.

With regard to local competences, the provinces are empowered to regulate the procedural aspects concerning the granting of mining concessions, to issue the environmental permit and to issue additional regulations on environmental aspects applicable to mining projects.

The environmental license must comply with the minimum standards set out in Federal Laws No. 24,585 (which sets out the environmental protection rules for mining activities incorporated in Title XVIII, Section 2 of the Federal Mining Code) and 25,675 (General Law on the environment) .

In most provinces, the provincial enforcement authority issues an environmental impact statement that authorizes the implementation of the proposed activities and establishes the conditions that the applicant must meet throughout the project. The environmental impact statement is generally valid for two years and companies must submit updates to the environmental impact statement.

In the Province of Jujuy, the environmental impact study concerning lithium projects is subject to a more stringent examination since it must be approved by a special commission made up of several agencies that do not intervene in the environmental approval of other types of projects.[7]

With regard to social license, and according to the Argentine Constitution,[8] and ILO Convention 169,[9] indigenous communities have the right to be recognized as entities with legal status. As such, they can exercise collective rights related to community ownership of the land on which they live and ownership of existing natural resources.

The legal status of indigenous communities should be recorded in a special register along with other information about the organization and its authorities, location and area of ​​interest.

Depending on the province, the consultation procedure concerning indigenous communities can be held separately or simultaneously.[10] In most cases, it is not necessary for indigenous communities to give their consent to a mining project as it is limited to the specific cases provided for in Article 16 of ILO Convention 169.

The opposition of the indigenous communities to the execution of any mining activity does not commit the authorities. Nevertheless, the observations raised by indigenous communities within the framework of a public consultation procedure should be duly taken into account by the authorities when issuing the environmental impact statement.[11]

In addition, the Escazú protocol recently adopted by Argentina[12] promote public participation in the environmental decision-making process,[13] which is already regulated by Law No. 25,675 (General Environmental Law) and Law No. 25,831 on free access to public information on environmental issues. Likewise, the provinces have adopted complementary laws and regulations concerning the right of consultation.

The regulatory framework does not provide for the obligation to recycle the extracted lithium carbonate and chloride, which are mainly exported to different countries (i.e. the United States, China, India and the United Kingdom). Uni) where the salts are processed and used for higher value added products. In other words, there is no obligation to invest downstream and therefore no barrier to extract lithium from the ground in the first place.

Finally, the principle of non-discrimination applying to companies that explore and exploit mineral resources is a key element of Argentina’s legal framework. In fact, Argentina’s legal regime is clearly the most favorable compared to the regimes enacted by neighboring countries which have formed the so-called “lithium triangle” and place many restrictions on the exploitation of lithium and its concession in it. ‘having declared as a strategic national resource.[14].

[1] The Federal Mining Code classifies mines according to the type of ore discovered. The first mines are those whose soil is accessory, which belongs to the provincial state in which it is located and which can only be exploited with legal authorization from the mining authority. Early mines include the following metals: (i) gold, silver, platinum, mercury, copper, iron, lead, tin, zinc, nickel, cobalt, bismuth, manganese, antinomy, wolframite, aluminum, beryllium, vanadium, cadmium, tantalum , molybdenum, lithium and potassium; (ii) arsenic, quartz, feldspar, mica, fluorite, limestone, phosphates, sulfur, borates; (iii) precious stones; (iv) certain fuels: mineral coals, lignite, anthracite coal and solid hydrocarbons.

[2] Cfr. Article 24 of the National Constitution.

[3] Cfr. Article 1 of the Federal Mining Code.

[4] The mining exploration concession is granted prior to the launch of a work exploration, the mining company must obtain an exploration concession from the provincial mining authority. Such a concession grants the exclusive right to explore and obtain the development concession if a discovery is actually made. Cfr. article 156 and following of the Mining Code.

[5] Cfr. Federal Law on Mining Investment No. 24 196.

[6] Cfr. Resolution 47/20 of the Federal Secretariat of Mines. The objectives of the Strategic Plan are: (i) promotion of sustainable development of the mining sector and investments in exploration and exploitation, (ii) guarantee of the correlation between the fiscal cost of mining promotion policies and investments workforce; (iii) the development of mining activity as an opportunity for the integral growth of individuals and communities, (iv) educate on the importance of mining activity.

[7] Cfr. Provincial Decree No. 7592/2011.

[8] Cfr. Article 75 inc. 17 of the National Constitution.

[9] Approved by Law No. 24,071.

[10] In the Province of Jujuy, consultation with the indigenous communities takes place in a distinct manner.

[11] It should be noted in the case “Comunidad Aborigen de Santuario Tres Pozos y otros c / Provincia de Jujuy y otros s / amparo”(Expte. C.1196.XLVI) some indigenous communities have brought an action against the provinces of Salta Jujuy and the federal government, arguing that the consultation, information and participation procedure prior to the issuance of exploration permits and exploitation of lithium and borate in the Salinas Grandes has not been achieved.

The Supreme Court found that the plaintiffs had failed to demonstrate that the alleged damage affected them “in a sufficiently direct or substantial manner” and, therefore, determined that there was no actual case or controversy. and dismissed the action concerning the province of Jujuy. the province of Salta and the federal government, the Court declared itself incompetent.

[12] The Escazú Agreement was adopted by Law No. 27,566.

[13] See article 7 of the treaty, available at https://treaties.un.org/doc/Treaties/2018/03/20180312%2003-04%20PM/CTC-XXVII-18.pdf.

[14] It should be noted that Decree No. 7592 of the Governor of Jujuy Province declared lithium as a strategic resource. However, such a statement implies that lithium projects should go through more stringent scrutiny before it is approved. In addition, there was a federal initiative to declare lithium as a strategic resource, but it was not approved by the National Congress and met with strong resistance from the affected provinces, which recently formed the “Lithium Commission” (Mesa del Litio) aimed to promote the development of lithium mining in Argentina.


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