LEGAL FRAMEWORK FOR THE EXPLORATION AND DEVELOPMENT OF URANIUM IN ARGENTINA

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development and Investment
(Apr 2009)
CHAPTER 11B
LEGAL FRAMEWORK FOR THE EXPLORATION AND DEVELOPMENT OF URANIUM IN ARGENTINA
Dr. Hernán M. Zaballa
Brons & Salas
Buenos Aires

Hernán Zaballa is a partner of Brons & Salas in charge of the Natural Resources Department and specialised in Mining Law. He has been involved in many of the most important transactions in the mining industry in Argentina. He has served as counsel for Canadian, American, Australian, South African, Mexican, Chilean, Brazilian and some European and Asian companies doing mining business in Argentina. Among his representative clients we can find mining and oil and gas companies as well as services companies related to the industry. He was educated at the Universidad del Museo Social Argentino in Buenos Aires, Argentina and attended the Academy of American and International Law of the International and Comparative Law Center (Southwestern Legal Foundation, Dallas), where he was awarded the Víctor Folsom Fellowship. He is full professor of Natural Resources Law and associate professor of Administrative Law at the Universidad del Museo Social Argentino. He has also been an associate professor of Post Graduate Courses at the Universidad de Buenos Aires and a Legal Counsel at the United Nations Development Program. Mr. Zaballa is a member of the Prospectors & Developers Association of Canada (PDAC), International Bar Association, American Bar Association, Fundamin (Mining Foundation in Argentina) and the Buenos Aires Bar Association.

The present paper is intended to briefly summarize the regulations applicable to nuclear minerals (specifically including uranium and thorium) in Argentina and in addition evidence the specific characteristics and differences that such regulations has with respect to the general legal regime applicable to non-nuclear minerals.

For such purpose, it is important first to make a brief summary of some of the basic notions arising from the Argentine Mining Code (AMC), and then to address the specific legal regime applicable to nuclear minerals, including the evolution of such legal regime and the specific characteristics currently arising there from.

As a consequence of the aforementioned, the present paper is divided into four sections:

A) Brief Summary on some basic notions arising from the AMC applicable to minerals belonging to the first category as established under the AMC (including both non-nuclear and nuclear minerals).

B) The evolution of the Mining Legal Regime applicable to nuclear minerals.

C) The specific characteristics arising from the mining legal regime applicable to nuclear minerals and the main differences with respect to the general mining regime applicable to non-nuclear minerals.

D) Conclusions.

A) Brief Summary on some basic notions arising from the AMC

Despite the fact that this section does not deal with the specific legal framework applicable to nuclear minerals it is important to briefly describe it, since according to the existing legal regime applicable to nuclear minerals in Argentina, nuclear minerals are assimilated to first category of minerals. Therefore all of the regulations applicable to the non-nuclear first category minerals as defined in the AMC are also applicable to nuclear minerals (unless contradicted or superseded by the special and specific regulations applicable to the nuclear minerals under Title 11 of the AMC).

1. The AMC - Dominion -Competent Authorities - Main Principles

Under the Argentine legal regime, all natural resources belong to the local states (provinces) according to where they are located. As provided by Section 124 of the Constitution "...the provinces have the original dominion over the natural resources existing in their territory".

[Page 11B-2]

Accordingly, the AMC establishes in its Section 7 that "mines are private property belonging to the Federal Government or the Provinces, depending of the territory where mines are located."

The AMC was issued by the National Congress and is uniformly applicable and enforceable by the different provincial authorities in all of the Argentine territory.

The AMC governs the rights, obligations and procedures related to the acquisition, exploitation and use of the minerals, and divides the minerals in three categories according to the importance/value of the minerals.

As main principles contained in the AMC we may describe the following:

— Uniformly enforceable in all Argentina (all provinces).

— Applied by the provincial mining authorities (individually referred hereto as "mining authority")

— Clear and final title to mining concessions is granted in perpetuity and subject to the fulfillment of certain conditions (non-compliance with some of those conditions may result in forfeiture of the mining concession).

— General prohibition for the State to exploit mines.

— Priority of mining activity over surface owners is recognized and established as principle (at least with regard to the first and second category of minerals).

— Mining concessions are assimilated to real estate.

2. AMC's classification of minerals

Mines corresponding to the first category (mainly composed by precious metals and stones and other valuable minerals): This category of mines belongs exclusively to the Province where said mines are located, and can be exploited by private parties only by virtue of a legal concession granted by the competent authority. Minerals such as gold, silver, platinum, mercury, aluminum, solid hydrocarbons, quartz, precious stones -among others- are included in the first category of mines and considered minerals of the first category

Mines corresponding to the second category: The AMC establishes a combined system for their acquisition. This category includes: (i) minerals that based on their importance, are preferentially granted -by virtue of a legal concession- to the owner of the soil/surface (e.g.: niter, saline deposits and peat beds; metals not falling within the first category; and land containing pyrite and alumina, abrasives, ocher, resin, steatites, barite, copperas, graphite, kaolin, alkaline salt or alkaline earth salts, asbestos, bentonites, zeolites or ion-exchanging mineral sand) (ii) minerals that based on the conditions of the mineral deposit, are devoted to common use (e.g.: metalliferous sand and precious stones found in river beds, running waters and placers; clearing lands, tailings and refuse dumps pertaining to previous exploitations, while mines remain without protection and the tailings and refuse dumps of...