The Brazilian Mining Sector Starts 2015 With Regulatory Changes And A New Minister

Author:Mr Pedro Garcia, Catarina Freitas and Thiago Valente
Profession:Veirano e Advogados Associados

By the end of December 2014, the National Department of Mineral Production ("DNPM") issued ordinances 540, 541 and 542 bringing various regulatory changes for the mining sector with respect to mineral waters, administrative proceedings applicable to all mining segments and extraction of fossils. Some of the most relevant aspects of these ordinances are highlighted below.

Also, the new year began with the new Minister of Mines and Energy taking office, Mr. Eduardo Braga, who, in his inauguration speech, indicated that he will revisit the Government's proposal for the new mining regulatory framework, taking the current economic scenario into account. Mr. Braga was the Mayor of the City of Manaus, in the State of Amazonas, from 1994 to 1996, Governor of Amazonas from 2003 until 2010, and, finally, while a senator, he was the Government leader in the Senate from March 2012 to 2014.

Ordinance on Mineral Waters

Ordinance 540, which is more specific to companies in the mineral waters segment, came into force on the same date of its publication, December 19, 2014. The Ordinance on Mineral Waters establishes minimum thresholds of elements or substances for the classification of Mineral Waters by the DNPM. Such classification shall be made according to the predominant element and the need to establish, in the appropriate proportions, the limits of ions or elements and substances in mineral waters, in accordance with Brazilian regulations and international standards. In this regard, the Ordinance on Mineral Waters classifies as mineral waters the waters from natural sources or artificially collected sources that contain elements or substances with the following minimum thresholds:

a) Fluoridated Water - when containing at least 0.02 mg/L of fluoride;

b) Vanadium Water - when containing at least 0,03 mg/L of vanadium;

c) Lithia Water - when containing at least 0,01 mg/L of lithium; and

d) Selenium Water - when containing at least 0,006 mg/L of selenium.

Administrative Proceedings Ordinance Ordinance 541 has a broader scope and applies to mining companies in various segments. This new Administrative Proceedings Ordinance will only come into force on February 2, 2015, but will in some circumstances apply to ongoing proceedings before the DNPM. The new fees relative to the extension of small scale mining permits and to the issuance extraction (experimental) permits (the so-called "Utilization Permits"), on the other hand, will only apply to requests...

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