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•QUESTION 7 Where are mining concessions and how are they allocated?Legislation regarding concession allocation has resulted in overlapping mandates.The Venezuelan state holds the rights to minerals found beneath the soil. The rights to extract theseminerals are given out through a concession system managed by the Ministry of Energy and Mines(MEM). Concessions last for up to twenty years, with possible extensions not to exceed an additionaltwenty years. Originally, MEM held sole responsibility for allocating mining concessions. However,in the early 1990s, MEM delegated this responsibility to the state-owned development corporation,known as the Corporación Venezolana de Guayana (CVG), located in the Guayana region. The CVGwas given the mandate to issue contracts with third parties, while MEM retained its right to issuemining concessions. As a result, mining concessions and contracts have been allocated according toa complicated system that includes eight separate legal mechanisms (see Table 10).In theory, CVG and its joint venture partners were required to apply formally to the MEM for a concession,but this process rarely occurred. The CVG’s right to issue contracts with mining companieswas rescinded in 1996 by presidential decree and a new regulation was established in 1999, requiringall concessionaires to register their claims with the MEM.TABLE 10Legal Mechanism for Granting Mining Concessions in the Guayana RegionLegal instrument Date PurposeDecree 1046Resolution 106Decree 845Decree 1409Resolution 2Decree 3281Decree 1384Mining Law19861986199019911991199319961999Designates El Dorado, Chicanan, Km 88 as mining areasMinistry of Energy and Mines delegates authority for granting contractsunder Decree 1046 to the CVGDesignates Icabarú, San Salvador de Paúl, Guaniamo, Los Picachos deOris and other areas for miningDesignates new areas for mining expansion in Bolívar StateMinistry of Energy and Mines delegates authority for granting contractsunder Decree 1409 to the CVGAllows the CVG to enter into contract agreements with third partiesAnnuls Decree 3281Returns right to grant concessions to the MEM; defines and regulatesmining at a national levelThe new mining law issued in 1999 defines the terms and types of concessions. It places the mandatefor administration of concessions squarely with the Ministry of Energy and Mines and includesthe following main provisions:• Minerals extraction is emphasized and concession owners are discouraged from holdingon to undeveloped properties. Exploration is limited to a period of three years, with apossible one-year extension.• No concession owner can hold more than 12,312 hectares.56