Countries › Uruguay › Guide › 12. Sectors › Large scale mining in Uruguay (Minería de Gran Porte): thresholds, the State contract, guarantees, closure and the progressive IRAE surtax

Large scale mining in Uruguay (Minería de Gran Porte): thresholds, the State contract, guarantees, closure and the progressive IRAE surtax

Last verified: 2026-10-27 · Status: Stable

A metallic mining project is large scale if it occupies more than 400 hectares of direct intervention or exceeds UI 830 million in construction investment or yearly sales, counting related projects of the same economic group (Ley Nº 19.126 art. 3). The concession is granted through a contract with the Executive, backed by a performance guarantee of 5 percent of planned investment and a mine closure guarantee, after a full environmental impact study with public hearing (art. 6, 18, 20, 25 and 27). The project pays the production canon plus a progressive IRAE surtax of up to 38 percent on mining operating income, against which the canon is credited; stability or arbitration clauses trigger an extra 2 percent canon, and IRAE exemptions are barred (art. 30, 39 and 43; T.O. 2023 Title 4 art. 124 to 134).

USD figures use UYU 40.21 per US dollar, the BCU quotation for DLS. USA BILLETE on 27 October 2026; amounts in Unidades Indexadas (UI) use UYU 6.6792 per UI, the BCU quotation for 27 October 2026; amounts in Unidades Reajustables (UR) use UYU 1,940.77, the September 2026 value published by IMPO (Decreto Nº 229/026), the latest available on 27 October 2026. Conversions are for orientation only.

Key facts

Large scale mining investment or annual sales threshold	830000000 UILey Nº 19.126 art. 3, as of 2026-10-27 · in force
Large scale mining area threshold	400 hectares of direct interventionLey Nº 19.126 art. 3, as of 2026-10-27 · in force
Performance guarantee for large scale mining contract	5 % of programmed investmentLey Nº 19.126 art. 27, as of 2026-10-27 · in force
Additional production canon with stability or dispute clause	2 % of canon baseLey Nº 19.126 art. 43, as of 2026-10-27 · in force
Maximum IRAE surtax on large scale mining income	38 %T.O. 2023 Title 4 art. 132 (Ley Nº 19.126 art. 42), as of 2026-10-27 · in force
Maximum term of tax stability clause	10 yearsLey Nº 19.126 art. 30 D), as of 2026-10-27 · in force
Minimum annual production in contract	30 % of average project outputLey Nº 19.126 art. 25 C), as of 2026-10-27 · in force

The rule

1. The Executive classifies as large scale mining any metallic mining project, alone or combined with other projects of the same person or economic group, that occupies more than 400 hectares of direct intervention, has construction and assembly investment above UI 830,000,000, or has yearly sales of mining product above UI 830,000,000. The Executive may also classify projects using hazardous chemicals, needing more than 500 GWh of electricity a year or producing acid drainage. An economic group counts as a single project holder.
Cost to do it: Not a fee: the classification triggers the special regime.
Example: Investment threshold UI 830,000,000 is about UYU 5,543,736,000. / About US$137,869,585.Ley Nº 19.126 (Large Scale Mining Law) of 11 September 2013, Art. 3, 4 and 10, 2013-09-11 official text · verified 2026-10-27

2. Environmental authorisation always requires a full environmental impact study including urban impact, a public hearing under Ley Nº 16.466, and an audit of the study contracted by the project holder. Large scale mining must be located on land categorised as rural under Ley Nº 18.308, and must follow best international mining practice.
Cost to do it: The project holder pays for the study and the independent audit (art. 6).
Example: A gold project on suburban land cannot qualify; it must be on rural category land. / Same in USD.Ley Nº 19.126, Art. 5, 6 and 7, 2013-09-11 official text · verified 2026-10-27

3. A public limited company (S.A.) or partnership limited by shares may hold a large scale mining project only if all its shares are registered (nominativas) or book entry; when shareholders are not individuals, the ultimate beneficial owner (the individual who finally owns or controls the entity) must be identified.
Cost to do it: Share register and beneficial owner disclosure costs; see the entities pages.
Example: A Uruguayan S.A. owned by a foreign holding must disclose the individuals at the top of the chain. / Same in USD.Ley Nº 19.126, Art. 9, 2013-09-11 official text · verified 2026-10-27

4. The project must have a mine closure plan approved by the industry and environment ministries as part of the project, reviewed at least every three years, published on a public website kept by the holder, and implemented from the start. The holder must post a guarantee for the closure plan, environmental compliance and environmental damage, denominated in UI and made up of: the present value of the partial closure plans before each stage (for that stage, or up to five years); 10 percent of the present value of all closure activities not yet executed or guaranteed; and an additional 10 percent of the present value of all closure plan activities. It is updated every three years and released as compliance is certified.
Cost to do it: Guarantee amount set by the authorities in UI using the formula in art. 20.
Example: If closure activities have a present value of UI 100,000,000, items B and C of art. 20 alone add up to UI 20,000,000 (about UYU 133,584,000) on top of the current stage cost. / About US$3,322,159.Ley Nº 19.126, Art. 11 to 22, 2013-09-11 official text · verified 2026-10-27

5. The exploitation concession is granted by a large scale mining contract between the Executive and the holder, which must state the area (the 500 hectare cap of the Mining Code does not apply), the investment programme, average and maximum output and a minimum annual production of at least 30 percent of average output, construction and exploitation periods, confidential information, rescission causes, a supplier development plan and the performance guarantee. The contract is reviewed at each extension except the first.
Cost to do it: Contract terms are negotiated; the law fixes the minimum contents.
Example: If average output is 1,000,000 tonnes a year, the contract must require at least 300,000 tonnes a year. / Same in USD.Ley Nº 19.126, Art. 23, 24 and 25, 2013-09-11 official text · verified 2026-10-27

6. Before signing, the holder posts a performance guarantee of 5 percent of the programmed investment in favour of the Ministry of Industry, Energy and Mining, by bank deposit, government securities, surety insurance from a BCU authorised insurer or bank guarantee. 80 percent may be released in the financial year production starts; the remaining 20 percent stays in force for the whole contract and up to one calendar year after it ends.
Cost to do it: 5 percent of programmed investment, plus the cost of the guarantee instrument.
Example: For an investment of UI 1,000,000,000: guarantee UI 50,000,000 (about UYU 333,960,000, US$8,305,397); after production starts, UI 10,000,000 (about UYU 66,792,000, US$1,661,079) remains. / About US$8,305,397, reduced to US$1,661,079.Ley Nº 19.126, Art. 27, 28 and 29, 2013-09-11 official text · verified 2026-10-27

7. The contract may add only: extension by agreement; tax benefits for the investment that never exempt IRAE or its surtax on mining and related activities; State infrastructure or service commitments; a clause keeping the tax parameters specific to large scale mining and the production canon for up to 10 years; authorisation to assign the exploitation right as security to lenders, subject to Executive approval of the assignee; and dispute resolution mechanisms. Investments in mining and related activities cannot use promotional regimes that exempt IRAE. If the contract has a stability clause or dispute resolution mechanism, an additional production canon of 2 percent applies on the same base. Lenders notified of an assignment can propose a new assignee within 90 days of a rescission ground.
Cost to do it: Additional canon of 2 percent where stability or dispute resolution clauses are agreed.
Example: On yearly sales of UYU 8,042,000,000, the 2 percent additional canon is UYU 160,840,000. / On US$200,000,000 of sales, US$4,000,000.Ley Nº 19.126, Art. 30, 34, 39 and 43, 2013-09-11 official text · verified 2026-10-27

8. Holders of large scale mining concessions pay an IRAE surtax on mining operating income. Its rate is (mining operating margin x 0.90 minus 0.25) x 100, where the margin is net mining operating income divided by mining operating revenue, capped at a margin of 0.70 (so the rate cannot exceed 38 percent) and set to zero if negative. Revenue cannot be below the reference price times units sold; financial charges, the canon and royalties for brands or patents are not deductible; prospecting, exploration and environmental study costs may be amortised over five years from first production. The production canon accrued in the year is credited against the surtax of the same year, without refund of any excess; related party transactions follow transfer pricing rules and the Executive may require advance payments. The general IRAE also applies.
Cost to do it: Surtax between 0 and 38 percent of net mining operating income, less canon credit.
Example: Margin 0.50: rate 20 percent; on net mining income of UYU 4,021,000,000 the surtax is UYU 804,200,000, less canon paid of UYU 402,100,000, so UYU 402,100,000 is payable. / Net income US$100,000,000 at a 0.50 margin: surtax US$20,000,000 less US$10,000,000 canon, US$10,000,000 payable.Texto Ordenado 2023 (Decreto Nº 101/024), Title 4, from Ley Nº 19.126 art. 42, Title 4 art. 64 and 124 to 135, 2013-09-11 official text · verified 2026-10-27

9. The contract is rescinded and the title lapses, among other causes, for non payment of the production canon for two consecutive periods, assignment or lease of the right or transfer of shares without following the rules, or non payment of taxes. On rescission or expiry, fixed installations that cannot be separated and dedicated mineral transport facilities may be expropriated, and project information becomes State property; if no concession or contract is agreed, the State has 180 days to exercise a purchase preference over the project data.
Cost to do it: No fee; the consequence is loss of the title.
Example: Missing two consecutive canon payments allows the Executive to rescind the contract. / Same in USD.Ley Nº 19.126, Art. 32, 35, 36 and 37, 2013-09-11 official text · verified 2026-10-27

Operating margin	Surtax rate
0.25 or less	0 percent
0.30	2 percent
0.40	11 percent
0.50	20 percent
0.60	29 percent
0.70 or more	38 percent

IRAE surtax rate by mining operating margin (T.O. 2023 Title 4 art. 132)

Guarantee	Amount	Release	Norm
Performance guarantee	5 percent of programmed investment	80 percent when production starts; 20 percent until one year after contract end	Ley Nº 19.126 art. 27 and 29
Closure and environmental guarantee	Present value of stage closure costs plus 10 percent plus 10 percent	As closure compliance is certified	Ley Nº 19.126 art. 18, 20 and 22

Guarantees in a large scale mining project

Worked example

Performance guarantee: a project with UI 1,000,000,000 of programmed investment (UI 1,000,000,000 (about UYU 6,679,200,000, US$166,107,933)) posts UI 50,000,000 (about UYU 333,960,000, US$8,305,397) before signing; UI 40,000,000 (about UYU 267,168,000, US$6,644,317) can be released in the year production starts (Ley Nº 19.126 art. 27 and 29).
Surtax: revenue of US$200,000,000 (UYU 8,042,000,000) and net mining operating income of US$100,000,000 give a margin of 0.50 and a surtax rate of (0.50 x 0.90 minus 0.25) = 20 percent, or US$20,000,000 (UYU 804,200,000). A 5 percent production canon of US$10,000,000 (UYU 402,100,000) is credited, leaving US$10,000,000 of surtax, on top of general IRAE (T.O. 2023 Title 4 art. 132 to 134).

Step by step

1. Test the thresholds (400 ha, UI 830 million investment or sales) for the whole economic group (Ley Nº 19.126 art. 3 and 10).
2. Hold the project in a company with registered or book entry shares and identify beneficial owners (art. 9).
3. Prepare the full environmental impact study with urban impact, contract its audit and go through the public hearing (art. 6).
4. Prepare the mine closure plan and guarantee proposal (art. 13 and 20).
5. Negotiate the large scale mining contract with the Executive while the exploration permit is in force (art. 24 and 25); decide whether to seek stability or dispute resolution clauses, which cost an extra 2 percent canon (art. 43).
6. Post the 5 percent performance guarantee and sign (art. 27); keep the closure plan website updated (art. 15).

Common traps

IRAE exemptions under investment promotion regimes are barred for mining and related activities (Ley Nº 19.126 art. 39).
Stability clauses last at most 10 years and, like arbitration clauses, add a 2 percent canon (art. 30 D and 43).
Canon credit against the surtax never produces a refund (T.O. 2023 Title 4 art. 134).
Revenue for the surtax cannot be below the reference price set by the Executive (Title 4 art. 126 and 130).
Share transfers that do not follow the rules are a rescission ground (Ley Nº 19.126 art. 32).
The closure guarantee is recalculated every three years (art. 14 and 20).

Sources

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