URUGUAY OVERVIEW

LEGAL SYSTEM

print page

Under Uruguayan mining law, mineral resources, either underground or outcropping are the exclusive property of the state, and are considered separate from the land where they are located.

The Mining Industry is principally regulated by the Mining Code, passed in 1982 with a few minor changes, and the Law of Protection of the Environment. Under the Mining Code there are four types of minerals:

Class	Description
Class I	All energy minerals including Oil and Gas
Class II	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 available for individuals and companies to prospect, explore and mine. .i.e. all metallic minerals as well as semiprecious stones, gems, marbles, granites and other decorative stones

Under the Mining Code, the state may delegate its rights to individuals or companies, regardless of their nationality, by licensing three different types of mineral rights:

Prospecting Permit: grant the right to carry out work aimed at searching for one or more mineral deposits in a given area, for up to three years (no drilling allowed). Work allowed includes: 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 have a duration of up to four years.
Mining Lease: or concessions to exploit- grant rights for exploitation of a mineral deposit and are generally issued for the period necessary to fully exploit the deposit. This mineral title may be rented or mortgaged.

The National Directorate of Mining and Geology 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, a Unit of the Ministry of Housing, Territorial Planning and Environment.

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.

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.