Mining News - June 2022

Legislative news

Resolution No. 930/2022 issued by the Argentine Securities and Exchange Commission (the “CNV”, for its acronym in Spanish), published on May 13, 2022, in the Official Gazette.

Through this Resolution, the CNV created a "Special Regime for Dual Listing of Foreign Companies" ("Special Regime"), intended for foreign companies listed abroad, to favor the access of foreign issuers to the Argentine capital market and provide investors with new portfolio diversification alternatives at the same time. This Special Regime is directed at foreign entities that request access to the public offering regime in the country to offer the shares in their current capital stock or new shares to be issued and which are listed in one or more foreign markets prior to the request (and which must be duly authorized by the competent regulatory agency).

Resolution No. 5197/2022 issued by the General Directorate of Customs on May 27, 2022, in the Official Gazette.

This Resolution established a minimum reference price of 53 dollars per kilo for lithium carbonate exports to Canada, United States, South Korea, North Korea, China, Philippines, Taiwan, Japan, Thailand, and Hong Kong.

Provision No. 072 issued by the Mining Secretary, published in the Official Gazette of Santa Cruz on May 31, 2022.

Said provision modifies Article 3 of Provision No. 749 dated 1998 and updates the amounts for enrollment in the Registry of Mining Producers, in which a distinction must be made within the first category minerals, setting a higher value for those included in Article 3 “a” of the National Mining Code (gold, silver, platinum, mercury, copper, iron, lead, tin, zinc, nickel, cobalt, bismuth, manganese, antimony, wolfram, aluminum, beryllium, vanadium, cadmium, tantalum, molybdenum, lithium, and potassium).

Provision No. 073 issued by the Mining State Secretariat, Mining Authority in First Instance, published in the Official Gazette of Santa Cruz on May 31, 2022.

According to Article 7 of Law No. 1992, all mining companies that develop their activity in the province are required to use the Mineral Transportation Guides. With this new Provision, the value of each Mineral Transport Guide is established in AR$ 127, repealing any other provision that opposes it.

Decree No. 1057 published in the Official Gazette of Catamarca on May 31, 2022.

Through Decree No. 1092 dated June 10, 2021, the Province regulated Law No. 5642 regarding the Allocation of Mining Royalties. Said Decree modifies Article 1 of Decree No.1092, which regulates Articles 7 and 8 of Law No. 5642, in order to allow the participation of the Legislative Power representatives and the Municipalities in which the mining projects are located, as well as the native communities,  to allow greater participation and transparency in the allocation of the funds coming from the mining activity, thereby creating the Zonal Project Committee for the elaboration, evaluation and approval of infrastructure, investment and productive development projects to be executed with funds coming from mining royalties. The competent authority shall formally address the Municipalities in which the mining project is located and the Zonal Projects Committee, until March 30 of each year, to put them on notice of the estimated mining royalties’ resources for infrastructure works, investment projects and productive development. 

Resolution No. 40/2022 issued by the Secretariat of Mining, published on May 31, 2022, in the Official Gazette.

This resolution modifies the abbreviated procedure previously established by Resolution No. 26/2021, which is applicable to the infractions established by the Mining Investment Law No. 24196. The new wording of Article 10 establishes that any company registered in the Mining Investment Law Registry that incurs in any of the infringements set for in item “c” of Article 28 (omission of information, delivery of documentation or other obligations required by the enforcement authority), shall be notified within 10 administrative working days to:

(i) provide evidence of having fulfilled the required obligations in the legal term and form; (ii) meet any unfulfilled requirement, attaching the pertinent information and/or documentation; and (iii) submit a defense stating that the breach is not attributable to it, due to force majeure, fortuitous event or acts of third parties beyond its responsibility.

If the Mining Secretariat considers that item (i) has been complied with, the proceedings shall be filed without further action. If item (ii) is observed, the Mining Secretariat shall apply the penalties in items 3 and 4 of Article 29 of the Mining Investment Law. In the event of item (iii), the Mining Secretariat may: (a) order that the summary proceedings continue through the procedure set forth in Article 5 of Resolution No. 26/2021; (b) apply the pertinent sanctions from items 3 and 4 of Article 29 of the Mining Investment Law, or (c) archive the proceedings, depending on the circumstances of the case.

In all cases, once the infringement that gave rise to the summary proceedings is verified, the administrative act that determines the application of sanctions shall be issued after a final report and the intervention of the Permanent Legal Service. During the course of the abbreviated procedure and until the penalties are effectively fulfilled, the Secretariat shall provide for the appropriate precautionary measures to protect the tax interest, informing the Argentine Tax Authority if applicable.

Resolution No. 5205/2022 (the “Resolution 5205”) issued by the Argentine Tax Authority (AFIP, after its acronym in Spanish) and the Mining Secretariat, published in the Official Gazette on June 9, 2022.

This resolution replaces and repeals Resolution No. 4428/2019 and establishes amendments to the refund procedure of the amounts paid in excess due to the violation of the tax stability set forth in Article 8 of the Mining Investment Law No. 24196. Resolution 5205, in force as from June 9, 2022, introduces operational and control adjustments to said procedure and includes new requirements, clarifying the documentation that must be submitted to request such refund. In addition, Resolution 5205 also establishes that the refund and/or accreditation requests submitted under the framework of Resolution No. 4428/2019 shall be analyzed and, if applicable and upon request of the Mining Secretariat, readapted to the new Resolution.

Decree 308/2022 DCTO-2022-308-APN-PTE: Creation of the Copper Exports Optional Registry, published on June 14, 2022, in the National Official Gazette.

The decree creates the “Copper Exports Optional Registry” which shall apply throughout the territory of the Argentine Republic, and which aims to promote mining activity through a scheme of progressive export duties for copper projects. Legal entities established in the country, or authorized to act within its territory, which make investments for the start-up of new productive projects, may choose to be included in the Registry. The progressive rate will be optional for companies, since before starting the investment project they may choose to remain for 30 years with the  4.5% fixed tax or use the variable rate scheme depending on the price evolution.

Decree No. 017 published in the Official Gazette of La Rioja on June 21, 2022.

Decree No. 017 establishes that the head of the Provincial Executive shall be the provincial authority empowered to grant, after a preliminary hearing, legal effectiveness to the final resolution issued by the Authority of Application, for the granting of permits, mining concessions, extension and improvement of mining properties, mining rights assignment authorization , as well as to declare the expiry or nullity of permits and concessions. Prior to the issuance of the final resolution that concludes the procedure, the Authority of Application, shall submit the proceedings to the Provincial Executive so that, after consideration on the merits, it may decide upon a hearing, for the purpose of its effectiveness and subsequent publication.

Repeal of Article 11 of Law No. 1181-A - Chamber of Deputies of San Juan.

The application of Article 11 of Law 1181-A regarding the prohibition to offset energy infrastructure works with mining royalties was declared null and void. For mining companies to invest in electricity infrastructure, those who make economic contributions or pay for such works for the benefit of the province may offset the value of their investment with mining royalties.

Mining in the media

 

“Mining contributed more than USD 53 million to the country in two decades,” article published by A24 on 05/31/2022.   

The activity showed a surplus in its foreign exchange balance for all the months between 2003 and 2021, with a total net contribution of foreign currency in the order of USD 53,813 million, according to a CEP XXI report. 

“The first remotely operated mine in the country was presented”, article published by Diario Popular on 06/02/2022. 

A teleoperation system was introduced at the Cerro Negro deposit, in the province of Santa Cruz, which became the first mine in Argentina to operate machines remotely from the surface. With this system, the operators who had to go down the mine will work connected from the surface through remote control. Santa Cruz is the first province to achieve this type of investment. 

“Another mining landmark: the first auriferous operation was launched”, article published by El Tribuno on 05/06/2022.

The ceremony took place in Mina Lindero, which is operated by Mansfield Minera S.A. from the Canadian company Fortuna Silver Mines Inc. This is the first open-pit gold mine in Salta’s history,  a gold and silver porphyry located in Salar de Arizaro, department of Los Andes. It is a significant achievement in terms of development, technology, economic growth and local progress. In addition, in just one year of operation, gold became the second most exported product of the province, accounting for 18% of our exports.

“Mining has been an important booster in the economic recovery” article published by Télam Digital on 05/10/2022.

Mining has been an important booster in the economic recovery thanks to production on the rise and, above all,  new projects coming on track that will have a federal impact on investment, employment and exports.

“Argentina, ready to become the top global producer of lithium,” article published by MiningPress on 05/11/2022.

Argentina is the fourth largest lithium producer and is getting ready to make a leap forward due to the steady progress of projects in the pipeline and the “boom” of investments in the sector, according to Franco Mignacco, Exar’s leader.
According to official data, between 2020 and 2021 lithium mining investment announcements rose to USD 3382,5 million.

“Mining will generate USD 4.000 million in exports by 2022,” article published by Ruralnet on 05/15/2022.

According to official industry estimates, the amount would be 25% higher than in 2021 and would be around USD 4 million. The rise in the international price of commodities and an increase in production would be the main factors.  The announcements of new mining projects and investments seem to be bearing fruit in terms of foreign exchange earnings for the country.

“Josemaria, the largest mining Project in the country,” article published by Ecojournal on 05/19/2022.

The copper megaproject named Josemaría, located in the province of San Juan, will begin earthworks in September, after the winter. Construction will take four years and Lundin, the Canadian mining company leading the project, plans to start the production phase in 2026. In this scenario, the company and the government are analyzing a scheme of mobile export taxes for copper exports, which the company estimates will be around USD 1.1 million a year for 15 years. With these figures, it would overtake the country's oil and gas complex in exports and open the door to a new wave of copper production in Argentina.

“Mining will contribute AR$429 million to Royalties Trust Fund”, article published by El Ancasti on 05/24/2022.

Catamarca´s Governor held a meeting with President Alberto Fernandez and the representatives of the mining company Zijin Minind to sign the agreement between the company and the Province of Catamarca, whereby a millionaire contribution is made to the Mining Royalties Trust Fund.

“Lithium has become the white gold that attracts investments,” article published by Mercado on 06/06/2022.

According to the Secretariat of Mining, Argentina is the world’s fourth largest producer of the resource after Australia, Chile, and China.  The lithium triangle of Argentina, Bolivia, and Chile accounts for about 65% of the world's lithium resources.

“A report on the Provincial Mining Development Plan has been submitted”, article published by Nuevo Diario de Salta on 06/07/2022.

The province of Salta Secretariat of Energy and Mining has promoted the implementation of the “Provincial Plan for Sustainable Mining Development 2021-2030.” The structure of the Plan sets out the vision and mission for the sector, deriving 10 strategic axes for its scope and implementation, proposing a development of the sector based on an articulated work between the different members of the community, through the proposal of various objectives and proposals.

“The new Minister of Productive Development bets everything on attracting investment, making announcements and setting his own agenda for 2023”, article published by TN on 06/16/2022.  

The new Minister of Productive Development, Daniel Scioli, clarified that the focus of his administration will be to attract foreign investment for productive projects in crucial sectors such as mining, lithium and energy. 

"Lithium fever: projects are multiplying, and Argentina is predicted to be the largest producer in South America", article published by IProfesional on 06/21/2022.

Reports confirm Argentina as the country with the largest number of lithium mining projects under development at a global level. The local market displaced the US market in terms of the number of extraction initiatives under development. Lithium will move 40 billion dollars by 2030. According to a report by the foreign trade consultancy B&B, the country has 13 extractive initiatives linked to lithium, while the United States, until five years ago the main player in the market, has 10.

"Mining royalties grow in Salta: The fiscal impact" news published by MiningPress on 06/22/2022. 

The Minister of Economy and Public Services highlighted that mining royalties are rising considerably and have a favorable impact on the province's revenue. Projected mining royalties for 2022 amount to USD 2,668,333 million. Meanwhile, the projection for 2021 was USD 2,496,982 million.