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12 November 2018
In Chile, the state owns all unextracted minerals notwithstanding the property rights of surface landowners. This legal regime is recognised at the constitutional level. The relationship between surface landowners and the owners of unextracted minerals (ie, the state) is regulated by law, which establishes a separate and independent regime for each party. The surface landowner cannot claim:
For other rights that surface landowners claim over unextracted minerals they must obtain a mining concession in a competitive procedure on a first-come, first-served basis just like any other applicant.
Although the state owns unextracted minerals, it is not generally authorised to perform the necessary work to search, exploit or extract minerals from such property, unless there is an express authorisation by law granted for each project. Exploration and exploitation activities are generally reserved for private (national or foreign) holders of rights to explore or exploit mining concessions, legally obtained through the relevant procedures.
Given this dual regime, there are inevitably conflicts between surface landowners and mining concession holders. The latter must exercise their rights in the same area in which the surface land is located, as they will need to access the landowners' property. In the case of exploration concessions, holders will be entitled to exercise their rights without being certain that minerals exist on the land in question.
Chilean legislation, as a matter of policy, has regulated this situation in favour of the performance and development of mining activities. Thus, the Constitution imposes a burden on surface landowners, stating that they are "subject to the obligations and limitations established by law to facilitate the exploration, exploitation and processing of said mines".
In order to understand the relationship between the landowners and holders of mining concessions, the focus should be on the rights granted by law mining concession holders and whether the concessions allow exploration or exploitation.
The first of these rights is the right 'to look and search for minerals', which is understood to mean the right to allow a party to examine above ground and underground and search and prospect for mineral substances. The exercise of this right by mining concession holders depends on whether:
If a landowner refuses to grant written permission, the prospector may apply to the court for permission to exercise their mining concession. In addition to establishing certain parameters for prospection works, the court will determine the size of the guarantee that the applicant must pay to cover any damages that may be caused. However, in the case of houses or land planted with vines or fruit trees, only the owner may grant an exploration permit (at their absolute discretion).
Mining concession holders have the right to impose easements on landowners where mining work will be carried out and must compensate landowners for any damage caused during such activity.
Given that the right to impose mining easements is legally recognised, if a landowner does not voluntarily negotiate with a mining concession holder, they will be unable to oppose the imposition of easements and can raise only the issue of how much compensation they should receive, provided that the applicant for the mining easement satisfies all of the legal requirements to impose such easements. Without such an agreement, the court will grant the easement and determine its terms and conditions and how much compensation should be paid.
Mining concession holders can apply the following easements:
In addition to the current legal regulations on easements, the Ministry of National Property has issued administrative instructions concerning the establishment of easements on state property. The existing regulations are contained in Ministerial Order 1/2016 which govern among other things:
The relationship between the landowners and mining concession holders in Chile is governed by law, which grants preferential rights to the latter. Mining concession holders may exercise their rights to search for minerals and impose mining easements on landowners. However, in the case of state property, such matters are regulated by a ministerial order.
For further information on this topic please contact Santiago Montt Vicuña at Montt y Cia SA by telephone (+56 22 233 8266) or email (email@example.com). The Montt y Cia SA website can be accessed at www.monttcia.cl.
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Santiago Montt Vicuña