Amendments to the New Federal Mining Agreement
Finally on June 13 most of the mining Provinces agreed on certain amendments to the New Federal Mining Agreement (signed in February 2017). The agreement must be approved (or rejected) by the National Congress and by the provincial legislatures. The Provinces of La Rioja, Chubut, La Pampa and San Luis did not sign this agreement.
The major amendments to the prior agreement were:
- Elimination of the Fund to be managed by the National Secretary of Mining and to be funded by 1% of the annual total gross revenues arising from the commercialization of the mining products (with no other deductions but substances the VAT).
- Each province will decide on whether to apply or not the royalties limit up to 3% of sales without cost deduction. Currently, the provinces limit the royalties to 3% of the sales minus certain expenses (pithead value). The new formula for royalties shall only apply to new projects.
- Each province will decide whether to charge or not an additional contribution with the purpose of setting up public trust funds for works and social development. This is already happening in some provinces, where several mining projects’ have accepted to make this type of contributions as part of the process for obtaining the environmental permits or social license.
- A provision was included in the environmental chapter setting forth the authority of the provinces over the use and control of the natural resources located in their territories.