Neuquén Province to levy royalties on sand extraction for Vaca Muerta

The Neuquén Legislature has begun debating a new mining royalties regime that would allow the province to collect payments on sand and other mineral extraction used in the Vaca Muerta shale‑oil field. The proposal, presented by provincial government in March and championed by deputy Rolando Figueroa, sets two royalty rates: 3 % of the mine‑gate value when the material is processed outside the province and 2 % when processing occurs within Neuquén.

The bill defines sand used for hydraulic fracturing as a first‑category mineral, meaning it belongs to the state rather than the landowner. Director of Mining Carlos Portilla explained that “for Neuquén those sands are first‑category, while in other provinces they are treated as general quarries.” Current extraction is about 50,000 tonnes per month, which presently pays no provincial royalty. The regime exempts scientific research and quarries used for public works.

Provincial minister Leticia Esteves said the framework aims to give “clear rules of the game and predictability for investors,” noting that lower‑cost local sand blends could increase activity as industry requirements ease.