The New Regulation Of The Brazilian Mining Code

Author:Mr Christian Galvão Davies
Profession:Levy & Salomao Advogados
 
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In the context of the mining sector reform, on June 12, 2018 President Michel Temer enacted Decree No. 9,406, which on December 9, 2018 will revoke and replace Decree No. 62,934, of July 2, 1968, as the regulation of the Brazilian Mining Code (Decree-Law No. 227, of February 28, 1967)1

The new regulation intends to modernize the Brazilian mining legal framework, but it also brings aspects of questionable legality. In addition, one of the most important changes - the replacement of the National Department of Mineral Production (Departamento Nacional de Produção Mineral - DNPM) with the Mining National Agency (Agência Nacional de Mineração - ANM) - requires measures that, if not implemented, may affect the efficacy of the new agency.

Positive aspects

The new regulation brings some positive innovations set forth in one of the bills of law originally intended to reform the mining sector, but which was not timely approved by Brazilian Congress, namely Provisional Measure 790, of July 25, 2017 ("PM 790")2.

One such positive innovation is the adoption, for the purpose of reporting of research results, subject to ANM regulations, of international technical standards of classification of mineral resources and reserves3. The use of standardized international concepts facilitates comparisons between results of researches performed in different mining enterprises in national or foreign territory, to the benefit of national and foreign investors.

Also as set forth in PM 790, Decree No. 9,406 allows for the continuation of mining research even after the final research reports are filed with ANM at the time of the request for a mining concession. This allows the owner of the mining right to refine knowledge of the mineral deposit in question. Updated results can also be used to supplement the final research report delivered to the agency, as well as the economic mining plan regarding the exploitation of the mine.

Another innovation sought by PM 790 and maintained by the new decree regards areas no longer attached to a previously existing mining right, the so-called "released areas". Such areas will be made available to third parties interested in mining exploitation, in competitive proceedings based on objective criteria, to be regulated by ANM. This new regime is expected to reduce speculation by agents not interested in effective mining activities. The preceding regulatory framework allowed anyone to request research authorizations over released areas...

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