Mining en La Frontera: New Mining Treaty Between Argentina and Chile

Publication year1998
Pages135
27 Colo.Law. 135
Colorado Lawyer
1998.

1998, June, Pg. 135. Mining en la Frontera: New Mining Treaty Between Argentina and Chile




135


Vol. 27, No. 6, Pg. 135

The Colorado Lawyer
June 1998
Vol. 27, No. 6 [Page 135]

Specialty Law Columns
Natural Resource and Environmental Notes
Mining "en la Frontera": New Mining Treaty Between Argentina and Chile
by E. Dale Trower, Pilar Piñeiro

On December 29, 1997, Presidents Carlos Menem of Argentina and Eduardo Frei of Chile signed a new treaty1 designed to stimulate mining investment and coordinate mining sector development along the border ("la frontera") between the two countries. Four years in the making,2 the Treaty between the Argentine Republic and the Republic of Chile concerning Mineral Integration and Facilitation ("Treaty") is one of a number of bilateral and multilateral agreements to which Argentina and Chile are a party.3

Pursuant to the Treaty, the two republics establish a common legal framework to be applied to Negocios Mineros ("Mining Businesses") along their shared 5,000 kilometer Andean mountain border.4 The Treaty is applicable within nine specific geographic zones along the common boundary of the two countries. These zones vary in width from 15 kilometers ("km") to 190 km wide on the Chilean side of the border and from 20 km to 220 km wide on the Argentinean side. They are described by geographic coordinates and shown on a map in the annexes to the Treaty.5 Among the frontier areas in which the Treaty does not apply is the shared Continental Glacial region in the south. This decision was reached by the parties following protracted negotiations that delayed and threatened to de-rail the accord.6

As the mining industry has continued to move off-shore, and particularly into Latin America, mining law has become an international practice. To continue to be of value to their U.S. clients, members of Colorado's large mineral bar find themselves needing to stay abreast not only of domestic legal developments, but those in the major mining nations of South America, particularly Chile, Peru, and Brazil. This new Treaty has real potential to expand Chile's gold and copper rush into Argentina, a nation that has never been a serious player in the mining world, but one that bears watching in light of both its vast potential and President Menem's ambitions to realize this potential

Background

Mining plays a distinctly different role in the two countries. Chile, a nation of only 14 million people, is the world's largest producer of copper, and the tenth largest producer of gold.7 It is also the site of vast deposits of nonmetallic minerals. The list of foreign mining companies working in Chile is extensive, and Santiago rivals Denver in the number of major mining companies with offices there. The star of South American economies over the last several years Chile, with but a quarter of the gross domestic product of Argentina, is now the home to eighteen of the top 100 Latin American corporations.8

Argentina is the second largest country in South America in size and, with a population of 34 million, is also second in number of inhabitants. A country of great natural resources its international trade reputation relates primarily to foodstuffs, such as beef, wine, and grains. Following years associated with hyper-inflation, its currency began to stabilize when it was pegged one-to-one with the U.S. dollar in 1991.9 In 1997, it experienced less than 1 percent inflation and had economic growth of 7.9 percent, the strongest in the region.10

While mining has existed on a modest scale in Argentina for many years, mining as a major industry is in its infancy With only one international-class mine11 and...

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