BRAZIL Law and Practice Contributed by: Roberta Bilotti Demange and Marina Bertucci Ferreira, Pinheiro Neto Advogados
1.6 Granting of Mineral Rights Mineral rights are unilateral administrative acts, grant - ed by the federal government. The ANM is the federal agency entitled to manage, regulate and supervise mining activities in Brazil, along with the Ministry of Mines and Energy (MME). By definition, exploration rights are granted by the ANM and, in most cases, mining concessions are granted by the MME (but con - cessions for the exploitation of minerals employed in the construction industry without industrialisation are issued by the ANM). States do not have the authority to grant mineral rights. 1.7 Mining: Security of Tenure In general, there are two main types of mineral rights in Brazil: exploration licences and mining concessions. Exploration licences are granted on a first-come, first-served basis (also known as “priority”), which determines that, as long as the claimed area is not covered by any other mineral rights in force and all legal requirements have been met, the first individual or legal entity to apply for a specific area will have the right to obtain the corresponding mineral right. Exploration licences are granted for a period of up to four years, with renewal allowed for an equal period at the discretion of the ANM. If the exploration works are deemed successful with the identification of a resource, the titleholder shall submit to the ANM an exploration report. Upon the analysis and approval of the exploration report by the ANM, the titleholder shall have the exclusive right to apply for the mining concession within a one-year term counted as from the publication of the ANM approval. The mining concession application shall include detailed geological and geophysical information of the related area, as well as a mine development plan and a closure plan. The mining concession shall also be granted once, in addition to the ANM reviewing and approving all technical materials, the titleholder presents the corresponding environmental installation licence of the project. In short, Brazilian legislation provides enough certain - ty that the holder of the exploration rights, upon being
to its operations, it shall enter into land access/use agreements (or mining easements) with the respective landowner or occupier, in order to have access to, and use, the areas that are required for its operations. The landowner or occupier, as the case may be, is entitled to be paid a rent for the occupation of the area and compensation for damages. If any minerals are extracted from private lands that are not owned by the titleholder, the landowner (but not the occupier) is entitled to a royalty equal to 50% of the statutory royalty (CFEM). In the event that it is not possible to reach an agree - ment with the landowner or occupier, the Mining Code provides for a specific judicial court procedure to allow access to the area, guaranteeing payment of compensation to the property owner or occupier. 1.4 Role of the State in Mining Law and Regulations As a grantor-regulator, the federal government over - sees the exercise of exploration and mining activities under a system of concessions, licences, permits and authorisations in which it has the authority to grant mining titles to private companies. Mineral exploration may be conducted by Brazilian nationals or companies incorporated under Brazilian laws, with registered offices and management in the country, while mining activities may only be carried out by companies incorporated under Brazilian laws, with registered offices and management in Brazil. There is no requirement to form a joint venture or for any sort of state participation. 1.5 Nature of Mineral Rights The Federal Constitution provides that exploration and mining can be performed based on an authorisa - tion or concession granted by the federal government. In that aspect, the mineral right has a constitutional basis, although the terms for granting and using an exploration licence or a mining concession will be pro - vided by the law (ie, the Mining Code). Mineral rights are not considered a property right, but rather a right granted by the state based on admin - istrative law.
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