Since the 1990s, Argentina’s mining industry has experienced a fast-paced development and become one of the leading business sectors in the country. Argentina’s mining reserves are comparable to those of Chile, Bolivia and Peru, and offer opportunities in minerals such as gold, silver, copper, molybdenum, uranium, lithium and rare earths. This document summarizes the key tax aspects of the industry.
Since the early 1990s and as a consequence of a new mining policy enacted in Argentina, foreign companies active in the mining industry started to consider Argentina as an investment target. This trend has continued ever since but with different degrees of intensity due to internal (political, economic and provincial legislation) and international (metal prices and the economic crisis) factors.
Argentina still offers large areas that have not yet been explored and possess a wide range of minerals, including metals and industrial minerals, etc., and it is expected that the mining sector will continue to grow and become one of the most relevant sectors for the economy.
II. LEGAL FRAMEWORK
Mining regulations in Argentina are mainly established in the Mining Code, although others may be found in local procedure laws and some special federal laws. It contains regulations in connection with general extent of permits, technical requirements, permit-holder obligations as well as permit limitations.
Property in and to mining natural resources belongs to the provinces. Each province has its own mining procedural law. Even though provincial laws and regulations cannot alter the rights and obligations established by the Mining Code, the process for obtaining and maintaining exploration permits varies slightly from one province to another.
As owners of the mining property, provinces are entitled to the payment of:
The lack of payment of the mining fee could give grounds to the authority for the termination of the mining concession even though this would not apply automatically and prior notice has to be given to the concessionaire.
In addition to the Mining Code and the provincial regulations, Law 24,196 and its amendments (hereinafter, “Mining Investment Regime”) sets forth a promotional regime for investments in activities such as prospection, exploration, development, extraction and refining of mineral ore. Since it was enacted, the Mining Investment Regime has generated significant mining prospecting and exploration activities in Argentina as it provides special benefits that reduce the economic burden and risk of those activities.
III. MINING INVESTMENT REGIME
The benefits of the Mining Investment Regime relevant to the prospecting and exploration stage of a project are the following:
Fiscal Stability means that companies covered by these regulations may not have their overall tax burden increased. The tax burden is set at a national, provincial or municipal level (provided the province has adhered to this law).
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