On November 11th, Statute 20.551 was published in the Chilean Official Gazette, which regulates the closure of mining facilities. The Statute aims to repeal the regulations that exist in the Code of Mining Safety (Reglamento de Seguridad Minera).
A system was implemented which demands mining companies to have an approved plan by Sernageomin (a governmental agency that ensures mining and environmental safety), for the closure of mines prior to the implementation of a mining operation. This plan has to be planned and implemented progressively throughout the duration of the mining operation.
Furthermore, the mining companies must issue guarantees to the State in order to assure the fulfillment of the plan of closure. In order for the company to be refunded of said guarantees, it is necessary for the mining company to obtain a certificate issued by Sernageomin stating that it has fully complied with the plan. Nevertheless, part of the guarantees will be returned to its owners upon the fulfillment of these requirements.
Two types of procedure exist for the plan of closure to be approved. One is the procedure of general application, which shall apply to mineral deposits whose extraction capacity is superior to 10,000 tons per month. The simplified procedure shall apply to mining operations whose capacity is less than the above mentioned amount and mining explorations that enter the environmental impact assessment system.
The general procedure requires, among other requirements, that the plan of closure is accompanied by a technical report issued by a person competent in Recursos y Reservas Mineras (mining resources and reserves) in accordance with statute 20.235. The technical report shall incorporate information about national monuments and archaeological sites, a financial assessment of the closure and the post-closure costs, the amount of guarantees and which instruments shall be used as collateral and a plan to inform the local community. Among others, deposits, bank guarantee ballots, letter of credit stand-by, and even the assignment of contract of sale of minerals with Enami, may be handed in as collateral.
Once the plan for closure has been approved by Sernageomin, it will have to be audited by external auditors. Regular audits will take place every five years and extraordinary ones will take place when serious situations arise which warrant one. The audits are intended to verify that mining companies are in compliance with the plan of...