MAC: Mines and Communities

Brazil freezes new mine claims pending reforms

Published by MAC on 2012-06-26
Source: Reuters (2012-06-15)

The week before world leaders gathered for the Earth Summit (Rio-plus-20) in Brazil, the country's government froze all new mining claims.

However, it didn't mark any change of heart by Latin America's largest minerals' producer.

Although the move is aimed at laying the path for an increase in royalties paid by extractive  companies, it is also intended to promote "swifter development" of deposits.

Brazil freezes new mine claims pending reforms

For the past four years, the state has been working on a draft bill that will rewrite the country's 50-year-old mining code and has stopped granting new mining claims in the interim.

By Sabrina Lorenzi

Reuters

15 June 2012

Sao Paulo -The Brazilian government has stopped granting new mining claims as it drafts an overhaul to half-century-old regulations for the sector, the president of mining lobby Ibram said on Thursday.

For the past four years, the government has been working on a draft bill that would rewrite Brazil's 50-year-old mining code. It wants to raise royalty payments and impose stricter deadlines for developing claims, along with other changes.

"Mining in Brazil is paralyzed because the claims to mineral rights are totally suspended," Ibram president Jose Fernando Coura told Reuters.

He said that new claims for concessions have been frozen since the end of 2011 or early this year, but the National Mineral Production Department (DNPM), which regulates the mining sector, only formally informed Ibram two weeks ago.

As regulation now stands, concession holders can sit on potential mineral deposits without exploring or developing them for years. The government wants swifter development of the mineral deposits and less speculative claims that concession holders can flip after a few years on the expectation of rising metals prices.

Concession holders are individuals or companies that submit mining claims.

Coura said thousands of claims are waiting for approval at the DNPM, which has angered applicants.

A DNPM representative contacted by Reuters had no comment.

(Writing by Reese Ewing; Editing by Bob Burgdorfer)

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