The concession regime, established by the Mining Code (Decree-Law No. 227/1967), is one of the pillars of mineral exploration in Brazil. This regulatory system defines how the State, which owns the mineral resources, delegates to private individuals the right to mine (extract) these resources. It is essential to understand its aspects to comprehend how mining operates in the country.
What is the Concession Regime?
In the context of the Mining Code, the concession regime is the process by which the Union, through the Ministry of Mines and Energy, grants individuals or legal entities the right to extract and process mineral substances in a specific area. This right is formalized by a concession ordinance, which establishes the conditions, limits, and obligations for the exploitation of the deposit.
Unlike the licensing regime, which is simpler and used for mineral substances of lesser value or immediate use in civil construction, the concession is applied for minerals of greater economic value that require more complex operations and significant investments.
Stages of the Concession Process
The process for obtaining a mining concession involves the following main stages:
- Research Authorization: Before seeking the concession, it is necessary to obtain authorization for mineral research. This is the first step and allows the interested party to carry out detailed geological studies to assess the economic and technical feasibility of the deposit.
- Final Research Report: After the research, a detailed technical report must be presented to the National Department of Mineral Production (DNPM), which is now called the National Mining Agency (ANM). The report must demonstrate the feasibility of mining and the economic potential of the deposit.
- Report Approval: If the research report is approved by ANM, the interested party is qualified to request a mining concession. The approval of the report is a crucial step, as it attests that the deposit is economically viable for exploration.
- Concession Request: The interested party must then submit a formal mining concession request to the Ministry of Mines and Energy. This request must include an economic use plan for the deposit, detailing how the mining will be carried out, the extraction methods, the treatment of the ore, and the necessary investments.
- Concession Grant: After analyzing the request and the use plan, the Ministry of Mines and Energy, if everything is in compliance with the law, issues a concession ordinance that formalizes the right to mine. The ordinance defines the area, the mineral substances that can be mined, and the obligations of the concessionaire.
Obligations of the Concessionaire
Upon obtaining a concession, the holder assumes several obligations, including:
- Starting Mining: The concessionaire must start mining work within a deadline defined by law, usually 6 months from the publication of the concession ordinance.
- Execution of the Mining Plan: Mining must be carried out in accordance with the economic use plan approved by ANM. Any significant changes to the plan must be communicated and approved.
- Extraction of the Mineral Substance: The concessionaire can only extract the mineral substances specified in the concession ordinance.
- Safety and Environment: The concessionaire is responsible for the safety of workers, for the preservation of the environment, and for the recovery of areas degraded by mining.
- Annual Reports: The concessionaire must submit annual reports to DNPM (ANM) on mining activities, including production, investments made, and economic results.
- Payment of Fees and Taxes: The concessionaire must pay the fees and taxes due for mining activity.
Importance of the Concession Regime
The concession regime is essential to ensure that the exploitation of mineral resources is done in an orderly, efficient, and responsible manner. It allows the State to have control over the use of mineral resources, ensuring that mining is carried out in a technically, economically, and environmentally correct way. In addition, the concession regime ensures that mining contributes to the economic development of the country, generating jobs, income, and revenue for the government.
Conclusion
The concession regime in the Mining Code is a complex and essential instrument for mineral exploration in Brazil. Its proper functioning depends on the oversight and participation of all stakeholders, including companies, government, and civil society. Understanding the concession regime is fundamental for anyone who works in or is interested in the mineral sector.
