Peru – Mineral rights

Latin American Law: A History of Private Law and

Institutions in Spanish America (2004)
By M. C. Mirow

1589 Colonial administrator adopted the Ordenanzas de Toledo.

1683 Spanish authorities expanded Ordenanzas (Ordenanzas del Peru) ->Detailed methods for
discovering, claiming, owning and operating mines.
1761 Gamboa Compilation
1783 Ordenanzas de Nueva España (Aranjuez). First applied to Peru (1785), then Venezuela,
Guatemala, New Granada and Chile. ->Precise rules to allocate resources to discoverer, land
owner and the king. Work requirements to maintain claim.

Mines as royalty property, but can privately exploited by paying 20% (quinta)

Mining guild (delegation – disputacion territorial), Central Mining Tribunal (Mexico City),
Alcalde de minas, Tribunal General de Mineria (New Spain).
Revenue collection from silver deposits and indigenous slavery. Factor endowment vs. Rent seeking
Silver mining did not determine the institutional legacy in significant ways. Alignment of fiscal policy
between the crown and local elites (Grafe & Irigoin 2006)
1545 Silver rush in Peru. Labor scarcity.
1570 Imperial rule Viceroy Toledo (mita). State monopoly of mercury supply. Silver
mining shaped the Americas
189X Expansion driven by non-precious. British Investment after independence. Mita
abolished in 1812, but companies still rely on unfree labor until 1910.
1840 Nitrates development.
1879 War over ownership
1900 proliferation of electrical instruments. Small scale copper-zinc mines. Sold to
foreign firms de capital constraints.
1901 New Mining Code in Peru (U.S. capitalists pressure). Private ownership of
minerals. Cerro Pasco, La Oroya (1922)
After 1960 Obsolete underground mines (Cerro Pasco). Substitution Al/Sn

(Dore 2000)
1st Ore accessibility, mercury process Ore depletion in Peru. 10-20% higher Gold paid 20%
2nd Potosi declining, mineral depletion cost than in Mexico. Higher costs in
3rd Rehabilitation of old camps (revival and Peru due to higher taxation and Hg
expansion). Strong performance of Peru. availability.
https://www.slideshare.net/ingemmet/evolucin-histrica-de-
la-actividad-minera-en-el-per
https://www.encyclopedia.com/humanities/encyclopedias-
1548 Mexico won concession to decrease almanacs-transcripts-and-maps/quinto-real
Garner (1988) quinto by diezmo (20->10). Quinto
remained in effect until 1736 (diezmo). Spanish Peru, 1532–1560: A Social History
Potosi domain in Andean region, capital By James Lockhart. Indigenous + mineral wealth
competition. 1778 reflecting Potosi. Mita
also lowered costs in Peru
Hofman (2000)
1545 Potosi Discovery
1566 Decline in Potosi production. Santa
Barbara (Hg) discovery.
1574 Ordenanzas Toledo. Higher
awareness due to increase of Peruvian
production. Mita + Mercury. Valid until
late 18th century (Ordenanzas New Spain)
(Molina Martínez 2000)
1824 Independence. Abolish Mita and
allows private ownership.
1877 Mining Code. State ownership. No
royalty. No working requirements
1900 Mining Code. Conflicting land-state
ownership for different minerals. Export
tariffs
1950 Mining Code. Profit taxes
1971 Mining Law. Greater role of the
state. Working requirements
(Baldeón 2009)
https://prezi.com/7-tv81q_6xa2/la-mineria-en-el-peru-en-la-
epoca-colonial-tardia-1700-1824/
Mining Code 1901: context
• Ordenanzas were valid until ~1850
• Liberal doctrine (res nullius): rights granted by the state to discoverer.
French revolution and Glorious Revolution in Spain.
• Main principles: 1. Simplified process, 2. reject royal domain for public
domain, 3. no working requirements only patent/canon, 4.
surface/underground rights.
• Strong state didn’t see the right way to attract private investment.
• Late 19th century – 1940: defining mining principles in Latin America.
• Mining cartels (early 20th century): Al – Be – Bi – Co – Cu – Pb – Hg – Sn.
• Stronger state after WWII: U.N. influence (sovereignty principle)
Mining Code 1901
• Independence (1821), Ordenanzas still active until 1901.
• Same owner: surface/underground.
• 1877: local tax (return to mining promotion), eliminate working
requirements.
• 1890: 25 years without taxes
• Patent payments, ownership freedom (foreign and local), but right
granted by government officials.
• Over 63 changes in 50 years: taxes, special minerals, water rights,
Mining Bank, tariffs.
• 1915: release all taxes for gold and silver.
Mining Code 1950
• Different ownership: surface/underground.
• State as the mines owner. Mining as public interest
• 25 years tax holiday
Mining Code 1971-1981-1992
• Higher state control.
Chile summary
• Ordenanzas until 1874: work requirement, only a few ores.
• 1888: liberal Mining Code until 1971 (constitutional change).
• 1874, 1888, 1932, 1980: property through courts. Subsidiary domain:
private property.
Bolivia summary
Peru data
• Deustua (1984): 1830-1840 (Ag, Hg, Cu, Au, Sn); 1771-1898 (Ag).
• Boletín del Cuerpo de Ingenieros de Minas del Perú, Issues 89-95
(1918): 1900-1916 (Ag). (p. 151)
• https://books.google.com/books?id=E6cRAAAAIAAJ&pg=RA1-
PA151&lpg=RA1-
PA151&dq=peru+produccion+plata+1900&source=bl&ots=K08Sjpddj
_&sig=ACfU3U3oLRpiEO_k5nRwV0sL9EIwJ9mQ5Q&hl=en&sa=X&ved
=2ahUKEwiIpMG4yJ7kAhUNXKwKHXqPD9cQ6AEwEXoECAkQAQ#v=on
epage&q&f=false
• Ministry of Mines and Energy (2019): 1917 – 2017 (Cu, Ag, Zn, Ag, Pb,
Fe, Sn, Mo)
 Peru data

https://catalog.hathitrust.org/Record/010193259
https://repositorio.ingemmet.gob.pe/handle/ingemmet/16