CHAPTER 8 LEGAL RISK CONSIDERATIONS IN MINING INVESTMENT: DUE DILIGENCE CHECKLIST

• Jurisdiction: Derecho Internacional

International Mining Law and Investment in Latin America and the Caribbean
(Apr 2005)
CHAPTER 8
LEGAL RISK CONSIDERATIONS IN MINING INVESTMENT: DUE DILIGENCE CHECKLIST
Cecilia Gonz§les
Estudio Grau Abogados
Lima, Peru

Cecilia Gonz´cmb;ales Guerra is a Partner with Estudio Grau in Lima, Peru. Her Practice Area is Mining. She has experience in Legislation and Contracts in Petroleum, Gas, and Mining Resources, International Development Law Institute (IDLI), 1994.

She earned a Masters in Natural Resources Mining Policy, University of Dundee, Centre for Energy, Petroleum, Mineral Law and Policy, 1996-97. She earned her law degree at Universidad de Lima, 1992.

Prior to joining Estudio Grau as a partner in 1998, she served as an attorney in the Legal Area of the Mining Public Registry. Ms. Gonz´cmb;ales concentrates her expertise lies in Peruvian mining legislation as well as in different international mining regulation systems. Her practice encompasses a great amount of experience in mining contracts and consulting for large, foreign mining concerns in preparing different types of mining contracts (joint-venture, options, and leases, among others). Additionally, she is well versed in environmental and social requirements concerning mining exploration and development projects. Ms. Gonz´cmb;ales has a great deal of legal experience in the public sector with respect to the mining procedures to obtain mining concession rights and government reforms in the mining sector.

1 INTRODUCTION

• Growing number of areas that had previously been off-limits to exploration

• Changing attitude to (foreign direct) investments

2 An Overview of Legal Risk Considerations in Mining Investment

2.1 Tensions between the Public Interest and Proprietary Rights - The Basis of Legal Risk

• The State

• The Mining Property Owner

• The Land Owner

2.2 "Non-Legal" Risks Associated with Foreign Investment

2.3 Certain Legal Concerns of the Foreign Investor

• Expropriation

• Change of law

Is the change in law normal, non-discriminatory which legitimately defines what the foreign investor is entitled to do in the course of its business?

or

Is it excessive and destroys the economic stability and functions of the foreign investor's rights?

• Change of law risk - Sensitive issues

• Mineral tenure regime

• Environmental standards and controls

• Taxes

• Import and export tariffs

• Production and consumption controls

• Labor requirements

3 Due...