ARGENTINA Law and Practice Contributed by: Sebastián P. Vedoya, Sergio Arbeleche and Dolores Cattaneo, Bruchou & Funes de Rioja
two months following the June 30 deadline. The Mining Authority shall formally notify that circum - stance to the applicant, and the latter is allowed to cure the lapsing of the concession by paying the canon, plus fines, within a 45-day term from the date on which the relevant resolution by the Mining Authority is notified to the applicant. If the applicant does not cure the situation in that 45-day term, the lapsing is then confirmed with no possible appeal, and the mine is registered as vacant, thus allowing any third party to apply for it. Difference between “canon” and “legal royalties” “Canon” and “legal royalties” are two different obligations. The canon is a fixed fee paid per pertenencia to the local mining authority for owning mining concessions, while legal royalties are the mandatory mining royalties that should be paid to the province in connection with effec - tive production (in addition to any contractual royalties that may exist in each particular case). Submission and fulfilment of a plan containing minimum investment requirements (“Investment Plan”) The FMC formally requires an Investment Plan to be submitted for each mining property with - in one year of the date on which the Survey is requested, regardless of whether that Survey is actually made. The FMC does not require a com - plete plan, just a simple estimation of the plan and its disbursements. This estimation, there - fore, may only provide an approximate idea of the investments required. The investments should be capital investments. Disbursements for wages and expenses for technical assistance conducive to the workings and exploitation of the mine can be included.
The concession-holder may, from time to time, introduce amendments to the investments esti - mated in the Investment Plan by rendering an account thereof to the Mining Authority, provid - ed that the anticipated aggregate investment is not reduced through such amendments. The Investment Plan cannot be less than 300 times the canon amount, and the estimated investments committed therein must be effec - tively made within five years of the date on which the Investment Plan is submitted. In addition, in each of the first two years of the stipulated term, the amount of the investment per year should not be lower than 20% of the aggregate estimated amount at the time of sub - mission of the Investment Plan. The foregoing tends to avoid concentrating the investments in the last year, following several years of inactivity. Upon an investment of 40% during the first two years, the balance may be completed during the remaining term of the period. Failure to submit and perform the Investment Plan in a timely manner may result in the loss of the mine. Avoid abandonment of the works and Mining Activity (the “Lack of Works”) When the mine has been inactive for more than four years, the Mining Authority may demand filing of an activation or reactivation project, adjustable to the production capacity of the concession, the characteristics of the area, the available means of transport, the demand for products and the existence of farming equip - ment. A mine is deemed to have been inactive when no exploration, preparation or production tasks have been regularly conducted in it during the above-mentioned term. The demand shall be met within six months, under penalty that
41
CHAMBERS.COM
Powered by FlippingBook