ENAMI Trade Agreement Regulations

July 27th, 2023

The “Regulation for the procedure for the conclusion of commercial agreements of the national mining company ENAMI EP” (hereinafter the “Regulation“) was published in the Official Register on July 24, 2023. The following are the main elements of this regulation:

  1. The Regulation applies to any type of business model aimed at developing mining projects in concessions owned by ENAMI for all mining regimes (small, medium, or large scale).
  2. The purpose of the commercial agreements proposed by the Regulation is the development of mining projects and the subsequent assignment and transfer of rights over a mining concession in exchange for a part of the shareholding package or the purchase of the rights thereof.
  3. The conclusion of a commercial agreement may be initiated by: (i) external initiative or (ii) internal initiative.
  4. In the case of the external initiative, it can be submitted by any public or private legal person who will have a right of first refusal. External initiatives must meet the following main requirements:

a. Experience in mining projects.

b. Objective  of the project to be developed.

c. Geographical location of the area of interest: maximum 40 000 mining hectares.

d. Proposed  initial amount for investment.

5. The external initiative will be qualified by ENAMI, which will call for a public tender for the best economic position that will be determined based on technical aspects and the best economic offer. The first bidder shall be entitled to match the best offer (right of first refusal).

6. For the presentation of the economic offer, a guarantee, or a bond for at least 1% of the total investment offered for the entire development of the project must be provided. If the agreement is not signed by decision of the offeror, the guarantee will be executed in favor of ENAMI.

7. The risks associated with the projects shall be borne by the offeror.

8. The Regulation establishes in general terms the content of the commercial agreements; among the most important the following: (i) obligations of the parties; (ii) expenses for the execution of activities; (iii) procedure for transfer of rights; (iv) asset valuation procedure; (v) minimum investment amount; (vi) grounds for termination and unilateral termination; (vii) technical, economic, environmental, social obligations; (viii) environmental permits; (ix) formula for determining the price for the assignment and transfer of the concession, either with payments in kind, shares and the value for operating profit.

9. Commercial agreements shall establish a fee for administrative services in favor of ENAMI which shall not be less than the patents for the preservation of the concession. This fee will be charged annually for each mining hectare and will be reviewed no later than the fifth year of the agreement.

10. Commercial agreements shall be filed in the mining register and the commercial register.

11. The term of the commercial agreements on newly granted concessions shall begin from the declaration of commencement of initial exploration.

12, For the transfer and assignment, the following requirements must be met: (i) a prior economic valuation of the project; (ii) the concession must be in advanced exploration; and (iii) that monetary compensation has been established, which may be through a cash payment, a share package or a value for exploitation profit in favor of the ENAMI.

13. The Regulations determine that the ENAMI must update the Regulations for the assignment and transfer of rights of ENAMI mining concessions and the Regulations for the granting of operating contracts within 90 days.

For more information, do not hesitate to contact us.



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