In Official Gazette No. 893 (Wednesday, November 30, 2016) the Ministry of Mining issued Ministerial Agreement No. 2016-339 concerning "Instruction for the authorization of transfer and assignment of mining rights and assignment made as security or collateral assignment of mining rights."
Important aspects of the new instruction include:
- differentiation between the authorization of transfer and assignment of mining rights and assignment made as security or collateral assignment of these rights
- obtainment of prior authorization from the State for the transfer to secure the guarantee
- assignment under guarantee can be made through the execution of a contract which explicitly requires that the assignee accept existing obligations in order to guarantee fulfilment of those obligations, and which requires the assignee to notify the parties about any legal impairment to the concession that is under guarantee.
In the event that the assignee so requires, it may enter an agreement called a Direct Contract with the Ministry of Mining (through the Sub secretariat of Industrial Mining). Said agreement is intended to provide certainty to the assignee that it will be notified in the same time periods as the transferor, in the event that an administrative procedure for termination of mining rights is initiated as a result of a breach of the Mining Exploitation Contract or a breach stipulated in the Mining Law). If the Direct Contract contains clauses stipulating alternative methods of conflict resolution abroad, the clauses must be endorsed by the Attorney General's Office before the contract is executed.
By means of a resolution, the Sectoral Ministry will authorize or deny the application for an assignment in guarantee (submitted by the holder of mining rights that intends to apply for the assignment in guarantee). If the Ministry authorizes the application, the assignment in guarantee will be executed. The executed assignment in guarantee will be submitted to a public deed, to which the resolution of authorization, or a certificate that it was not issued (with the understanding that it is approved), be attached as an enabling document.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.