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Argentina: Lithium is declared a strategic resource in the Province of La Rioja and mining rights are suspended

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In brief

On 17 January 2023, the governor of the Province of La Rioja enacted Law No. 10,608 (“Law“), declaring the study, research, prospecting, exploration, exploitation and industrialization of lithium and its derivatives to be of public interest.

The Law undertook the following measures: (i) suspended existing mining permits and concessions related to this resource for 120 days with a possible extension for the same period, with the plan to determine areas of interest (“Areas of Interest“); (ii) established the participation of the provincial company (EMSE) in all lithium-related projects; and (iii) established a preference right for provincial state-owned companies in the application for mining rights.
 

In focus

  • All permits for the prospecting, exploration and mining concessions related to lithium have been suspended for a period of 120 days throughout the province, and the Provincial Executive Power (PEP) reserves the right to extend this suspension once for the same period of time. 
  • The PEP will determine Areas of Interest for research, prospecting, exploration and exploitation activities in the provincial territory.
  • In those Areas of Interest, any permits granted by the mining authority will be terminated and all mining activities shall be carried out with the participation of the provincial state company EMSE (Energía y Minerales Sociedad del Estado) either by itself or through agreements with third parties. 
  • The PEP will be in charge of taking the administrative measures for the use of lithium that best suits the development of the sustainability model of the province. 
  • Provincial-owned companies will have a preference and/or priority when applying for any other mining rights over the Areas of Interest determined by the PEP.

The declaration of termination of mining rights in the Areas of Interest may affect the acquired rights of the permits’ holders. In addition, the Law does not include details on how the provincial company’s participation in the projects will be implemented, nor on the preference of the provincial company to apply for mining rights in the Areas of Interest.

You can access the Spanish version here.

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Author

Adolfo has been a member of the Management Committee of Baker McKenzie’s Buenos Aires office since 2013 and the managing partner of that office since 2021. He has extensive experience working on corporate and commercial transactions for companies in the oil & gas, mining and natural resources industries. Adolfo has authored several reviews for various publications — including Sweet & Maxwell — usually involving Argentinean investments and mining.

Author

Ezequiel Artola is a partner in the Energy, Mining and Infrastructure Practice Group in Buenos Aires. He advises clients on a variety of complex transactional, general commercial and regulatory matters, with emphasis on mergers and acquisitions, joint ventures, commercial agreements and corporate practice. Ezequiel was assistant professor of commercial and civil contracts at the Universidad de Buenos Aires, and has written articles related to mining, oil and gas, and distribution and agency agreements.

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Delfina Ferrario is an Associate in Baker McKenzie, Buenos Aires office.

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