CHILE Trends and Developments Contributed by: José Manuel and Felipe Curia, CoyC Minería y Regulación
Introduction of an incremental patent system for “non-working” concessions The reform established a regime of progressive min - ing patents linked to the absence of effective mining work, based on the identification of a structural gap in the mining concession system that allowed idle con - cessions to be held indefinitely at a low cost. Such concessions, in addition to failing to generate pro - ductive activity, hindered third-party access to mining property and the development of exploration, thereby undermining the economic function of the concession regime. In this context, the reform provides that main - taining the patent at its base rate requires annual certi - fication of the performance of effective mining works, in accordance with the statutory criteria. Failing such certification, the concessionaire becomes subject to an incremental patent system, under which the amount increases progressively in five-year tranches, reaching its maximum after 30 years and thereafter stabilising in accordance with the statutory scale. Alongside the above, the reform reduced the need for non-mining project developers to obtain mining concessions merely as a means of protecting their projects, by restricting a judicial remedy previously available to concessionaires that had been abusively used to suspend the development of projects through court proceedings ( denuncia de obra nueva ). This design pursues a dual objective: to discourage mining speculation and to promote the effective use of mining concessions, thereby reinforcing their instru - mental role in the development of mining activity and in the generation of public revenue. This legislation is currently in its second year of imple - mentation, making it premature to draw definitive conclusions as to its effectiveness, which will largely depend on its implementation by SERNAGEOMIN. In this regard, the authority faces the challenge of issu - ing clear guidance to mining concessionaires regard - ing the scope of the statutory definitions of effective mining work. Prohibition of the renewal of exploration concessions The renewal of exploration concessions was prohib - ited, although their term of validity was extended,
institutional framework tasked with overseeing com - pliance with these standards. In addition, three further aspects of the LMAS are par - ticularly relevant in the mining context. • Tailings storage facilities and mining pipelines are exempted from the hydraulic works construction permit provided for in Article 294 of the Water Code. As a result, the duplication of permits that previously arose in conjunction with Supreme Decree No 248/2006, which regulates tailings deposits and falls under the authority of SERNAG - EOMIN, is resolved, with the latter remaining as the applicable regulatory framework. • Fines for violations of mining safety regulations are increased to up to 100 annual tax units ( unidad tributaria anual UTA (approximately USD71,000)), representing a substantial increase in the maximum level of applicable penalties. • Amendments are introduced to Law No 20,551 on mine closure and mining installations. The sectoral permit for the mine closure plan is decoupled from the environmental permit, by requiring an environ - mental qualification resolution ( resolución de cali- ficación ambiental RCA) only where such approval exists. In addition, within the context of sanctioning procedures, the amendments broaden the scope for the application of the principle of proportional - ity in the imposition of coercive fines (daily fines for ongoing non-compliance) for breaches of the law or of the approved closure plan, among other modifications. Recent Amendments to the Mining Code The Mining Code has recently undergone the most significant amendments in its 40 years of existence, through Law Nos 21,420 and 21,649, although these reforms did not affect the concession system in its essential structure. The former was enacted with a clear fiscal incentive, aimed at increasing public rev - enue to finance pensions, while the latter sought to address certain shortcomings identified in the former. The main amendments are as follows.
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