Last Thursday, the Legislature of Mendoza began the discussion of four initiatives related to mining.
The initiatives include the Environmental Impact Statement for the San Jorge Copper Project, located in the department of Las Heras, and two legislative proposals aimed at updating the provincial regulatory framework: the Special Mining Royalties Regime and the creation of an Environmental Compensation Fund.
A new mining royalties scheme for Mendoza
The mining royalties bill proposes to establish the conditions for the collection and distribution of economic resources generated by the extractive activity.
As explained by Senator Martín Kerchner, Mendoza already has oil and mining royalties laws. The aim is to comply with National Law 24.196 on Mining Investments, which sets a maximum of 3% on the “mine mouth” value.
The Director of Mining, Jerónimo Shantal, detailed that the new scheme incorporates progressive and variable royalties, adjusted to the operating margin of each venture.
“The ceiling is set by the national law. We propose a system similar to that of hydrocarbons, where reductions must be justified by specific investment plans,” Shantal explained.
In the case of the San Jorge Project, the scheme starts from the maximum allowed, and any reduction must be accredited by the company and verified by the Mining Environmental Authority.
Distribution of resources
The proposal establishes that 88% of the royalties collected will go to the province’s General Revenues. Of this collection, 15% will be allocated to the Socio-Environmental Development Fund.
The remaining 12% will be distributed among the municipalities where extraction takes place, provided they adhere to the new regime. These funds must be exclusively allocated to public works and social, environmental, or productive infrastructure.
Environmental Compensation Fund: a tool for all types of projects
Another initiative discussed was the creation of the Environmental Compensation Fund, which seeks to provide the province with a tool to address collective environmental damages, restore ecosystems, and promote preventive policies within a framework of sustainable development.
The Deputy Secretary of Environment, Nuria Ojeda, clarified that the fund is not limited to mining, but covers any project requiring an environmental impact assessment.
“There is some confusion thinking it only applies to mining development. In reality, it covers all types of projects carried out in the province,” Ojeda explained.
The amounts established in the impact studies, once approved with a public hearing, will be allocated to the fund, which will be managed by the Ministry of Energy and Environment.
The regulations will define the financial management system, control mechanisms, and usage procedures, allowing for better measurement of cumulative effects in the territory.
Territorial coordination and predictability for investments
During a virtual intervention from the United Arab Emirates, Minister Jimena Latorre emphasized that the project’s objective is to generate predictability for investments, without becoming an obstacle to mining development.
“All the provinces in the Copper Board have their royalty law, except Mendoza. Companies know they must pay; what was missing was regulating the payment method, distribution, and other practical aspects,” she noted.
Ojeda concluded that the fund will allow for more agile responses to the environmental demands of the territory, coordinating efforts between the Province, Irrigation, and the municipalities.
