The Mining Law Reform Eliminating the Direct Access of State-owned Companies to Mining Concessions is in Force

On July 28, 2020, the approved text of the Mining Law Reform was published in the Supplement to the Official Gazette Nº 255, and consequently entered into force.

The text of the Mining Law Reform has only 2 articles, which eliminate the possibility for State-owned companies or their subsidiaries of having a direct application right in order to be granted with a mining concession without going through an auction or bidding process.

The repealed subparagraph of article 29 of the Mining Law is:

The granting of mining licences is exempt from the processes of auction or public auction mentioned in the previous paragraph, which, according to Article 31 of this Law, the State may implement through the Sectorial Ministry relating to areas under its control, by assigning licences to foreign state-owned companies or their subsidiaries, to private and publicly owned companies, or to consortiums in which private and publicly owned companies are majority shareholders. The State must maintain transparency throughout the adjudication process, and apply the constitutional laws and criteria previously established by law, the regulations contained therein, and any agreements preceding the granting of the licences.

Whilst, the repealed subparagraph of article 40 of the Mining Law is:

Contracts for the supply of services between the State, with the Sector Ministry as its intermediary, and foreign state-owned companies, or consortiums in which foreign state-owned companies have a majority shareholding, may be prepared directly, on the basis of previous agreements signed between the parties.

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Disclaimer: This document is informative and does not, and is not intended to, constitute legal advice.