CHILE Law and Practice Contributed by: Macarena Ravinet and Federico Espinosa, Cuatrecasas
8.7 Natural Resources Natural resources projects in Chile, notably mining, energy, and forestry, operate under a robust regula- tory framework. The state owns subsurface resources, such as copper and lithium, and grants exploitation rights through concessions or contracts. Water rights, once granted, become private property but are sub- ject to use and environmental rules. Mineral exports face minimal restrictions, except for lithium, which is tightly controlled by the state through CORFO agree- ments or licenses, reflecting its strategic value. While beneficiation is not mandatory, policies are increas- ingly promoting value-added industries, especially those related to lithium. Projects must also comply with strict environmental, social, and governance (ESG) standards. 8.8 Environmental, Health and Safety Laws Projects in Chile must comply with a robust framework that covers environmental, health, and safety, as well as community consultation requirements. The Envi- ronmental Framework Law and Environmental Impact Assessment System require projects with significant environmental effects to obtain approval via an Envi- ronmental Impact Declaration or Study, overseen by the Environmental Assessment Service. The Superintendency of the Environment monitors compliance and enforces sanctions. Occupational health and safety standards, risk prevention, and acci- dent reporting are mandated by the Labour Code, with oversight from the Ministry of Labour and Superin- tendency of Social Security. Community consultation, especially with indigenous groups, is required under ILO Convention 169, co- ordinated by the Ministry of Social Development and integrated into the environmental assessment process, ensuring regulatory compliance and social license.
interests over real estate and water rights if local legal requirements are met and registration is completed. Enforcement of security is available through Chilean courts, subject to local procedures and priority claims, such as labour and tax obligations. 8.5 Structuring Deals Project companies in Chile are typically established as corporations ( sociedad anónima ) or joint stock com- panies ( sociedad por acciones ), offering flexibility for shareholder arrangements and effective ring-fencing of assets and liabilities. These entities must comply with the Corporations Law and Commercial Code of Chile, and lenders generally require them to operate solely as special purpose vehicles. Foreign investment is broadly permitted, with full foreign ownership allowed except for land in border areas, which needs presidential approval. Investment flows exceeding USD10,000 must be reported to the Central Bank. Chile’s extensive treaty network ensures additional protections, including international arbitra- tion, fostering a stable environment for project finance. 8.6 Common Financing Sources and Typical Structures Chilean project finance utilises a mix of domestic and international bank debt, multilateral and export credit agency support, and capital markets instru- ments. Banks provide long-term syndicated loans, while agencies such as IDB Invest, IFC, and CAF offer direct lending and credit enhancements, particular- ly in the energy, mining, and infrastructure sectors. Project bonds, often issued under New York law, are used in infrastructure and energy, backed by stable revenues. Alternative funding includes streaming and royalty agreements in mining, prepayment or offtake financing from commodity traders, and private equity through direct investment or mezzanine capital. Struc- tures are sector-specific and align with international standards.
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