Regulatory roundup: reserve zones, formalization, permitting and bans

Colombia’s reserve zones decree

The local mining sector is on edge after Colombia’s environment minister Susana Muhamad confirmed that a decree creating temporary reserve zones will not be lifted, as she prepares to issue resolutions to delimit the areas.

Mining operations would be prohibited in these natural reserves, creating a risk for the industry, said the president of mining association ACM, Juan Camilo Nariño, who said small, medium-sized and large companies would be affected.

Peru’s formalization challenge 

Peru's new energy and mines minister, Jorge Montero Cornejo, is expected to advance with formalizing small mining operations without leaving large miners in the dust.

Montero succeeds Rómulo Mucho, who was removed week over his handling of the law to formalize artisanal and small miners (MAPE) and an extension of the comprehensive mining formalization (Reinfo).

“The challenge is to get the government to support [Montero] in improving the MAPE law, promoting it and supervising the latest expansion of the comprehensive mining formalization registry,” former energy and mines minister Miguel Incháustegui told BNamericas.

Many illegal miners operate under Reinfo, which was initially designed to regulate small-scale miners. Of the 84,440 informal miners registered since Reinfo was created in 2017, only 19,753 are undergoing effective processes of formalization, according to Reinfo's database.

Rolling back mining ban

Costa Rican President Rodrigo Chaves announced that his administration is seeking to legalize open-pit mining by reversing a ban enacted 14 years ago in a country renowned globally for its environmental conservation and ecotourism.

“We're sitting on a gold mine,” the president said during a Wednesday press conference in San José, where the government revealed it had submitted bill 24,777 to the national assembly to lift the ban and start operations at a gold mine in the north of the country.

The gold deposit in question is located in Crucitas, approximately 200km north of San José, near the border with Nicaragua.

The proposed legislation is aimed at amending the mining code, granting an exception solely for this deposit, which could be auctioned off to one or more bidders, with a minimum royalty of 5% going to the State.

Regulatory concerns

Ecuador's mining sector is concerned about legal and regulatory stability, including taxation, and consultation laws, but encouraging examples regarding the latter issue suggest that 2025 could bring positive changes.

A bill to abolish the VAT refund for the mining sector is currently debated in parliament.

Moreover, community participation is another sticking point, and laws on prior and environmental consultations are urgently needed to improve clarity and certainty, according to the participants of a panel at the ENAEP 2024 Mining Meeting hosted by Seminarium Corporation in Quito.

Permitting system reform

Two bills presented by the Chilean government seek to resolve permitting issues in the country. One promises to reduce processing time for sectoral permits by up to 70%. It was approved in the lower house in October and is currently subject to a second constitutional procedure in the senate.

The other bill, known as environmental assessment 2.0, seeks to reform law 19,300 and modernize the environmental assessment mechanisms of regulator SEA.

Nicole Porcile, former VP of corporate affairs and sustainability at companies such as Codelco, Antofagasta Minerals and Andes Iron, deems this bill insufficient to boost mining investments.

“The bill would accentuate these problems, as it proposes changes such as citizen participation open to people beyond those directly affected, which extends to the entire process. This would increase the timeframes and investment uncertainty,” she told BNamericas.

Will El Salvador's mining ban be overturned?

El Salvador’s President Nayib Bukele criticized the country’s complete ban on mining, calling it “absurd” and arguing that the activity could be leveraged for economic and social development.

“We are the ONLY country in the world with a total ban on metal mining, something no other nation applies. Absurd! This wealth, given by God, can be responsibly utilized to bring unprecedented economic and social development to our people,” Bukele stated on social media platform X.

Both open-pit and underground metal mining has been banned in El Salvador since March 2017, following the legislative assembly’s approval of the metal mining prohibition law.