In our previous issue we informed that on early morning of September 30, 2010, the Senate definitively passed the bill that had been approved by the House of Representatives, on “minimum standards for the protection of glaciers and periglacier environment.” Regarding the contents of this law, please refer to “New Law on Minimum Standards for the Protection of Glaciers” in our September issue.

On October 28, 2010 the law was enacted by the Federal Executive Power “without its approval,” with the number 26639. The Argentine Constitution provides that, in the process of making a law, when a bill is passed by the House of origin it is sent to the other House for debate. Once approved by both houses, the bill is presented to the Executive Power for examination, and if it is also approved, it shall become law (section 78). In addition, section 80 of the Argentine Constitution states that “it is considered approved by the Executive Power every bill not returned within a 10-day period.” As the Executive Power did not veto the bill passed by the Houses of Representatives and Senators, this bill was considered approved and, therefore, has become a federal law.

We have pointed out in our previous issue that this new law is detrimental to mining activity, as it ends up by banning it, in a territory rich in minerals and where many mining projects are beginning to develop. The consequences of this law may turn out to be very unfavorable for those provinces in which the mining activity has become the mainstay of their economy. This is why many provinces have already shown their intention to go to Court to have the law declared unconstitutional.

Some of the arguments mentioned against the constitutionality of Law 26639 are the following:

(a) The bill of this law on minimum standards was first approved by the House of Representatives (house of origin), and then by the House of Senators (revising house). This House deleted section 17 from the bill passed by the lower house, which established that in the areas potentially protected by the law “the authorization or performance of new activities will not be allowed until the [glacier] inventory is completed and the systems to be protected are defined. If requests for new undertakings are submitted, IANIGLIA will prioritize the completion of the inventory in such area.” The Argentine Constitution provides that in the event that the bill passed by the house of origin is amended by the revising house, the bill must return to the house of origin that “may, with the votes of the absolute majority of members in attendance, approve the bill with the additions or corrections, or insist on the original bill, unless the additions or corrections were made by the revising house by two thirds of the members in attendance” (section 81 of the Argentine Constitution). However, the legislative steps established by the Argentine Constitution were not observed in the case of Law No. 26639.

(b) As section 124 of the Argentine Constitution provides that “the original ownership of the natural resources existing in their territory belongs to the provinces,” it is argued that it is not in the power of the Federal Congress to enact laws concerning the protection of glaciers, as they are natural resources whose “original ownership” belongs to the provinces. This does not seem to be the strongest argument against the constitutionality of this law, because of the distinction that is made between “ownership” and “jurisdiction” as regards section 124 mentioned before.

(c) In any case, Law No. 26639 infringes the principle of reasonability (section 28, Argentine Constitution), as the pure and simple prohibition of lawful activities is not an appropriate way of protecting the environment, specially when there are many instruments to control the environmental quality in which these economic activities take place.

(d) Finally, constitutional validity of Law 26639 is seriously questioned due to the fact that it is not a minimum standards law as provided by section 41 of the Argentine Constitution. Pursuant this section, “The authorities will provide for the protection of this right, the rational use of the natural resources, the preservation of the natural and cultural heritage and biological diversity, and environmental education and information. The Nation must dictate the regulations that contain the minimum standards for protection, and the provinces must dictate the regulations necessary to complement them, without altering local jurisdictions.” A law that forbids the exercise of a lawful economic activity, encouraged by federal regulations (Mining Code, Mining Investments Law, among many others) may not be characterized as a minimum standards law, as the prohibition may not be a “minimum standard” of anything. The “prohibition” is a maximum standard, not a minimum. In the end, establishing minimum standards must be limited to setting minimum parameters that the provinces must ensure, being able to establish even more strict parameters. But there is nothing stricter than pure and simple prohibition, by which is demonstrated that Law 26639 is not a “minimum standards” law. In fact, Decree No. 1837/08, by which the Executive Power vetoed the previous law on the protection of glaciers No. 26418 (which contained provisions similar to the ones contained by the recently enacted law), expressly disqualified the prohibition as an environmental minimum standard for being excessive.

Although it is necessary to wait for judgments on this issue, which without doubt will end up in the Supreme Court of Justice, on November 2 the first ruling on the matter was issued. The judge in charge of the Lower Court on Federal Matters No. 1 of the Province of San Juan decided, in the “A.O.M.A and others v. Federal Government / unconstitutionality action” case, for the precautionary suspension of several sections of Law No. 26639 within the territory of that province.

Province of San Juan

Juzgado Federal de San Juan No. 1 [Lower Federal Court of the Province of San Juan No. 1], 11/02/2010, “A.O.M.A and others v. Federal Government / unconstitutionality action”
The judge in charge of the Lower Federal Court of the Province of San Juan No. 1 granted a precautionary measure requested by Plaintiffs and ordered the suspension of sections 2, 3, 5, 6, 7 and 15 of the Law No. 26639 on Minimum Standards for the Protection of Glaciers, on the following grounds: (i) This provisions contained in the law may be in conflict with the Argentine Constitution, as this states that “the original ownership of the natural resources belongs to the provinces” (section 124, Argentine Constitution), and recognizes the local authorities’ power to set up the standards for environmental protection that they consider appropriate for their communities. Although the Federal Congress has the power to dictate the laws on minimum standards of protection, local jurisdictions are maintained and cannot be altered (section 41, Argentine Constitution). (ii) The prohibition of activities contained in this law is excessive and may not be part of an environmental minimum standards law. (iii) Such prohibition creates uncertainty and affects the right to perform lawful activities (section 14, Argentine Constitution); affecting the economic development of the provinces as well, due to the impossibility of performing any kind of works or activities within the Andean area, that may well be authorized and carried out with care for the environment. Regarding this matter, please refer to “The Law on Minimum Standards for the Protection of Glaciers Was Enacted: Its Constitutionality is Controversial.”

National

Law 26639, sanctioned on 09/30/2010, enacted on 10/28/2010 (published in the Official Gazette on 10/28/2010).
It establishes the minimum standards for the protection of glaciers and periglacier environment (regarding this law, see the September issue of our Newsletter).

Resolution 78/2010 enacted by “Secretaría de Minería” [National Mining Secretariat] on 10/19/2010 (published in the Official Gazette on 10/22/2010).
This resolution establishes that vehicles and non-stationary mining equipment that enter or exit a mining project and are affected by the Mining Investment Law, No. 24196, shall place a satellite tracking device. This device must allow for establishing the location of the vehicle at all times, with the aim of determining its mining use. Also, it must record current or historic location within the territory of the Argentine Republic and the area of the Argentine-Chilean Mining Integration and Complementation Treaty, as well as its position and speed.

Province of Buenos Aires

Decree 1766/2010 (published in the Official Gazette on 10/19/2010). Parks and Natural Reserves.
This decree regulates Provincial Law No. 14126, which declared that the area “La Poligonal” in Tandil is a protected landscape of provincial interest. It establishes the procedure for the restructuring plans of the mining exploitations currently in activity. The “Organismo Provincial para el Desarrollo Sostenible” [Provincial Agency for Sustainable Development] is in charge of evaluating the plans submitted by the owners of the mining exploitations. As regards Law No. 14126, please refer to our March 2010 issue, “La Provincia de Buenos Aires prohíbe la explotación de canteras en la ciudad de Tandil.”

Province of Catamarca

Decree 1148/2010 (published in the Official Gazette on 10/19/2010).
This decree provides for the update of the sum to be received by the provincial authority as a royalty for the use of Public Waters, set by 1973 Provincial Law on Water No. 2577. The decree establishes a different collection method, either for the use of surface water or groundwater; mineral, thermal and radioactive; and the use of Public Water intended to hydroelectric power generation. Concerning the use of surface water, the royalty varies according to the source of the water: from a reservoir (AR$0.006/m3), a water intake (AR$0.005/m3) or precarious (AR$0.004/m3). For groundwater, the amount does not vary (AR$0.025/m3). In both cases, for the mining activity the royalty will be adjusted by a 36% rate. If the individual is not able to provide the information about the amount of water extracted, the decree stipulates how to calculate the royalty to be paid.

“La Argentina se posiciona como el cuarto productor mundial de litio,” published in “El Inversor Energético & Minero – Newsletter Diario” (City of Buenos Aires) on 10/05/2010.
Local obtaining of this resource grew 6.67% (almost 0.5 percentage points over the global average). Chile, Australia, China and this country currently have the largest productive capacity in the field, but it is estimated that Bolivia might lead the business in the short or medium term. According to a report by the United States Geological Survey, on the past year national lithium production grew 6.67%, that is, it went from 3,000 to 3,200 metric tons (MT). In this way, Argentina kept itself at fourth position among the world’s largest producers, only below Chile (which extracted 12,000 MT, i.e. 900 more than in 2007), Australia (which decreased from 6,910 to 6,900 MT) and China (which grew from 3,010 to 3,500 MT).

“La Rioja cobrará el 22% de las utilidades mineras a la producción de uranio,” published in “El Esquiú” (Province of La Rioja) on 10/07/2010.
The governor of the Province of La Rioja Luis Beder Herrera announced that he is close to signing an agreement with a company to grant a uranium concession in the area of Los Colorados, and said that the province will have a 22% share in the utilities from the exploitation. Los Colorados is an area located few kilometers from the locality of Patquía, on route 74 to the city of Chilecito. Few kilometers away, in the locality of Amaná, there was already uranium exploitation in the 70’s. On the other hand, it is well known that the national-provincial state-owned company Dioxitek has already bought lands north of the capital city of the Province of La Rioja, on national route 38.

“Encuentran más oro en la Argentina,” published in “La Nación” (City of Buenos Aires) on 10/07/2010.
Latin American precious metals mining company Hochschild Mining said it has made a new discovery of high-grade gold and silver in its San José project in Argentina, which, as the company expects, will extend the resource’s life. The company found five kilometers of high-grade gold and silver veins, corresponding to nine new veins and to the extension of two known veins, as a result of an intensive drilling program during the nine first months of 2010. “The results, which are expected to significantly extend the mine’s life, show the significant geological potential of the district,” said CEO Ignacio Bustamante. Hochschild is going through the resources estimates of the San Jose project and expects to announce updated figures before the end of the month. Today’s announcement follows other recent positive news about the company’s projects at times when it is focused in the development of new projects.

“Salen a buscar negocios e inversiones con China,” published in “Cuyo Minero” (Province of San Juan) on 10/07/2010.
With the object of promoting investment and trade opportunities with China, the National Mining Secretariat encourages joint participation of the Argentine mining sector in China Mining 2010, which will take place from November 16 to November 18, 2010 in the city of Tianjin, China. There, the Third Seminar on Mining Investment Opportunities in Argentina will also be presented, on November 17, with the attendance of mining operators, investment analysts, business entities and companies from China and other countries of the region.

“Santa Cruz: IRL actualizó el estudio de factibilidad del proyecto Don Nicolás,” published in “El Inversor Energético & Minero – Newsletter Diario” (City of Buenos Aires) on 10/08/2010.
Minera IRL, owner of the Don Nicolas project –located near Tres Cerros in the Province of Santa Cruz– announced in a press release the update of the feasibility study for that prospectus. As one of the main features of the document, the company expects to complete the feasibility studies by mid-2011 and to begin production in 2012. Also, it states that the drilling program has been completed on Solfuro and Martinetas veins, obtaining results that include 5.9 meters with 18.17 grams of gold per ton (t), 12.85 meters with 9.98 grams of gold per ton, and 6.8 meters with 15.7 grams of gold. The feasibility study for the Don Nicolas project began early this year, based on the development of the Solfuro and Martinetas veins. Both deposits hold most of the gold resources, which consist of 202,000 indicated ounces of gold and 158,000 inferred ounces of gold. The exploration program was completed with a total of 96 diamond-core drillings that sum up to 13,056 meters in Solfuro vein, defined on a strike of about 700 meters and at a depth of more than 240 meters. As regards Martinetas vein, the company explained that the final results on the assays have not been received yet.

“Chubut aprobó nueve proyectos para buscar uranio,” published in “El Inversor Energético & Minero – Newsletter Diario” (City of Buenos Aires) on 10/12/2010.
The government of the Province of Chubut approved nine mining projects in the past two months. According to the official gazette, four companies have permits to carry out exploration activities on the central plateau. Four enterprises are authorized to search for nuclear minerals and five are authorized to search for first and second-class minerals. The company that was most favored by the permits was Energía Minera, specializing in uranium exploration. It is followed by Canadian company Madero Minera SA, English Uramerica, specializing in the same field; and the Spanish Tolsa. The surfaces go from 3,000 hectares to 10,000. The undertakings are spread along the departments of Mártires, Paso de Indio and Escalante. To begin the works, they only have to submit the environmental impact reports.

“Dique de cola: San Juan hará punta con legislación,” published in “Diario de Cuyo” (Province of San Juan) on 10/25/2010.
The Mining Secretariat of the province is working on a draft bill to regulate the construction, management and closing of the tailings dams, the waste material from the metal extraction process. This was stated by sources from the mining entity and the Committee on Mining of the House of Representatives, whose president Pedro Horacio Espejo, from Jachal [Province of San Juan], assured that the bill may soon be treated in the house. The details of the draft bill have been closely guarded, but it is known that it will be about seismic-resistant construction, maintenance and care after the closing of the mine. The province wants to pioneer legislation on this matter –there are no laws on tailings dams even in mining countries such as Chile and Peru– to anticipate possible charges from the national opposition, as happened with glaciers. “There are rumors about national anti-mining groups planning to press forward on this matter, even asking for prohibitions,” said national Representative Daniel Tomas (head of the Committee on Mining of the lower house), to explain the province’s idea of designing a regulation that provides the general rules for this type of works. In the case of the law on glaciers protection, San Juan and other mining provinces anticipated the sanction of a law adverse to this industry, and passed their own rules and regulations appealing for their constitutional rights to autonomy and federalism.

“Suspenden la aplicación de la ley de glaciares en San Juan,” published in “Diario de Cuyo” (Province of San Juan) on 11/02/2010.
Federal Judge Miguel Galvez decided this morning to suspend the application of 6 sections of the law on glacier protection that the Congress approved last month. In a quick procedure —the filing was made yesterday by businessmen and trade-unionists— the judge granted a precautionary measure, until the subject matter is solved. Jaime Berge, president of the Mining Chamber of the Province of San Juan estimated that the issue is now going to the Supreme Court of Justice. The local delegation of the “Confederación General del Trabajo” (CGT) [General Confederation of Labor] and several business chambers filed yesterday with the Lower Court on Federal Matters No. 1 of the Province of San Juan a precautionary measure and challenged the constitutionality of the new law on the protection of glaciers that was enacted past Thursday. Berge, seconds after being notified of the decision, said that “the suspension of the application of the law within the territory of the Province of San Juan, as was requested, has been decided.” Later, Federal Judge Miguel Galvez said to “Radio Antena 1” that he suspended sections 2, 6, 5, 6, 7 and 15 of the law and confirmed that his decision is applicable only within the Province of San Juan. Speaking of the future of the law, Jaime Berge ventured that it will probably end up in the Supreme Court of Justice. Likewise, the attorney for AOMA (“Asociación Obrera Minera Argentina” - the mineworkers trade union), Javier Campora, considered the ruling is “a recognition of provincial autonomy.” “I want to highlight the union between workers and businessmen, which have left their differences aside and worked together for San Juan,” he declared. When asked about Governor Gioja’s participation in the design of the defense strategy, the union attorney answered: “Total. He asked for this, he asked us not to leave him alone, because he understands that this is not an issue for the mining industry but for everyone in San Juan.”

Provincia de San Juan

Juzgado Federal de San Juan Nº 1, 02/11/2010, “A.O.M.A y otras c/ Estado Nacional s/acción de inconstitucionalidad”
El juez a cargo del Juzgado Federal de San Juan N° 1 decidió conceder la medida cautelar solicitada y disponer en consecuencia la suspensión de los artículos 2, 3, 5, 6, 7 y 15 de la Ley 26.639 de presupuestos mínimos para la protección de glaciares, en base a los siguientes argumentos: (i) El enfrentamiento con normas de carácter constitucional, en cuanto establece que “corresponde a las provincias el dominio originario de los recursos naturales existentes en su territorio” (art. 124, Constitución Nacional), y a la vez, reconoce a las autoridades locales la facultad de aplicar los criterios de protección ambiental que consideren apropiados para la comunidad que gobiernan, dado que si bien corresponde a la Nación dictar las normas que contengan los presupuestos mínimos de protección, se mantienen las jurisdicciones locales, que no pueden ser alteradas (art. 41, Constitución Nacional). (ii) La prohibición de actividades contenida en la ley resulta excesiva y no puede constituir parte de un presupuesto mínimo ambiental. (iii) Dicha prohibición de actividades genera incertidumbre y afecta el derecho a ejercer industrias lícitas (art. 14, Constitución Nacional); afectando además el desarrollo económico de las provincias afectadas, por la imposibilidad de desarrollar cualquier tipo de obras u actividades en la zona cordillerana que podrían en realidad autorizarse y desarrollarse en perfecto cuidado del ambiente. En relación con este tema, remitimos a lo expuesto, en “Fue promulgada la ley sobre presupuestos mínimos para la protección de glaciares: Su discutida constitucionalidad”.

Nacional

Ley 26.639, sancionada el 30/09/2010, promulgada de hecho el 28/10/2010 (publicada en el Boletín Oficial el 28/10/2010)
Establece el régimen de presupuestos mínimos para la protección de los glaciares y del ambiente periglacial (respecto de esta ley, ver la edición anterior de nuestra Newsletter, del mes de septiembre de 2010).

Resolución 78/2010 dictada por la Secretaría de Minería el 19/10/2010 (publicada en el Boletín Oficial el 22/10/2010)
Esta resolución establece que los vehículos automotores y equipos mineros no estacionarios que ingresen o egresen a un proyecto minero y que se encuentren alcanzados por la Ley 24.196 de Inversiones Mineras deberán colocar un dispositivo de rastreo satelital que permita establecer la ubicación del bien en forma permanente, con el fin de determinar el uso minero. El dispositivo debe permitir la ubicación actual o histórica del bien en cualquier lugar del territorio de la República Argentina y en el área del Tratado de integración y complementación minera argentino-chileno, registrando en forma permanente su posición y velocidad.

Provincia de Buenos Aires

Decreto 1766/2010 (publicado en el Boletín Oficial el 19/10/2010). Parques y Reservas. Reglamenta la Ley Provincial N° 14.126 que declaró Paisaje Protegido de Interés Provincial el área denominada “La Poligonal”, partido de Tandil.
Establece el procedimiento a seguir de los planes de reconversión de las explotaciones mineras actualmente en actividad. El Organismo Provincial para el Desarrollo Sostenible es el encargado de evaluar los planes presentados por las empresas titulares de las explotaciones mineras. Con relación a la Ley N° 14.126, remitimos a lo expuesto en nuestra edición de marzo de 2010, “La Provincia de Buenos Aires prohíbe la explotación de canteras en la ciudad de Tandil”.

Provincia de Catamarca

Decreto 1148/2010 (publicado en el Boletín Oficial el 19/10/2010). Aguas. Servicios Públicos. Modelo de cobro de canon por uso de agua pública.
Prevé la actualización del monto a percibir por la autoridad provincial en concepto de canon que se abona por el uso de Agua Pública, establecido en la Ley Provincial de Aguas N° 2577, del año 1973. El decreto establece un método distinto de cobro, sea por el uso de agua superficial; subterránea; mineral, termal y radioactiva; y el uso de Agua Pública con destino a la producción de energía hidráulica. En caso del uso de agua superficial el valor del monto por metro cúbico extraído varía según el origen del agua, sea de embalse ($0,006/m3), con toma fija ($0,005/m3) o precaria ($0,004/m3). En cambio, del agua subterránea el monto siempre es el mismo ($0,025/m3). En ambos casos, para la actividad minera, el valor del canon será ajustado por un coeficiente del 36%. Si el particular no tuviera la capacidad para proveer la información a la autoridad competente, de la cantidad de agua extraída, la misma norma prevé una fórmula matemática para calcular el valor del canon que tuviera que abonar.