Ministerio de Energía y Minas

Mining Obligations

Minimum Production and Penalty

Remember that the mining concession requires the holder to exploit the mining resources located in the concession area. As a result, you are obligated to invest money and labor until you reach the minimum production of minerals required by the General Mining Law.
This obligation of minimum production also exists in the case of having entered into an exploitation contract or agreement.

HOW MUCH AM I OBLIGED TO PRODUCE?

If you are an accredited small mining producer
No less than US$ 50.00 (or its equivalent in national currency), per year and per hectare granted, whatever the substance may be.
For example: If the number of hectares included in your concession is 1000, then you will have to produce at least the equivalent of US$ 50 x 1000 Hectares = US $50,000 per year.

If you are an accredited artisanal mining producer
No less than US$ 25.00 (or its equivalent in national currency), per year and per hectare granted, whatever the substance may be.
For example: If the number of hectares included in your concession is 8, then you will have to produce at least the equivalent of US$ 25 x 8 Hectares = US $200 per year.

The certificate of PPM or PMA gives you an interesting advantage. Without such certificate, the minimum amount of production, per year and per hectare granted, would be much higher: US$ 100.00 (or its equivalent in national currency), if it is metallic substances; or US$ 50.00 (or its equivalent in national currency), if it is non-metallic substances.

WHEN SHOULD I GET THE MINIMUM PRODUCTION?

The minimum production required by the Mining Law must be obtained no later than the expiration of the sixth year, computed since you obtained the mining concession title or since you signed the exploitation contract.
Example
If your mining concession title was granted in 2009, then you must obtain your minimum production no later than 2015, which is the sixth year since your concession title was granted.

HOW DO I DECLARE WHAT I HAVE PRODUCED?

The minimum production shall be declared annually on the DAC form.

WHAT HAPPENS IF I DO NOT COMPLY WITH PROVING THE MINIMUM PRODUCTION?

If you fail to prove the minimum production, you will have to pay a penalty. This penalty must be paid in the first semester of the seventh year, computed since you obtained the mining concession title or since you signed the exploitation contract.
Example
Returning to our previous example, if your mining concession title was granted in 2009 and you did not comply with proving your minimum production in 2015, then the penalty must be paid in 2016, between the months of January and June of such year.

HOW MUCH SHOULD I PAY FOR PENALTY?

If you are qualified as PPM or PMA by the DGM of the Ministry of Energy and Mines:
US$ 1.00 or its equivalent in national currency per year and per hectare, until the year you comply with the minimum annual production.

If you are an Artisanal Mining Producer accredited by the DGM of the Ministry of Energy and Mines:
US$ 0.50 or its equivalent in national currency per year and per hectare, until the year you comply with the minimum annual production.

If you are not accredited or if you belong to the General Regime of the Medium and Large Mining,
you must pay a penalty of US$ 6.00, per year and per hectare, until the year you comply with the minimum annual production.

WHERE DO I PAY THE PENALTY?

The penalty payment must be paid to the bank account established by INGEMMET for this purpose. In case you are required to pay the right of validity, the penalty must be paid together with the payment of such right.

WHAT HAPPENS IF I DO NOT PAY THE PENALTY?

If you fail to pay the penalty of 1 year, such payment may be regularized during the current year.
However, if you fail to pay the penalty for two consecutive years, this will result in the expiration of your petition or mining concession.
In other words: you lose your mining right.

WHERE DO I GET MORE INFORMATION?

More information is available on the INGEMMET website or by calling ALO INGEMMET at 618-9820.