A uniform contractual system for the exploitation of mines is introduced in Colombia by means of the New Code of Mines (Law 685 of August 15, 2001).
Under Colombian law subsoil and non-renewable natural resources are owned by the State, with the exception of private property titles formalized before 1969. As a result of the above, the State grants mining titles comprising the right of exploration and/or exploitation of a mine to private parties and government entities.
Under the former Code of Mines (Decree 2655 of 1988) there were several types of mining titles, all granted by the Ministry of Mines and Energy (except for private property titles formalized before 1969).
These types included exploration licenses, exploitation licenses, concession contracts for the exploration and exploitation of a mine and mining contributions. The latter were given to government entities which in turn could contract with private parties the exploration and exploitation of the mines located within the contribution.
The new Code of Mines, enacted by means of Law 685 of August 15, 2001, modifies the system of mining titles described above. Under this new code there is only one type of mining title called Mining Concession Contract (although the titles mentioned above which had been granted before the enactment of Law 685 remain valid).
Therefore, the granting of mining exploration and exploitation rights after the enactment of the new Code of Mines shall be done by means of a concession contract with the Ministry of Mines and Energy (the "Mining Authority") or with the government entity to whom the Ministry delegates its powers in this regard.
Finally, the regulation of this concession contract in the new code introduces a series of provisions aimed at facilitating mining contracting in Colombia.
Some of the those provisions, as regulated in the new Code of Mines, are:
(i) Subcontracts do not require the approval of the Mining Authority.
(ii) The maximum term of concession contract is of 30 years extendable for another 30. After the this extension the contractor will have preference to enter into a new concession contract in respect of the same area.
(iii) Adjacent mining areas or parts thereof corresponding to several mining titles held by one or more beneficiaries can be included in a single exploration and exploitation program.
The above, in order to develop in said areas mining activities simultaneously or alternatively, with unified production goals and objectives, integrating the areas into a single concession contract.
(iv) A single program of integrated use of infrastructure for construction, assembly and exploitation in areas subject to concession contracts and private property areas, may be agreed upon by the interested parties (e.g. the beneficiary of the concession and the holder of the private area), subject to approval from the Mining Authority.
This report was prepared and is copyrighted in 2001 by PARRA, RODRÍGUEZ & CAVELIER, a law firm with offices in Bogotá, Colombia. The general information herein contained does not constitute legal advice. Transcriptions and quotes are permitted citing the source.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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