PERU: A MINING COUNTRY (ENGLISH VERSION)

• Jurisdiction: Derecho Internacional

Mineral Development in Latin America
(Nov 1997)
CHAPTER 2F
PERU: A MINING COUNTRY (ENGLISH VERSION)
José Antonio Olaechea
Estudio Olaechea
Lima, Peru

Peru is traditionally a mining country and an important exporter of minerals.

Mining is one of the principal sources of foreign exchange and employs a large percentage of the Peruvian labor force.

The Peruvian Government, being well aware of the importance of mining in the economic and social development of the country has proclaimed a series of dispositions aimed at promoting development and providing guaranties to mining investors.

Following this brief introduction, we shall analyze the more important legal aspects concerning mining in Peru.

Constitutional Framework:

In accordance with the provisions of article 66 of the Political Constitution of the State, all natural resources, both replaceable and irreplaceable, belong to the nation. That is, the Peruvian Constitution chooses, with respect to natural resources, the system which the doctrine shall denominate as public domain or domainal system.

The Constitution reserves the control of the conditions of utilization and granting of natural resources to individuals to the Organic Law.

According to the foregoing, we are going to review the main aspects of the Peruvian General Mining Law.

General Mining Law

In June 1981, was enacted Legislative Decree 109, "General Mining Law". In November 1991, was enacted Legislative Decree 708, "Law for the Promotion of Investment in the Mining Sector", the rules of the latter partially amending the General Mining Law.

In order to compile the legislation, on June 4, 1992, Supreme Decree 14-92-EM was issued through which the Single Ordered Text of the General Mining Law was approved, the form of

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which, with some small amendments, now regulates mining activity in Peru.

Concession Systems:

Peruvian Law qualifies the following as mining industry activities: sampling, prospection, exploration, exploitation, general labor, beneficiation, marketing and mining transport.

Exercising the said activities, with the exception of sampling, prospection and marketing are carried out solely under the concession system.

Sampling and prospection are free in all national territories; nevertheless, they may not be carried out in areas where mining concessions exist, or areas of non admission of claims, fenced or cultivated areas, urban zones or for urban expansion, zones reserved for national defense, archaeological zones and over properties for public use.

In addition, the marketing of mineral products is free, internally and externally, and its practice does not require any kind of concession granted.

Nature of the Concession:

Peruvian Law grants the condition of a real property to a mining concession, providing that it is a distinct and separate property from the ground on which it is located. In this way, the soil and the sub-soil is separated so any principle of accession as a rule of mining ownership is discarded.

On the other hand, it is appropriate to point out that a mining concession grants an in rem right to its titleholder, with the attributes emanating from the mining law and not the Civil Code. As a real property, it may be transferred by an intervivo or mortis causa act, encumbrance, etc.

Ordinary Procedure for Mining Concessions:

To be titleholder of a mining concession, an administrative procedure must be followed before the Public Mining Registry, a public organism, which is a Division of the Ministry of Energy and Mines.

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Following there is a very general description of the procedure for granting concessions:

1. The procedure starts with the filing of the petition for a mining...