The political back and forth of the discussion of the Ley Bases, which was on its way to being approved in the House of Representatives last night, had as protagonists the large mining investors of San Juan. The operating companies and also the suppliers and industrialists supported the proposal on several occasions because they assure that it is key for the start of new exploitations. But the central chapter, the Regime of Incentive to Large Investments (RIGI), still has several points pending for it to be effectively implemented. This article, which gives tax benefits to strategic operations, still presents doubts for the sector, because it is not clear how it will be put into practice and who will be able to use it.
Ricardo Martínez, president of the San Juan Mining Chamber, said that the approval of the RIGI, although it is a long-awaited piece of news, “does not mean that we will see a new project tomorrow.” On the other hand, it will start moving a sector that, in San Juan, has gone more than 10 years without starting a new exploitation. Although other sectors at a national level have already made announcements in this regard, such as oil and gas, in the mining sector no concrete names have yet been heard. The fact is that, in principle, there are still several legal steps to be taken for the regime (if approved) to work and then there are the processes that companies must face to use it.
In terms of regulations, once the law has been approved, the Executive must put it into effect. This also includes the regulation of the law, which will require shaping not only the RIGI, but also the rest of the chapters of the Ley Bases. As for the regime itself, an enforcement authority must be formed. This will be in charge, for example, of defining which projects can or cannot access the benefits. This is not an automatic instrument, but rather those investments over 200 million dollars that can apply will be selected. There is also a step in the provinces, which must adhere or not to the new norm.
After the institutional process has been finalized, the time will come for companies to apply or not. Some firms have already begun consultations, even before the details of the regulations are known. This will be done through the legal teams. In San Juan there are several clear candidates for RIGI, including the Los Azules copper project. Rodolfo Ovalles, Manager of Legal and Institutional Affairs of the company, explained to DIARIO DE CUYO some of the points that are still waiting.
One of the steps that a company must complete, in addition to obtaining the OK from the implementing authority, is to form a VPU (Single Project Vehicle). This is, “a company, branch or temporary union that must have as its sole and exclusive objective the carrying out of one or more phases of an investment project approved by the RIGI,” said the professional. This also opens the door to projects in the exploration phase, although it is expected that the first interested parties will be those who must begin construction and operations. Once the companies form this vehicle, the authority will decide. They must also have the environmental approval for the phase they want to develop. They must also develop an investment plan, which will be what they will analyze to determine whether or not they can obtain the benefits, which will be for 30 years.
One of the doubts that still remain are the steps to follow to be able to form the VPU and then also to obtain or not be approved. The detail, they hope, will appear when the rule comes into force. There is also another question and that is how complex the process will be, since the deadline sets a deadline for those who can do it. In principle, the regime will last for two years and then the Executive can extend it for another year. Those who do not obtain approval within this time will not be able to ensure the conditions set out in the regulations.
