Argentina does not have a specific legal framework applying to lithium projects or a particular agency that controls its execution.

Due to the federal nature of the country, federal and provincial laws apply to the exploration and exploitation of minerals, including lithium which is considered a first-category mineral (mineral de primera categoría)^[1]

Under the federal legal system, the National Constitution establishes that the provinces are the owners of the mineral resources within their jurisdiction,^[2] while the Federal Mining Code sets out the rights and obligations concerning the acquisition for the exploration and exploitation of the minerals.^[3]

Two types of concessions are established in the Federal Mining Code, allowing individuals or legal entities acquiring them to explore and develop the mineral deposits and freely dispose the extracted minerals.^[4] The concessions are granted in perpetuity but may expire if the work and investment obligations -required to hold the title in good standing- are not duly met.

In addition, federal laws and regulations promoting investments, and establishing export duties, free competition, tax incentives, and minimum environmental standards apply to the exploration and exploitation of minerals, including lithium.

It is worth mentioning that the mining activity has a special promotional regime which grants investors significant tax benefits at the federal level including deductions, exemptions, and subsidies.^[5] It also guarantees fiscal stability for thirty years as from the submission of the mining feasibility study. Besides, the mining royalties should not exceed 3% of the pithead value of the minerals extracted.

 Moreover, the National Secretariat of Mining has recently approved the "Strategic Plan for Argentine Mining Development" aimed to elaborate a general strategy focused on consolidating the role of the mining industry within the next thirty years by increasing exports, implementing a progressive tax regime, and promoting sustainable mining.^[6]

Besides, Decree No. 234/21 recently enacted at the federal level created the “Investment Promotion for Exports” intended to promote direct domestic and foreign investment to increase productive export capacities.

This regime applies to investments on new projects in the mining industry with a minimum value of US$100 million, determined at the time the project is filed. The beneficiaries can freely use up to 20% of the foreign currency obtained in project-related exports to pay principal and interest on commercial or financial liabilities abroad, and/or revenues and dividends related to closed and audited balance sheets, and/or to the repatriation of non-resident direct investments.

As regards the local powers, the provinces are entitled to regulate the procedural aspects concerning the grant of the mining concessions, issue the environmental license, and enact the complementary regulations on the environmental aspects applying to the mining projects.

The environmental license must comply with the minimum standards set forth in federal laws No. 24,585 (which sets out rules on environmental protection for mining activities incorporated in Title XVIII, section 2 of the Federal Mining Code) and 25,675 (General Law on the Environment).

In most provinces, the provincial enforcement authority issues an environmental impact declaration that authorizes to carry out the proposed activities and establishes the conditions that the applicant must observe throughout the project. The environmental impact declaration is generally valid for two year and companies must submit updates on the environmental impact study.

In the Province of Jujuy, the environmental impact study concerning lithium projects is subject to a stricter review since it must be approved by a special commission formed by several agencies which do not intervene in the environmental approval of other types of projects.^[7]

As regards the social license, and according to the Argentine Constitution,^[8] and the ILO Convention 169,^[9] indigenous communities are entitled to be recognized as entities with legal status. As such, they can exercise collective rights related to the community ownership of the lands they live in and the property of the existing natural resources.

The legal status of indigenous communities should be registered in a special registrar alongside with other information concerning the organization and its authorities, place, and area of interest.

Depending on the province, the consultation procedure concerning indigenous communities may be held separately or simultaneously.^[10] In most cases, it is not necessary that the indigenous communities provide their consent to a mining project since it is restricted to specific cases foreseen in Section 16 of ILO Convention 169.

Opposition by indigenous communities to the execution of any mining activity is not binding on the authorities. Nonetheless, the observations raised by the indigenous communities within a public consultation procedure should be properly addressed by the authorities when issuing the environmental impact declaration.^[11]

Moreover, the Escazú Protocol recently adopted by Argentina^[12] promote the public participation in the environmental decision-making process,^[13] which is already regulated by Law No. 25,675 (General Law on the Environment) and Law No. 25,831 on free access to public information on environmental matters. Likewise, the provinces passed laws and complementary regulations concerning the right of consultation.

The regulatory framework does not foresee the obligation to add value to the lithium carbonate and chloride extracted, which is mainly exported to different countries, (i.e., United Stated, China, India and the United Kingdom) where the salts are processed and used for derived products with higher added value. In other words, there are no requirements to invest downstream and, hence, no barriers to get the lithium out of the ground in the first place.

Finally, the principle of non-discrimination applying to the companies which explore and exploit mineral resources is a key feature of the Argentine legal framework. In fact, the Argentine legal regime is clearly most favorable compared to the regimes enacted by the neighboring countries which formed the so-called “lithium triangle” and pose many restrictions on the lithium exploitation and its concession by having declared it as a strategic national resource^[14].

^[1] The Federal Mining Code classifies mines according to the type of mineral discovered. First mines are those in which the soil is an accessory, that belongs to the provincial state in which it lies and can only be exploited given legal grant by the mining authority. First mines comprise the following metals: (i) gold, silver, platinum, mercury, copper, iron, lead, tin, zinc, nickel, cobalt, bismuth, manganese, antinomy, wolframite, aluminum, beryllium, vanadium, cadmium, tantalum, molybdenum, lithium and potassium; (ii) arsenic, quartz, feldspar, mica, fluorite, calcareous, phosphates, sulfur, borates; (iii) precious stones; (iv) certain fuels: mineral coals, lignite, anthracite coal and solid hydrocarbons.

^[2] Cfr. Article 24 of the National Constitution.

[3] Cfr. Article 1 of Federal Mining Code.

^[4] The mining concession for exploration is granted prior to launching an exploration of works, the mining company must obtain an exploration concession from the provincial mining authority. Such concession grants the exclusive right to explore and obtain the development concession if a discovery is effectively made. Cfr. article 156 and following of the Mining Code. 

^[5] Cfr. Federal Mining Investment Law No. 24,196.

^[6] Cfr. Resolution 47/20 issued by the Federal Secretariat of Mining. The objectives of the Strategic Plan are: (i) the promotion of the sustainable development of the mining sector and the investments in exploration and exploitation, (ii) the guarantee of the correlation between the fiscal cost of mining promotion policies and the effective investments; (iii) the development of the mining activity as an opportunity for the integral growth of individuals and communities, (iv) educate on the importance of the mining activity.

^[7] Cfr. provincial Decree No. 7592/2011.

^[8] Cfr. Article 75 inc. 17 of the National Constitution.

^[9] Approved by Law No. 24,071.

^[10] In the Province of Jujuy, the consultation with the indigenous communities is held in a separate way.

^[11] It should be noted in the case “Comunidad Aborigen de Santuario Tres Pozos y otros c/ Provincia de Jujuy y otros s/ amparo” (Expte. C.1196.XLVI) some indigenous communities filed an action against the Provinces of Salta Jujuy ant the federal government, arguing that the consultation, information, and participation procedure prior to the issuance of the permits for the exploration and exploitation of lithium and borate in the Salinas Grandes was not met.

The Supreme Court considered that the plaintiffs did not demonstrate that the alleged damages affected them "in a sufficiently direct or substantial way” and, thus, determined there was not an actual case or controversy and rejected the action as regards the Province of Jujuy. Concerning the Province of Salta and the federal government, the Court declared that it lacked jurisdiction.

^[12] The Escazú Agreement was adopted by Law No. 27,566.

^[13] See article 7 of the treaty, available at https://treaties.un.org/doc/Treaties/2018/03/20180312%2003-04%20PM/CTC-XXVII-18.pdf.

^[14] It should be noted that Decree No. 7592 issued by the governor of the Province of Jujuy declared lithium as a strategic resource. However, such declaration implies that lithium projects are subject to a stricter review prior to its approval. Also, there was a federal initiative to declare lithium as a strategic resource, but it was not approved by the National Congress and faced a strong resistance by the provinces involved, which have recently formed the “Lithium Commission” (Mesa del Litio) aimed to promote the development of lithium mining in Argentina.