Federal Mining Secretariat launches the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"
On 08/07/23, Resolution 96/2023 (the "Resolution") was published in the Official Gazette, by which the FMS sets -within its authority- the "Federal Program for the Systematic Disclosure of Mining Activities (ProNDSAM)"..
ProNDSAM has five objectives:
1. Prioritize the systematic dissemination processes of mining information.
2. Regulate the operation of the Argentine Mining Information System Open to the Community ("SIACAM"), while ensuring its continuous operation.
3. Promote compliance with international standards for the dissemination of information on the mining sector.
4. Standardize the monthly and weekly publication of reports and the updating of the project portfolio, containing information on exports, employment, international prices, and the development of mining projects.
5. Establish the methodology for the handling and disclosing of information on employment, international trade, and the evolution of mining projects.
According to the Resolution, Section 3, the Transparency and Mining Information Directorate will be in charge of:
(a) Ensuring the continuous updating of SIACAM indicators, reports and open data;
(b) Publishing monthly reports on mining exports, the trade balance of the main mining projects and the provincial origin of mining exports, in accordance with the methodology set out in Annex I to the Resolution;
(c) Publishing monthly reports on mining employment and employment by province in SIACAM, applying the methodology applying the methodology set out in Annex II to the Resolution;
(d) Publishing monthly reports on international prices of the most relevant minerals in SIACAM;
(e) Publishing special reports in SIACAM that deepen the analysis of specific aspects of the mining sector;
f) Publishing the portfolio of mining projects in Argentina produced by the National Directorate for the Promotion and Mining Economy, applying the methodology for determining the state of evolution of mining projects approved by the Federal Mining Council (COFEMIN), applying the methodology of Annex III of the Resolution; and
g) All those functions entrusted to it by the FMS.
Likewise, the Resolution empowers the Transparency and Mining Information Directorate to issue the complementary regulations that are necessary to carry out the corresponding actions for the implementation, execution and control of ProNDSAM.
The Resolution indicates that the expenditure demanded by the measure will be met according to the budgetary availability, for the Fiscal Year 2023, under Program 32 – "Formulation and Execution of the Geological-Mining Policy".
Background information
The Resolution is the result of several measures taken by the FMS in terms of transparency. Particularly, the Resolution contemplates:
(a) Decree 50/2019: established the goals of the FMS, among which is observed to assist the Ministry of Economy in "... the design and implementation of mining policies, in terms of interaction with investors and companies in the sector, and in all actions aimed at promoting the development of mining in the country".
(b) Resolution 47/2020: established the strategic objectives for the "Argentine Mining Development Strategic Plan" for the next 30 years. Among those, it is noted to favor the access to information related to the activity and the National Mining Policy, guaranteeing the transparent management of the sector.
(c) EITI Initiative: Argentina has been part of the EITI since 2019. According to the 2022 Progress Report, issued in April 2023, Argentina received a score of 73/100. Within the EITI Argentina portal, the objective of facilitating access to information and transparency of the extractive sector is observed.
(d) Resolution 89/2022: created SIACAM, which must periodically report on the economic, geological, geographic, social, health and environmental aspects of the mining activity.
(e) Administrative Decision No. 449/2023: delegated to Transparency and Mining Information Directorate the responsibility of assisting the Undersecretariat of Mining Development in the creation, consolidation and administration of the Single National Mining Information System, the Mining Transparency System and the Mining Communication System, referring to environmental, economic, social, legal aspects, geological, cadastral mining projects and their territorial environments.
Prior to the Resolution, the FMS provided reports and studies on mining, without establishing the methodology used for such publications. Previously, the FMS, through its website, published:
(i) Weekly reports: they monitor the latest developments in Argentine mining projects and the evolution of international prices of the main commodities linked to the sector.
(ii) Monthly reports: reports on international prices, mining exports, and other topics.
(iii) Archive of studies: repository of documents made between 2016 - 2018.
(iv) Mining Development Studies Series: reports focused on mining sector research from various angles. The objective of these is to contribute information and perspectives to the debates around mining in Argentina and the world.
(v) Series of studies on mining markets: documents that provide specific analyses linked to the different minerals of interest and the geological potential of Argentina.
(vi) Bilateral mineral trade reports: reports focused on the investigation of mineral trade between Argentina and different countries.
(vii) Catalogues of mining projects: portfolios aimed at investors. They collect information on the projects with the greatest export potential.
(viii) Series of statistical studies: documents and reports on different variables.
(ix) Gender indicators: Reports and studies on indicators on gender equity and existing gaps in the mining sector.
For more information or inquiries on these topics, please contact Marcos Moreno Hueyo and/or Dolores Reyes.
Lithium export reimbursement has been finalized
On January 16, 2023, Resolution No. 15/2023 (the "Resolution") was published in the Official Gazette whereby the Federal Ministry of Economy (the "Ministry") proceeded to waive the export reimbursement of the goods classified as lithium, hydroxide and lithium oxide, lithium chloride, and lithium carbonate.
The Resolution orders the secretaries of the Ministry to design the required administrative measure to waive the export reimbursement. Specifically, the Resolution impacts the following tariff positions: 19.90; 2825.20.10; 2825.20.20; 2827.39.60, and 2836.91.00 of the Mercosur Customs Tariff Code (N.C.M).
The Resolution will become effective on January 16, 2023.
Background information
As a reason for the issuance of the Resolution, the Ministry established that the lithium sector has registered exponential growth, both in terms of mineral prices -driven by a great global demand- and in the progress of the numerous projects that are located in the country.
Consequently, it considered that "taking into account the electro-mobility that caused a change in the market and that the international scenario had an abrupt growth in the demand for lithium that produced an exponential increase in the price and also in the profitability of the projects, it is understood that a stimulus such as the reimbursement has fulfilled the objectives for which it was opportunely established".
Before the enactment of the Resolution, the sector's companies received export refunds from the Federal Government ranging from 2.5% to 5% of sales. Meanwhile, the export duty of 4.5% for lithium compounds is maintained.
Data from the Federal Mining Secretariat ("FMS") regarding lithium
According to the FMS, Argentina has a lithium mining investment potential of approximately US$ 6,473 million. From 2020 to the second quarter of 2022, capital investment announcements for an approximate amount of USD 4,579 million have been registered. Current production is approximately 33,000 tons per year.
Regarding lithium export data, the latest Monthly Report (December 2022) of the FMS, states that "in the first 11 months of 2022 lithium sales abroad reached USD 620 million, growing 235% year-on-year and representing 18% of total mining exports. This export figure in historical terms represents this year's number one position for the first 11 months of a year, being 139% above the accumulated of the first 11 months of 2018 (the second historical year with the highest exported amounts). As for the quantities exported of lithium, in the accumulated so far this year they exhibited a growth of 4.5%."
For further information or questions on these issues, please contact Marcos Moreno Hueyo and/or Dolores Reyes.
Creation of the Federal Registry of Mining Suppliers and the Federal Committee of Mining Suppliers
Resolution 84/2022, published on 11/28/22 in the Official Gazette, creates the Federal Registry of Mining Suppliers, with a public status within the Secretariat, and the Federal Mining Suppliers Committee, in order to promote the development and growth of the mining activity, in view of the need to establish tools aimed at benefiting suppliers of mining supplies and services (the "Resolution").
I. The Federal Registry of Mining Suppliers (the "Registry")
Benefits of the Registry
The FSM expects that the implementation of the Registry will accelerate the contracting process of suppliers, promote the increase of human capital, and encourage work, making possible the continuous development of the sector and productive diversification.
Through the Registry, mining companies operating or with the prospect of investing in the country will have an instrument that will make it possible to make visible the suppliers of goods, supplies, and services of the Argentine provinces.
Who can register?
In the Registry the eligible parties will be able to register:
- persons domiciled in Argentina, and
- legal entities incorporated in Argentina that, due to their activity, or corporate purpose, offer goods, inputs, or services, including those of technological innovation and knowledge economy, to companies that carry out mining activities, and/or to any company that carries out activities associated to the Mining Value Chain.
In order to register, the interested party must:
- Complete the form -related to the data of the interested party- set forth in Annex I of the Resolution:
- Name & Identification: Name or Company Name, CUIT N° /Document.
- Contact data: Address / Telephone / E-mail / Focal point data.
- Business line: services and products offered
- Chamber you are a member of
- Optionally, the tariff position of the products.
- Submit the following information:
- Proof of registration with AFIP
- List of the personnel payroll
- Proof of registration in the local chamber of suppliers.
Enforcement Authority
The Resolution establishes that it is the National Directorate of Mining Value Chain and Infrastructure (the "National Directorate") under the Undersecretariat of Mining Policy. The National Directorate will have the following functions:
- Registration of suppliers of goods, inputs, or services, including those of technological innovation and knowledge economy, of the mining activity.
- Creation of files with the background of each of the registered suppliers.
- Periodic updating of the background of the registered suppliers' files.
- Preparation of statistics based on the data collected.
- Promotion and granting of benefits to registered suppliers.
Likewise, the National Directorate shall be empowered to issue the complementary and clarifying rules that may be necessary for the implementation of the Federal Registry of Mining Suppliers. Meanwhile, the Undersecretariat of Mining Policy is empowered to sign agreements with provincial authorities and the heads of national and provincial chambers related to the mining activity, for the exchange of experiences, data, and information. It is also empowered to summon all those public and private actors it deems necessary and convenient due to the nature of the technical issues to be dealt with in the Federal Mining Suppliers Committee.
II. The Federal Mining Suppliers Committee
Furthermore, the Resolution creates the Federal Bureau of Mining Suppliers. It will be attended by those registered in the Registry, representatives of the Secretariat, national and provincial agencies, and national and provincial Chambers related to the mining activity. The purpose of the Federal Mining Suppliers Committee is to establish a permanent, participative, broad, and federal space for dialogue and exchange among different actors in the mining activity. The meetings of the Board will be held four (4) times a year.
III. Legal Background
The Resolution has as precursor Resolution No. 47/2020, which approved 18 Management Programs 2020/2023 formulated on the basis of the strategic objectives of the "Strategic Plan for the Argentine Mining Development", among which are: Spontaneous Assistance to Producers and Small and Medium Mining Companies (SMEs); and Strengthening of the Mining Value Chain.
The Strategic Plan for the Argentine Mining Development is aimed at building a Shared Vision for mining in the next 30 years, with the aim of consolidating the mining activity as part of the federal productive development based on the criteria of rational, sustainable, and inclusive use of natural resources.
For further information or questions on these issues, please contact: Marcos Moreno Hueyo and/or Dolores Reyes.
New Resolutions of the Federal Mining Secretariat
The following is a summary of the recent resolutions issued by the Federal Mining Secretariat ("FMS"):
FMS Resolution 50/2022 - Deadline extensions
Resolution No. 50/2022 of the FMS, published in the Official Gazette on 10/31/2022, extends for 180 days the deadline set for the rendering of the funds received by the Provinces, in connection with the Projects set up under the "Plan Nacional de Minería Social", under the "Plan Nacional de Huellas Mineras" and the scope of other social programs or initiatives of different fiscal years.
The Resolution reaches the Provinces that have funds which have not been allocated to each project submitted within due deadlines. The Resolution authorizes the Provinces to: (i) return those funds; or, (ii) declare their intention to reallocate those funds to a new project that is compatible with the guidelines of the regulations in force.
FMS Resolution 53/2022 - Launch of the Federal Project
Resolution No. 53/2022, published in the Official Gazette on 10/31/2022, establishes the Federal Project on Strengthening Capacities for the monitoring of environmental variables in Mining (the "Federal Project").
The Federal Project’s objectives are: (a) to cooperate and assist all the provinces of Argentina in the assessment and environmental control of mining projects; (b) to promote training actions aimed at strengthening the agents in charge of carrying out such control; (c) to promote inter-institutional agreements aimed at fostering cooperation in infrastructure, knowledge, and control and diagnostic tools; (d) encourage greater participation of communities, academic entities and other interested parties in the planning and execution of mining environmental monitoring actions; (e) generate a framework for greater disclosure of the results of mining environmental monitoring, through instruments that guarantee greater transparency in the sector; and (f) contribute to financial assistance mechanisms for the incorporation of the necessary infrastructure to establish better control.
For further information, please contact either Dolores Reyes, Marcos Moreno Hueyo, or Nicolás Eliaschev.