BOLIVIA Law and Practice Contributed by: Ramiro Guevara, Jorge Inchauste and Rosario Echeverría, Dentons Guevara & Gutiérrez S.C.
The Bolivian party is a free carry party that only contributes the mining areas to the contract; no other commitments, such as further investment, are required. In addition to mining association contracts, local or foreign companies may execute mining pro - duction contracts if they wish to perform mining activities in mining areas under the administra - tion of COMIBOL. In these contracts, COMI - BOL’s participation is a percentage of the gross sale value of the mineral/concentrate, which is negotiated with COMIBOL (the concept is simi - lar to a royalty). Ownership is not mandated as a 45%/55% participation scheme of the mining association contracts. Mining production con - tracts require investment schedules and a work plan. The maximum term of a mining produc - tion contract is 15 years, with the opportunity to renew for another 15 years. For enforceability, mining production contracts are required to be filed at the Mining Registry; once executed, sig - natory parties are not able to transfer or assign their rights therein. Association Contracts or Operation and Maintenance Contracts With YLB YLB develops the basic chemical processes of evaporite resources with a 100% state participa - tion for the production and commercialisation of: • Lithium Chloride, Lithium Sulfate, Lithium Hydroxide and Lithium Carbonate; and • Potassium Chloride, Potassium Nitrate, Potassium Sulfate, derived and intermedi- ate salts and other products of the evaporite chain. However, YLB is authorised by law to enter into association contracts (similar to a joint venture) and operation and maintenance contracts for the development of the lithium production chain. In
the case of joint venture contracts, YLB retains ownership of the lithium deposits, and its par - ticipation in the association is greater than 50%. 1.7 Mining: Security of Tenure Term Length and Renewals Articles 142 and 159 of the Mining and Met - allurgy Law provide for different term lengths and renewal requirements, depending on the title containing the mining rights. Administra - tive contracts (under which the mining operator may carry out prospecting, exploration, exploi - tation, commercialisation and industrialisation of mining) have a term length of 30 years from the time of their registration. Such administrative contracts may be renewed for an additional 30 years only if the mining operator demonstrates the need to continue the mining operation. Prospecting or exploration licences, however, only have a term length of five years. Such licences may be renewed for an additional three years only if the mining operator demonstrates the need to continue the mining exploration. Rights to Progress from Exploration to Mining Under Article 156 of the Mining Law, the pros - pecting and exploration licence grants the min - ing operator the preferential right to enter into an administrative contract for the exploitation of the mining areas being explored or a part thereof. This right may be exercised individually by the licensee or jointly with a third party. According to the Regulation for Granting and Termination of Mining Rights, approved by Min - isterial Resolution No 23/15 dated 30 January 2015, the process from exploration to mining starts with the filing of an application for the exe - cution of an administrative contract for exploita - tion before the AJAM. This authority examines the validity of the prospecting and exploration
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