CHILE

LEGAL SYSTEM

At state level, the mining industry is regulated by means of certain provisions in the Political Constitution (PC), specific mining laws - the Constitutional Organic Mining Law (COM) and the Mining Code (MC) - and other general and special regulations. There are no special mining agreements (contracts) with the state.

Any individual or entity may apply for a mining concession to explore and exploit the mines although the PC provides that the state is the owner of all mines. Ownership of mines and concessions are different from that of the surface land, which may be subject to obligations and limitations to facilitate mining exploration and exploitation activities.

Except for oil and gas deposits, lithium, and deposits of any kind located in the sea bottom under Chilean jurisdiction or in areas deemed, by law, to be important to national security, the COM regulates the concession and establishes that all metallic and non-metallic substances may be subject to concessions. These non-claimable mineral substances may be mined by the state or under administrative concessions or special operational contracts, all of them governed by their own legal statute.

The MC elaborates on the provisions of the PC and the COM.

Chilean civil courts are the only entities that can receive the application for a concession, grant it and declare it terminated or extinguished. They also resolve all situations and conflicts related to concessions.

The governmental entity within the Ministry of Mining that approves the technical requirements related to the form, boundaries and location of concessions is the National Geology and Mining Service (SERNAGEOMIN); it keeps a public record of concessions; and supervises the technical compliance with certain mining regulations.

Regulations establish:

Rights

To occupy as much of the surface land as necessary for the exploration or exploitation works, upon payment of the proper indemnity for damages to the surface landowner.
To impose easements upon an unwilling surface landowner through a simple and summary procedure before the relevant civil court (certain exceptions apply in the case of houses and their appurtenances and lands where vineyards and fruit trees are planted).

Obligations

To pay (during March of each year) an annual license or permit for a cost equivalent to approximately US$1.5 per hectare, in the case of exploration concessions, and US$7.5 per hectare, in the case of exploitation concessions. Failure to pay any annual permit may cause the loss of title to the concession through an auction procedure.
To obtain the necessary environmental approvals.
To comply with:
Health and safety protection rules;
rules regarding civil construction developments, mining work, machinery, equipment, tools, buildings and mining facilities; and
Special environmental authorizations (fines, closure and even termination of mining activities may apply in case of infraction of such obligations).
To comply with, or be subject to, the general rules of contracts and torts in connection with their liability in case of infractions or violations of Chilean civil law.