Overview of Mining Regulation in Brazil – Post two

To proceed with the series of posts about mining regulation in Brazil, I need to explore better what the article 176, §1 of the Brazilian Constitution, mentioned on the last post, implies to the mining companies.

As it was said, to be able to obtain the authorization of research and concession to mining-extraction, every company must be chartered under Brazilian laws, have its headquarters and management in the Country and have as corporate objective the exploitation and use of mineral resources.

It’s worth saying that equal treatment is constitutionally granted to companies, which means that there should be no distinction between national-capital and foreign-capital companies in terms of access to exploitation and use of Brazilian underground, except in areas located on the international border zone.

The Brazilian National Department of Mineral Production, responsible to regulate the enforcement of the Mining Code and associated legislation, establishes five types of regimes to govern mining extraction in Brazil:

1-           Regime of Authorization:

Comprehends the stage of mineral research, which means the implementation of works to define the mineral deposit, its assessment and the determination of the feasibility of its economic use. This stage depends on an administrative act of the Director-General of the DNPM.

2-           Regime of Concession:

Authorizes the stage of mining extraction or industrial use of mineral deposits considered technically and economically feasible. It depends on an administrative act by the State Minister of Mines and Energy, that also grants the concessionaire the right to the product of mining extraction.

3-           Regime of Permit of Artisan-Mining Extraction:

Regulates the immediate use of mineral deposits of minerals susceptible of artisan mining-extraction, irrespective of previous activities of research, following the criteria established by the Federal Government. It also depends on an administrative act by the Director-General of the DNPM.

4-           The Regime of Licensing:

This regime authorizes the use of mineral substances of immediate application in civil construction, whether in natura or other forms specified by law, irrespective of

previous activities of research. Depends on an administrative act given by local governments as City Halls and environmental agencies.

5-           Registration of Extraction

The last kind of regulation is for exclusive use in public works directly carried by bodies of the direct or autonomous administration of the Union, the States, the Federal District and the Municipalities. It authorizes the use of mineral substances meant for immediate use in civil construction.

With the stages of mining exploration being exposed, on future posts I will continue the explanation about government incentives and use of foreign resources.