Overview of process for grant of a mining concession in Peru
A mining concession granted in Peru allows its holder to carry out exploration and exploitation activities within its area, provided that prior to the beginning of any mining activity, such concession title is granted by the Mining and Metallurgic Geology Institute of Peru (INGEMMET) and other applicable administrative authorizations are obtained (e.g. environmental, use of water, use of explosives, etc.).
The application for a mining concession (called a pediment) involves the following:
- an Official Form for mining pediments has to be filled-in with information regarding the requested area and the petitioner; and filed before INGEMMET;
- the petitioner has to pay: (i) an administrative fee equivalent to 10% of a Peruvian Tax Unit. Considering current exchange rates, this fee amounts today to approximately US$128; and, (ii) the validity fee corresponding to the year in which the pediment is filed (i.e. US$3 per hectare); and
- the filing of an affidavit regarding its social responsibility commitment with the population located in the areas surrounding the pediment.
After the pediment is filed, it will be evaluated by the technical and legal areas of INGEMMET (this, in practice, takes between 3 and 4 weeks). If the evaluations are favourable, the petitioner will receive from INGEMMET standard form documents (regarding the pediments’ existence and the area covered by it) that must be published in the official gazette and in a newspaper of the area in which the pediment is located (making these publications involve expenses of around US$300).
The petitioner has 30 business days to make these publications and then 60 days to provide INGEMMET evidence of same. Within the next 30 business days, INGEMMET will issue additional technical and legal reports. If these reports confirm the technical and legal viability of the pediment, the concession title should be granted.
In general, the proceeding for the issuance of mining concession title, takes no less than 4 months. This term could be longer if technical or legal objections are raised during the proceeding (e.g. overlapping with other properties or with protected areas, etc.). Once the title is granted, its holder must wait for another month to obtain an official document stating that no objections were filed against such title. Once this document is obtained, the concession holder can apply for its recording in the Peruvian Public Registry (which will provide full enforceability to the concession). This recording takes around 5-10 days to be completed and involves expenses of US$185.