Over the past two decades, mining has steadily grown in Argentina. With the country facing difficulties during the global economic crisis which impacted the mining industry, they have an increased amount of mining opportunities. We speak with Jorge Vargas Gei, who sheds some light into what the mining industry is like in his jurisdiction.
What are the common legal disputes you deal with in regards to mining? Have these cases increased from when you first started out in the legal sector?
In Argentina, the mining code states that the miner can force the surface owner to sell their land, in order to develop a mining project. However, sometimes it is very difficult to get to an agreement, usually over the price of the land. In recent years, disputes with surface owners have increased. In the past, getting to agreements with surface owners for the purchase of land, where mine sites and mining facilities are built was not as straightforward; there was rarely any specific demands, however, since the mining sector has become well known, surface owners have become more tough.
For example, we are currently dealing with fifteen owners of a property that a client needs for the development of their project in the province of San Juan, and each of them have their own expectations and requests.
What difficulties do you face when trying to settle disputes – how can the regulations develop in order to minimalise this?
We are sometimes faced with the issue that the mining authority of any province, does not want to make a decision that is against local individuals. Politically, it is ‘unfriendly’ that a local authority rules against a local individual in favour of a foreign miner. For example, we recently had to get permission to enter a property in Santa Cruz province, and, even though the mining code is clear in this aspect, the authority does not rule in favour of the miner.
I believe the regulations are clear, and that it is the local provincial authorities that need to interpret and actually apply them.
What is the most challenging aspect of mining law and how do you overcome these challenges?
In my opinion, the most challenging aspect of mining law are the differences that exist among the provincial governments and how to deal with the mining activity. Some provinces allow mining activity and others do not. It is important that the provincial governments understand that the mining sector complies with the highest international mining and environmental standards, and that it is an activity that requires passion and dedication.
With disputes involving ‘who owns minerals’, what is the general overview on how to settle such a dispute?
In Argentina there is a federal structure, whereby the provinces are the owners of the natural resources, such as oil, minerals, water.
We are currently dealing with a dispute of this kind in the province of Chubut, where a company challenged the mining rights of our client. The dispute is going through its fourth year now. Ideally, at our law firm we would try to settle such dispute with an agreement with the counterparty, but sometimes there are political interests behind disputes, which make an agreement almost impossible to reach.
How is mining law addressing environmental protection in Argentina?
Environmental law in Argentina is tough, probably tougher than any other sector. In addition, environmental groups put pressure on provincial governments to strengthen regulations. There is a federal law, which sets the minimum standards, and provincial governments that regulate on top of that. A good example is how in Mendoza, a province that has several potential projects, environmental regulations have eliminated the possibility of any mining activity in such province.
Jorge Vargas Gei
Peru 930, 2nd Floor, Mendoza
+54 261 429 37 37
Jorge joined the firm in 2001 and has since then completed a Master in Business Law at the University of Wales (UK) in 2003, an MBA in 2006 and has undertaken a postgraduate study in partnerships and corporate law in 2005.
Since its beginning, Vargas Galíndez Abogados has developed its expertise in several law areas mainly civil, commercial, corporate, mining, labour and administrative, delivering services to national and international corporate clients. The firm counts on the experience, suitability and capacity of our people, who are permanently attending and actively participating in local, as well as national and international courses and seminars, in order to be in the vanguard of the professional practice.