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MINING LEGISLATION IN MINING COUNTRIES IS DEBATED AT THE 3RD DIRMIN

 

IBRAM brought together specialists from around the world to discuss mining codes

 

Alterations to the Brazilian mining code have been on the agenda for several years in the country and the government constantly indicates that it shouldn't take long for the new laws to be approved. Within this context, the 3rd International Congress on Mining Law was attended by specialists from around the world and offered their thoughts and experience related to law changes that involve the sector.

 

The South African Peter Leon, partner and vice-president of Africa Practice - Herbert Smith Freehills LLP, analysed the legislation related to mining for the majority of the African continent and demonstrated how recent changes in regulation and an increase in taxation have negatively affected the attractiveness of the sector and reduced investments in these countries. "In addition, the African economy suffers from highs and lows, just like any other, accompanying the cycles of natural resources and oscillations in commodity prices", he explained. He also added that attracting and maintaining investment figure amongst the biggest challenges. "How can we ensure that the mining communities and also governments are protected during phases of falling prices?” he asked.

 

Peter then outlined the different approaches adopted by the continent's main countries and stated that the majority of them are investing in improving and modernising the legislation. "It's important to remember that political pressure can lead to considerable judicial uncertainty and drive away investment even further", he stressed.

 

The Canadian France Tenaille, partner and leader at Latin American Practice - Gowling WLG LLP, explained that Canada has stable laws and well-defined rules; however, it suffers from "government nuances, which affect the relationship between producers, the state and the consumer market". "Some Canadian provinces are amongst the most attractive for investment from around the world. However, each state has different legislation and there is no effort to consolidate this", she explains. In Canada, the main divergences are related to mining and 'surface' rights. According to her, legislation raises many questions in regards to ownership of the subsurface.

 

Another important issue in the country is the so-called “Crown Land”. France explained that "Canada operates based on the system of free entry - the mining company can enter the Crown Land, prospect and obtain authorization to mine, as long as meets the requirements of the legislation". "This way of operating guarantees interest in the sector and the legal certainty of the companies. Nevertheless, we need to work in a way that ensures community interests are always respected", she states. "The question is: how can the sector reconcile all interests of the parties involved?” she asks.

 

Victor Hugo Fronner Bicca, Managing Director of the National Department of Mineral Production (DNPM), detailed what the Department and the Ministry for Mines and Energy have done in relation to modernizing and adapting the new mining-code project to Brazilian requirements. "We need to improve the business environment and attract investment to Brazil. Our objective is to re-establish the mineral sector and see its return to growth. Brazil has a lot of capacity and potential", he added.

 

In the opinion of Marcelo Tunes, Director of Mineral Affairs at the Brazilian Mining Association (IBRAM) and panel moderator, "Brazil must learn the successes and failures of other countries". He also believes that "society needs to recognise the efforts of the current government and private sector to provide Brazil with instruments that could leverage the development of the mineral sector. We don't want mining to prevail over other activities, yet we expect it to be treated fairly".

 

Organised by the Brazilian Mining Association (IBRAM), in partnership with the National Department of Mineral Production (DNPM) and the School of the Attorney General of the Union (EAGU), the 3rd International Congress on Mining Law brought together national and international specialists in mining law, at the event in Brasília (DF) between the 8th and 10th May 2017. The next edition will be held in 2019.

 

IBRAM – Profissionais do Texto



SUSTAINABLE TAILINGS AND MINING WASTE MANAGEMENT DEBATED AT CONGRESS


The revision of the DNPM decrees 416/2012 and 526/2013 was also analysed at the 3rd DIRMIN.

A sustainable improvement in both production and mineral policy were the central themes of the debates held on the last day of the 3rd International Congress on Mining Law (DIRMIN). Approximately 200 participants discussed diverse issues, such as the sustainable management of tailings and other mining waste attended the event.

 

The State Prosecutor, Eduardo Almeida Aguiar, detailed Brazil's mineral production and the generation of waste. "Mining activities have evolved a lot in relation to the exploration of deposits with a lower metal value and waste rock is increasingly extracted" , he commented. However, he stressed the importance of considering the way in which the legislation deals with the disposal of waste. Amongst the solutions proposed for reuse, he cited partnerships with Academia. "Mining activity is essential, "as is the appropriate disposal of waste and the sustainability of the productive chain. This type of partnership will, in particular, generate environmental security and socio-economic gains. We need to "plant the seed" of technical and economically viable reuse", he finished.

 

Maurício Pellegrino, partner at Mendo e Souza Lawyers, complemented the State Prosecutor’s talk and underlined the importance of IBRAM, the National Department of Mineral Production (DNPM) and companies pooling their strengths. "Together, we can establish the best ways of appropriately disposing waste and internalise reuse", he stated. "Given the optimisation of production is a constant priority, the mineral industry must develop techniques to mine at increasingly lower concentrations," he added.

 

In his opinion, another important point is raising the public's awareness of mining's essential role and the efforts being made by the industry to balance an increase in production with improved waste and tailings disposal. "This is the main challenge, given that no activity exists without the generation of tailings. We need to develop new productive processes, even if they are not connected to the original one.

Amongst the suggestions presented by the lawyer was the partnership and synergy of the projects involving Academia, mining and non-mining companies, project backers and the state. "We believe that a good alternative would be the guarantee of fiscal incentives for companies that reuse the tailings of deactivated dams and invest in new means of disposal and technology.

In line with the other guest speakers, the DNPM's Advisor, José Antônio dos Santos, detailed the potential uses of the waste and underlined the importance of companies complying with the relative norms of the Brazilian Agency of Technical Norms (ABNT). "We need to guarantee technical and economic viability, as well as analyse logistics and production costs, and market acceptance", he stated.

José Antônio also cited the current partnership between the DNPM and the Federal Universities of Minas Gerais (UFMG) and Ouro Preto (UFOP), who are working together on market potential surveys and the development of public policies focused on the use of mining tailings.

 

Mining legislation and revision of DNPM decrees 416/2012 and 526/2013

 

Within this same context, Solange Costa, Vale's Mining Legal Manager and member of IBRAM's Legal Committee, talked about the current legislation in relation to Dam Safety Plans (PSB) and Mining Dam Emergency Action Plans (PAEBM) both of which are currently being reviewed by the DNPM.

 

By way of a historical analysis of the laws governing the sector, Solange listed the main differences between the authorities' current instruments and future normative rules. She also presented the contributions made by IBRAM to the government agency, in particular related to the risk classification of dams and the obligations of the companies involved. "The sector's current considerations particularly revolve around deadlines, procedures stipulated by law and the responsibilities of each part of the mineral chain. I'm convinced that by working together, we can be a part of the solutions to mining and the disposal of tailings and waste", she finished.

 

Walter Arcoverde, DNPM's Director of Mining Activity Control, presented the department's data and those actions developed to guarantee dam safety. "The normative revisions show that all companies, without exception, need to ensure a constant and effective monitoring of their dams. It's important to stress that the DNPM strongly believes it's fundamental to consider variations in mineral prices and the fall in investments observed around the world when developing its norms", he added.

Arcoverde took the opportunity to praise the technical work and efforts of the Brazilian Mining Association (IBRAM) to develop the Management and Handling of Mining Tailings Guide, which was published in 2016. "We are facing a challenging scenario of falling prices yet with the need to expand production and reduce costs. We cannot simply stop investing in safety - and this message is presented in the IBRAM publication. Our future consists of eliminating risks", he pointed out.

 

Frederico Munia Machado, DNPM's Head Attorney and moderator of the panel, stressed that "it is necessary to work to strict standards with regards to dam safety and it is unacceptable to take any kind of risk".

 

Organised by the Brazilian Mining Association (IBRAM), in partnership with the DNPM and the School of the General Attorney Office (EAGU), the 3rd International Congress on Mining Law brought together national and international specialists in mining law, in Brasília (DF). The next edition w ill be held in 2019.


IBRAM – Profissionais do Texto


 

 

PROGRAMME INTENDS TO MAKE THE MINERAL SECTO COMPETITIVE AGAIN

 

Amongst the proposals detailed by the DNPM at the 3rd International Congress on Mining Law is the creation of the National Mining Agency. The objective is to re-establish the sector's credibility and attract new investments.

 

The revitalization of the mineral sector was the central theme of the Managing Director of the National Department of Mineral Production (DNPM), Victor Hugo Froner Bicca, on the second day of the 3rd International Congress of Mining Law (DIRMIN). Bicca defended the creation of the Brazilian Mineral Industry Revitalization Programme, the DNPM's main project to meet the growing demand of requests for mining surveys, particularly in the interior of Brazil. "The draft law 5807/2013 must be re-evaluated in line with the new political and economic scenario of the country and the world", he explained. "We intend to present new texts to the National Congress with guidelines that aim to improve the business environment and attract investment, as well as return the Brazilian mineral industry to growth", he added.

 

Of the proposals highlighted by Bicca during the 3rd DIRMIN, the one that stands out is the creation of the National Mining Agency, which will replace the DNPM. The project, which has been discussed for more than 20 years, represents a form of guaranteeing more independence and neutrality to the body and there is no resistance to this from the sector's various players. "Amongst our requests is the definition of clearer and less judicial norms and more democratic, transparent and justifiable", he explained.

 

In addition, the agency is working on the alteration of sections of the mining code, as well as mining in border areas, the Copper National Reserve and the Financial Compensation for the Exploration of Mineral Resources (FCEM). The objective is to change the calculation basis of the FCEM to provide the flexibility for mining companies to deal with periods of low demand, reduce legal issues, increase the efficiency of collections and maintain the share of revenues. "The main changes involve the basis for calculation and the reference prices, which should reflect the current market value of the good when negotiated", he explained.

With regards to those areas in the so-called border zone, which corresponds to 27.5% of the national territory, Bicca believes that the legislation needs to "translate the spirit of the current scenario", which means, in the opinion of the DNPM, allowing overseas capital to participate in mining activities in these areas. "We require that the concepts of Resources and Reserves as practiced by the international markets be instituted here so that the country is open to the capital markets", stressed Bicca. "We have a wide range of mineral attractions and we believe that it's fundamental to simplify the understanding of the law so that we can further develop these areas", he concluded. The agency is also targeting a change in the duration of the authorization for surveys and extensions in specific cases (such as an impediment to accessing an area or the failure to obtain an environmental licence), in addition to the possibility of continuing research projects following the presentation of the Final Report to the DNPM.

 

In terms of the Copper National Reserve, created in 1984, it's establishment effectively prohibited mineral activities over approximately 46 thousand square kilometres of Brazilian territory. "The Brazilian Geological Service (CPRM) carried out a series of surveys and noticed that the region has a high potential for the extraction of ores such as gold, copper, nickel and phosphate, and the private sector is interested in investing. The prohibition of mining in this area, as provided for by law, only serves to increase illegal mining operations", he lamented.

He also stated that the last survey revealed more than 42 illegal runways in the region. "Our objective is to free up the area for mineral research, which is currently 'covered' by requirements", he finished.

 

"We are certain that these alterations will reduce the discrepancies between the segments affected by mining and contribute to a return to growth. We need regulations that give us the capacity to carry out the changes that Brazil needs and guarantee that the sector regains its credibility, attracts more investments and increases its contribution to the GDP", completed Bicca.

 

Organised by the Brazilian Mining Association (IBRAM), in partnership with the National Department of Mineral Production (DNPM) and the School of the Attorney General of the Union (EAGU), the 3rd International Congress on Mining Law brought together national and international specialists in mining law, at the event in Brasília (DF).

IBRAM – Profissionais do Texto

Highlights

 

 

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