Legal Systems and Mining Code

Uruguay’s mining legal regime

Under Uruguayan´s mining law, mineral resources, either underground or outcroppoing are the exclusive property of the state, and are considered separate from the land where they are located. Under the Mining Code, the state may delegate its rights to individuals or companies, regardless of their nationality, by licencing 3 different types of mineral rights: Prospecting Permit, Exploration Permit, and Mining Lease.
The Mining Industry is regulated mainly by the Mining Code , passed in 1982 with a few minor changes, and the Law of Protection of the Environment.
Classification of Minerals

Under the Mining Code there are four types of minerals:

Class I which includes all energy minerals including Oil and Gas.
Class II which includes all mineral deposits designated by the Government as Mineral Reserves
Class III all minerals not included in classes I , II or IV.
Class IV construction minerals which do not need a chemical process to be used: i.e. sand and gravel.
Class III minerals are available for individuals and companies to prospect, explore and mine .i.e. all metallic minerals as well as semiprecious stones, gems, marbles and granites and other decorative stones.
Mineral Licences

The National Directorate of Mining and Geology (DINAMIGE ) a unit of the Ministry of Industries, Energy and Mining, is the authority that regulates mining activities and issues Mineral Licences.
In the case of Exploration Permits and Mining Leases, an Environmental Impact
Study has to be approved by the National Directorate of Environment ( DINAMA), a Unit of the Ministry of Housing, Territorial Planning and Environment.
Both ,indivuals and companies, National or Foreign may apply with no restrictions for any of the licences.
Mineral rights may be freely assigned or transferred to those qualified under the Mining Code.
Transfers of shares in companies holding mineral rights are not restricted by law or regulations.
Titleholders are granted exclusive access to the areas covered by the permits , and have the exclusivity to apply for subsequent licenses

Prospecting Permit:
Grants the right to carry out works aimed at searching for one or more mineral deposits in a given area , for up to 3 years ( no drilling allowed ). Some of the works allowed include: mapping , rock chip sampling, geophysics, trenches, bulk samples for metallurgical assays, and airborne magnetic surveys.

Exploration Permit :
Confer the right to prove the existence of a deposit and evaluate it, identifying its characteristics, quality and fineness of the minerals, as well as making the economic assessment. Drilling permitted. The holder of this license is allowed to set up a pilot plant, once he has been given the proper authorization. This type of permit can last for 4 years.

Mining License ( Concession to exploit ):
Grants rights for exploitation of a mineral deposit and is normally issued for the period necessary for full exploitation of the deposit. This mineral title may be rented or mortgaged.

Surface rights

The ownership of mineral rights does not cover the ownership of land, where the mineral deposits are located.
Therefore, it is necessary to create an easement right over the mineral prospecting, exploration or exploitation area in order to carry out the mining activities.

Landowners are to be compensated during the Prospecting/Exploration stages, and are entitled to a Royalty in the case of a Mining Lease.

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