The process for the formalization of smallscale and artisan miners requires the owners of informal mining projects to comply with certain requirements and terms which are part of an administrative procedure aimed at turning them into the “formal owners of their mining projects”, once they comply with the current legislation.

It should be pointed out that within the framework of Law Nº 29815, the power to legislate on illegal mining was delegated by Congress to the Executive. As a result, the Executive issued a legislative package, including Legislative Decree No. 1105, which basically established the requirements to be fulfilled and steps to be taken in order for miners who have joined the formalization process to finally obtain authorization to start/restart exploration, exploitation and/or processing activities. The Executive then issued another legislative package to supplement and clarify the scope of the legal rules it initially issued, establishing the requirements to be fulfilled to complete the formalization process, as summarized below:

1. Filing of a Declaration of Commitment (the deadline expired on December 03, 2012).
2. Approval of the Rectifying Environmental Management Instrument (IGAC for its acronym in Spanish).
3. Assignment Agreement and Mining Concession Exploitation Agreement.
4. Substantiation of Ownership or Authorization to Use Surface Land.
5. Water Use Authorization.
6. Authorization to Start/Restart Mining Exploration, Exploitation and/or Processing Activities.

The term available to comply with requirements two, four and five was extended by Supreme Decree N° 032-2013-EM until April 19, 2014 only for those cases where miners who had joined the formalization process had already obtained title to their mining concession or the respective mining agreement or for those cases where formal project owners had expressed their willingness to enter into exploitation agreements with miners who had joined the formalization process. In the latter case, compliance with the third requirement could be proved until April 19, 2014. Although the legal rule under analysis set the April 19th deadline, the Small-Scale and Artisan Miner Formalization Strategy approved by Supreme Decree N° 029-2014-PCM was published on the same day the deadline expired, establishing an additional term of 120 business days counted as from April 20, 2014 to define legislative and regulatory proposals to resolve and make it feasible to implement said strategy, additionally establishing a Formalization Register for the registration of informal miners who, as at April 19, 2014, had a valid status on the National Register of Declaration of Commitments.

Moreover, according to the provisions set forth in the aforementioned legal rule, annual compliance targets were set for the sectors involved in the formalization process, including the Ministry of Energy and Mines, the office of the President of the Council of Ministers, the Ministry of Environment, and the Ministry of Agriculture and Irrigation, which end in 2016.

It should be pointed out that, based on the investigations we have carried out in relation to mining formalization and prohibition processes, a total of 69,083 informal miners have filed a declaration of commitment in order to join the formalization process. The Arequipa region ranks first for the number of informal miners who have expressed interest in becoming formal, with 16,332 applications, followed by Ayacucho, with 10,070 declarations of commitment, Apurímac (7,811), Puno (7,183), La Libertad (5,720), Madre de Dios (4,827), Ancash (3,641), Ica (2,435), Piura (2,177), Cusco (2,024), Lima (1,594), and Pasco (1,246).

Therefore, from the legal rule in question we may understand that the formalization process has been extended until the year 2016. In this way, in view that this is a sensitive issue, particularly in the social field, it is advisable to have mining project owners belonging to the large-scale or medium-scale regime to keep abreast of the various formalization process which might be taking place within the areas covered by their mining concessions, even though they are not currently working in said areas, in order to be able to take action, bearing in mind the fact that the formalization process has not ended yet and new legal rules related to the process, which might require their involvement, could be issued.