Mining Comparative Guide

1 Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?

The legal framework for mining in Brazil is primarily governed by Decree-Law 227/1967, known as the Mining Code. This code outlines the principles and rules for:

• mining exploration;
• state control; and
• regulatory oversight.

Additionally, mining activities must adhere to:

• the Brazilian Constitution;
• Decree 9,406/2018 (which sets out further regulations under the Mining Code); and
• other applicable laws, decrees and directives established by:
• • the Ministry of Mines and Energy; and
  • the National Mining Agency (ANM).

1.2 When was the mining legislation last reviewed?

The most recent review was in December 2022, when Law 14,514/2022 was enacted, introducing reforms to the mining sector. Key changes include the following:

• The duration of exploration licences was extended from three to four years, with a possible four-year renewal; and
• Applicants for mining concessions can now declare their intent to secure necessary funding, rather than providing immediate proof of financial resources.

These changes have modernised the Brazilian mining framework, aligning it with current industry practices.

1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?

In Brazil, mining operations are governed by a comprehensive legal framework that includes, in addition to the statutes outlined in question 1.1:

• environmental legislation mandating licences at various project stages;
• labour laws ensuring workers' rights and safety; and
• constitutional provisions protecting the rights of Indigenous and traditional communities, which require prior consultation for projects affecting their lands.

In addition, mining companies must:

• comply with tax obligations such as the Financial Compensation for the Exploitation of Mineral Resources; and
• have proper land use agreements with landowners to address surface rights.

1.4 Are there any regional treaties or laws that need to be taken into account?

Mining activities in Brazil are primarily governed by federal laws, but there are also state-specific regulations that are relevant. As an example, the state of Pará permits municipal authorities to license gold mining projects on areas up to 500 hectares – a policy that has faced legal challenges due to concerns about promoting illegal mining activities. Additionally, as a member of Mercosur, Brazil adheres to regional agreements such as the Protocol of Cooperation and Facilitation of Investments, which establishes common legal conditions to encourage reciprocal investments among member states.

1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?

The mining industry is administered by the Ministry of Mines and Energy and the National Mining Agency (ANM), through laws, decrees, ordinances and resolutions. Mining laws and regulations are primarily enforced by the ANM, which:

• oversees mineral resource management;
• issues licences; and
• ensures compliance with industry standards.

Environmental aspects of mining are regulated by:

• the Institute of the Environment and Renewable Natural Resources (IBAMA), which is responsible for environmental licensing and monitoring adherence to environmental laws; and
• the Ministry of Mines and Energy, which formulates policies and provides strategic direction for the mining sector, guiding the operations of both the ANM and the IBAMA.

1.6 What is the regulators' general approach in regulating the mining sector?

The regulators emphasise governance, transparency and sustainable practices. In recent years, the ANM has advanced efforts to enhance transparency and governance standards. However, there is much to be done in Brazil to catch up with the standards that apply in more mature mining jurisdictions.

2 Mining industry

2.1 How mature is the mining industry in your jurisdiction?

Brazil has a highly developed mining industry and is a key player in the minerals market. The country is a leading producer of several minerals, such as:

• iron ore;
• manganese;
• niobium; and
• bauxite.

In 2020, Brazil's mineral production was valued at approximately $41 billion. The country's mining infrastructure is well established, with a capable workforce and abundant natural resources.

2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?

Mining activities in Brazil are concentrated in specific regions. The country is the world's second-largest exporter of iron ore, with major mining operations in the states of Minas Gerais and Pará. It also holds an impressive 98% of global niobium reserves, primarily in Minas Gerais. In addition, it has significant bauxite production in the state of Pará and manganese deposits mainly in Pará and Amapá.

2.3 Are any minerals deemed strategic and, if so, what impact does this have?

As mentioned in question 2.2, Brazil holds approximately:

• 98% of global niobium reserves;
• 22% of global graphite reserves;
• 16% of global nickel reserves; and
• 17% of the world's rare earth elements, placing it third worldwide in terms of rare earth deposits.

Although Brazil is a key producer of minerals, it still mainly sells raw materials instead of developing its own downstream industry to process those raw materials locally and add significant value thereto.

2.4 Who are the key players in the mining industry in your jurisdiction?

Brazil's mining industry includes many heavyweight companies, but the key players are:

• Vale SA, one of the world's leading iron ore producers;
• Companhia Brasileira de Metalurgia e Mineração, which specialises in niobium extraction and processing, and controls a significant share of the global market; and
• Anglo American Brasil, which produces iron ore and nickel.

2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?

In Brazil, beyond standard exploration and mining concessions, small-scale mining takes place through specific titles known as permissões de lavra garimpeira (PLGs). These are designed to regulate the activities of individual small-scale miners commonly referred to as 'garimpeiros', allowing them to legally extract certain minerals within designated areas. The PLG aims to formalise small-scale mining operations, subjecting garimpeiros to environmental and safety regulations.

3 Exploration rights

3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

In Brazil, mineral prospecting and exploration require specific licences from the National Mining Agency (ANM). The primary authorisation is the exploration licence, which grants the holder the right to explore a designated area for mineral resources. This licence is typically valid for one to three years and can be extended for an equal period. The application process involves:

• submitting detailed plans of the proposed exploration activities; and
• demonstrating technical and financial capability.

Small-scale mining activities, known as garimpagem, involve the manual or minimally mechanised extraction of minerals such as gold. Historically associated with informal operations, these activities are regulated through permissões de lavra garimpeira (PLGs) issued by the National Mining Agency (ANM). A PLG grants individuals or cooperatives the right to prospect for and mine specific minerals within designated areas, typically not exceeding:

• 50 hectares for individuals; and
• up to 1,000 hectares for cooperatives.

The permit is valid for up to five years and can be renewed at the ANM's discretion.

3.2 What requirements must be satisfied to obtain a licence?

To obtain an exploration authorisation from the ANM, the applicant must:

• submit a detailed exploration plan; and
• demonstrate both technical and financial capabilities.

Upon successful exploration and environmental approval, the mining company must submit a final exploration report to the ANM; if the report is approved, the mining company has one year (extendable by an additional year) to apply for a definitive mining concession. This concession grants the right to commercially extract minerals and is typically valid until the deposit is exhausted.

3.3 What is the procedure for obtaining a licence? How long does this typically take?

Obtaining a mining permit in Brazil involves several steps. Initially, the mining company must secure an exploration licence, granting the right to explore a specified area for mineral resources. Once exploration confirms a viable mineral deposit, the mining company must submit a final exploration report to the ANM. Upon approval, the mining company has one year, extendable by an additional year, to apply for a mining concession, which permits commercial extraction of the minerals. The duration of this entire process varies based on factors such as:

• the complexity of the project;
• environmental matters; and
• the regulatory efficiency of the ANM branch in each state.

Typically:

• obtaining an exploration licence takes a few months; and
• obtaining a mining concession may extend the timeline to five to 10 years.

3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

Any Brazilian individual, either by birth or naturalisation, or company incorporated and based in Brazil can own an exploration or mining permit. A foreign company cannot own an exploration and mining permit in Brazil directly, but such foreign company can hold the totality of the corporate capital of a Brazilian company.

3.5 What fees and other charges are incurred in obtaining a licence?

The applicant for an exploration licence must pay a standard application fee per tenement, which is not based on the tenement's area. Additionally, holders of an exploration licence must pay an annual fee per hectare (TAH). As of 1 March 2024, the TAH:

• is set at BRL 4.53 per hectare for the initial term of the exploration licence; and
• increases to BRL 6.78 per hectare during the term extension.

Failure to pay the TAH by the due date may result in fines and other penalties.

3.6 What is the duration of a licence? What is the process for renewal?

The exploration licence is typically issued for a period of one to three years and the holder may request a renewal for an equivalent duration by submitting a formal application to the ANM before the current licence expires. This renewal request must include a justification for the extension, demonstrating that ongoing exploration activities necessitate additional time. The AMH will evaluate the renewal request based on factors such as:

• the progress of the exploration work; and
• adherence to the approved exploration plan.

The approval of the extension depends on:

• the holder's compliance with all regulatory requirements; and
• the timely provision of necessary documentation.

3.7 What are the operator's rights and obligations under the licence?

Exploration licence holders must:

• follow the approved exploration plan;
• comply with environmental regulations;
• submit periodic progress reports to the ANM; and
• fulfil financial responsibilities, including the payment of applicable fees and taxes.

3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?

Exploration licence holders are not required to relinquish portions of their licensed area during the exploration phase. However, upon completing exploration activities, if the licensee intends to proceed to a mining concession, it must submit a comprehensive final exploration report to the National Mining Agency (ANM). This report should specify the exact area proposed for mining operations and any sections of the original exploration area that are not included in the mining concession application must be relinquished, making them available for other potential applicants.

3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Exploration licences can be transferred, either partially or entirely, to eligible legal entities or individuals. The current holder must submit a formal request to the ANM with the necessary documentation. The ANM will assess the application to ensure that the transferee meets all legal and technical criteria, such as:

• the transferee's suitability and ability to ensure the continuity of responsible mining practices;
• adequate technical expertise and financial resources to effectively conduct exploration or mining activities;
• compliance with operational and environmental standards; and
• adherence to all existing legal and regulatory obligations associated with the mining rights, including:
• • environmental licensing;
  • safety protocols; and
  • financial responsibilities, such as payment of applicable fees and taxes.

Transactions involving the transfer of such rights may be subject to capital gains tax, depending on the specifics of the transaction.

3.10 Does an exploration licence give any priority when applying for a mining right?

Obtaining an exploration licence grants the holder exclusive rights to explore a specified area for mineral resources. This exclusivity ensures that, upon successful exploration, the holder has the priority to apply for a mining concession over the discovered deposits.

4 Mining rights

4.1 How is ownership of mining rights determined in your jurisdiction?

Mineral resources are property of Brazil and the government grants private entities the rights to explore and extract these resources through a structured licensing system. The process begins with obtaining an exploration licence; if a viable mineral deposit is discovered, the licensee can apply for a mining concession, granting the right to commercially extract the minerals. These rights are exclusive to Brazilian individuals or companies incorporated in Brazil, as foreign entities are not permitted to directly own mining rights.

4.2 What are the key requirements in order to apply for a mining right?

Please see questions 3.1, 3.2 and 3.4.

4.3 What fees and other charges are incurred in obtaining a mining right?

Acquiring mining rights entails several fees and charges. Initially, applicants must pay a standard application fee when submitting their request to the National Mining Agency (ANM). Once the exploration authorisation has been granted, holders must pay the annual fee per hectare, which continues until:

• submission of the final exploration report; and
• grant of a mining concession.

Upon commencing mineral extraction, the mining company must pay the financial compensation for the exploitation of mineral resources – a charge which is payable to the government mostly on the sale of minerals, representing 1% to 3.5% of the gross revenue from mineral sales less taxes. In some states, the mining company must also pay the mining activities control, monitoring and inspection rate (TFRM). Additionally, obtaining necessary environmental licences involves specific fees that vary based on the project's scope and location.

Mining companies are also subject to various taxes, including:

• corporate income tax;
• social contributions;
• state VAT; and
• municipal service tax.

4.4 What is the duration of a mining right? What is the process for renewal?

A mining right is granted through a mining permit, which authorises the holder to commercially extract mineral resources from a specified deposit. Unlike exploration licences, which have defined durations, mining concessions are typically granted for an indefinite period and remain valid until:

• the mineral deposit is exhausted; or
• the concession is otherwise terminated due to non-compliance or other legal reasons.

Therefore, there is no renewal process for mining concessions, as their validity is linked to exhaustion of the mineral deposit.

4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

Any Brazilian individual, either by birth or naturalisation, or company incorporated and based in Brazil can own an exploration or mining permit. A foreign company cannot own an exploration and mining permit in Brazil directly, but it can fully own a Brazilian company which owns mining rights.

There are no specific requirements or restrictions for Brazilian mining companies which have foreign shareholders, regardless of their corporate capital interest.

4.6 Do any indigenous ownership requirements apply in your jurisdiction?

Indigenous individuals have the same rights as other citizens to acquire mining rights, but mining activities in Indigenous areas require additional legal procedures. Mineral exploration or extraction on Indigenous lands requires specific authorisation and involve consultation with the affected Indigenous communities to ensure their rights and interests are protected. Therefore, while Indigenous status does not impose ownership restrictions, mining operations in Indigenous areas are subject to special legal considerations to uphold constitutional protections.

4.7 What role does the state play in the mining industry in your jurisdiction?

The state plays an important role in the Brazilian mining industry through the Ministry of Mines and Energy (MME) and the ANM. The MME is responsible for:

• formulating policies and strategies for the development of the mining sector; and
• ensuring the sustainable use of mineral resources.

The ANM, which operates under the MME, oversees the regulation and supervision of mining activities, including:

• issuing exploration licences and mining concessions;
• enforcing safety and environmental standards; and
• monitoring compliance with legal and regulatory frameworks.

4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?

The government primarily regulates mining activities through a system of concessions, licences, permits and authorisations, granting mining titles to private companies. There is no requirement for the government to enter into separate mining development agreements beyond these standard licences and permits.

4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Mining rights can be transferred, either partially or entirely, to eligible legal entities or individuals. The current holder must submit a formal request to the ANM with the necessary documentation. The ANM will assess the application to ensure that the transferee meets all legal and technical criteria, such as:

• the transferee's suitability and ability to ensure the continuity of responsible mining practices;
• adequate technical expertise and financial resources to effectively conduct exploration or mining activities;
• compliance with operational and environmental standards; and
• adherence to all existing legal and regulatory obligations associated with the mining rights, including:
• • environmental licensing;
  • safety protocols; and
  • financial responsibilities, such as payment of applicable fees and taxes.

Transactions involving the transfer of such rights may be subject to capital gains tax, depending on the specifics of the transaction.

4.10 Can security be taken over mining rights?

It is possible that security may be taken over mining rights through a general security agreement to finance a mining project. These security agreements must be registered with:

• the local branch of the Deeds and Documents Registry; and
• the ANM.

In March 2022, Resolution 90/2021 came into effect, regulating the use of mineral rights as collateral in financing operations. The resolution stipulates that:

• security guarantees on mining concessions can be established through public or private instruments registered with the ANM; and
• only mining concessions and claim stakes can be used as secured guarantees.

4.11 What provisions apply with regard to closure or abandonment of a mining right?

The regulations aim to ensure the proper rehabilitation and reclamation of mines post-closure, often incorporating provisions for monitoring and maintenance after the mine's operation ceases. The requirements include the submission of:

• a mine closure plan;
• details of environmental restoration efforts;
• details and results of soil and water quality monitoring;
• details of the management of tailings and waste;
• proof of financial capability;
• details of the implementation of safety measures; and
• proof of overall adherence to regulatory standards.

5 Surface rights

5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?

The holder of a mining right is not inherently the owner of the land. Mineral resources and surface ownership are treated as distinct entities. However, holders of exploration permits and mining permits have the right to access land to carry out reconnaissance, exploration or mining activities, as established by:

• the Constitution;
• the Civil Code; and
• the Mining Code.

The Constitution and the Civil Code stipulate that surface and mineral resources are separate properties, with mineral resources being the property of the federal government.

Furthermore, the Constitution emphasises that reconnaissance, exploration and mining activities are of national interest and considered public utility services. If the holder of an exploration permit or mining permit cannot reach agreement with the landowner to access the area, it may file a lawsuit to secure an easement. The likelihood of obtaining a favourable judicial decision in such cases is high.

5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

Where the owner of mining rights seeks to acquire surface rights from a willing landowner, the process involves:

• negotiation;
• due diligence; and
• formalisation under Brazilian law.

This acquisition procedure is the same when involving a non-mining buyer. First, the parties negotiate the purchase price and any specific conditions. The mining rights holder conducts due diligence to ensure that:

• the land is free of encumbrances; and
• the landowner holds a clear title to the property.

Once terms are agreed, a purchase and sale agreement is drafted to detail the conditions of the transaction.

The transfer must be formalised through a public deed of sale executed before a notary, which serves as a legally binding document outlining the agreement. The deed is then registered with the appropriate Real Estate Registry office to officially transfer ownership.

5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).

In Brazil, when a mining rights holder cannot negotiate an agreement with a landowner to access the land, it may seek legal remedies to enforce its rights. Mining activities are deemed of public utility and national interest under the Constitution, which allows for legal mechanisms such as easement.

A lawsuit can be filed by the mining rights holder to obtain a court order granting access. For easements, the landowner retains ownership while the mining rights holder gains access to carry out necessary mining activities. The mining rights holder must:

• provide evidence of prior negotiation attempts; and
• demonstrate the necessity of access for mining operations.

The duration of the process depends on:

• the case's complexity; and
• the court's workload.

In general, it takes a few months and the injunction, which allows the exploration permit or mining permit holder to access the area, is usually granted within a few days, depending on the urgency of the case. Courts generally prioritise such cases, given the public interest in mineral development. Once approved, the mining rights holder can proceed with operations under court-imposed conditions, ensuring both:

• the continuation of mining activities; and
• fair treatment of the landowner.

5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?

Prospecting permits or mining concessions located on Indigenous lands can only be granted with prior authorisation from the National Congress. Furthermore, during the approval process, affected communities must be consulted. If the permit is granted, these communities are entitled to a share of the revenue generated by the mining activities, as established by law. Although the Constitution allows mining on Indigenous lands, specific regulations governing this activity have not yet been enacted. The grant of hand mining permits for projects on Indigenous lands is not permitted.

5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

In Brazil, securing mining rights such as exploration permits and mining permits is only one aspect of the regulatory framework for mining activities:

• Mining companies must also obtain various land use authorisations to comply with environmental, zoning and planning regulations.
• Before commencing operations, environmental licences are mandatory.
• Projects involving water resources require specific permits from water management authorities.
• Mining activities must further align with local zoning laws, and operators may need to obtain land use approvals or variances if activities deviate from existing classifications.
• Before constructing infrastructure such as processing plants or administrative buildings, local construction permits are necessary to ensure compliance with safety and regulatory standards.
• If mining operations are planned within or near Indigenous territories or protected areas, additional consultations and approvals are required to:
• • respect Indigenous rights; and
  • preserve ecological integrity.

6 Environmental issues

6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Conducting mining operations in Brazil requires several environmental authorisations to ensure compliance with environmental regulations. The main environmental authorisations and licences are as follows:

• Licence for exploration activity: This licence is required for the initial exploration phase. It grants permission for sampling and basic surveys.
• Licence for preliminary mining activity: This licence is necessary for the preliminary mining phase, with the use of a preliminary mining permit, and allows the extraction of minerals under certain restrictions and requirements.
• Preliminary licence: This initial licence assesses the project's environmental feasibility, approving its location and design while establishing basic requirements to be met in subsequent phases.
• Installation licence: This is required before any physical installation or construction related to mining activities can commence.
• Operation licence: This is necessary to authorise the full operation of the mining project after it complies with all environmental requirements.

The specific requirements can vary depending on factors such as:

• the type of mineral;
• the scale of the operation; and
• the project's location.

For instance, certain minerals – particularly those classified as radioactive – are regulated by specific laws and may require additional permits.

6.2 What environmental obligations must the operator observe while the mine is operational?

Mining operators must comply with a wide range of environmental responsibilities throughout the operational phase to ensure sustainable practices and minimise environmental harm:

• Strict adherence to the terms set out in the environmental licences is critical, including by:
• • implementing approved mitigation strategies; and
  • following operational guidelines.
• Operators must conduct continuous monitoring of environmental factors such as water and air quality, biodiversity, and noise levels, submitting regular compliance reports to the relevant authorities.
• Effective waste management is essential, including the proper handling, storage and disposal of hazardous materials and tailings to prevent contamination.
• Sustainable water resource management is also mandated, necessitating permits and measures to minimise pollution and safeguard local ecosystems.
• Mining companies must progressively restore disturbed areas, focusing on replanting native vegetation and recreating natural ecosystems.
• Emergency preparedness is crucial, with response plans in place to handle potential incidents such as spills or dam failures, supported by trained staff and adequate resources.
• Biodiversity conservation measures must be implemented, particularly in ecologically sensitive areas, through initiatives such as:
• • buffer zones; and
  • partnerships with conservation entities.

In case of non-compliance, a mining company may be subject to severe penalties, including:

• fines;
• operational shutdowns; and
• reputational harm.

This underscores the importance of strong environmental management systems.

6.3 What environmental obligations must the operator observe in relation to closure of the mine?

Specific regulations govern mine closure planning and requirements, to ensure that mines are adequately rehabilitated and reclaimed after closure. These regulations typically include provisions for post-closure monitoring and maintenance. The main requirements include:

• preparing a mine closure plan;
• managing tailings and waste;
• demonstrating financial capability;
• restoring the environment;
• implementing safety measures;
• monitoring soil and water quality; and
• complying with general regulatory standards.

6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

In case of breach of these requirements, a mining company may face several liabilities and legal consequences. These liabilities can be:

• civil (civil lawsuits seeking damages for harm caused, health issues, loss of income and other related damages);
• environmental (the company may be held responsible for the costs of environmental remediation and restoration of the affected areas, regardless of fault);
• administrative (administrative penalties for violations of environmental regulations);
• criminal (imprisonment, fines and other criminal penalties); and
• regulatory (corrective actions to stop the contamination and mitigate its effects).

Criminally, directors, managers and employees could be held personally liable, facing charges that may result in imprisonment or fines.

6.5 Which bodies are responsible for enforcement of environmental obligations?

Environmental obligations in Brazil are enforced through a collaboration of federal, state and municipal agencies under the National Environment System. The Ministry of the Environment and Climate Change (MMA) leads the development and coordination of environmental policies at the national level. Supporting this effort, the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA) enforces these policies through:

• licensing;
• inspections; and
• the imposition of penalties for violations.

Additionally, the Chico Mendes Institute for Biodiversity Conservation oversees federal conservation units and safeguards biodiversity. Local and state environmental agencies complement these efforts by applying and monitoring environmental laws within their jurisdictions, ensuring comprehensive governance throughout the country.

6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?

Regulatory agencies such as the IBAMA at the federal level, along with state and municipal environmental agencies, are responsible for enforcing compliance with environmental standards. Their approach includes:

• regular inspections;
• monitoring; and
• where necessary, imposing penalties for non-compliance.

Additionally, the National Mining Agency oversees mining activities, ensuring that environmental considerations are integrated into mining operations.

The regulatory framework also emphasises public participation and transparency, requiring that affected communities be consulted during the licensing process. This participatory approach ensures that social and environmental concerns are addressed, aligning with the principles of sustainable development.

Overall, Brazil's regulatory approach to the mining sector from an environmental perspective is characterised by:

• stringent licensing requirements;
• active enforcement by agencies; and
• a commitment to sustainable practices that balances economic development with environmental preservation.

7 Health and safety

7.1 What key health and safety requirements apply to operators in your jurisdiction?

Mine owners must ensure that these regulations are followed and take all precautions to ensure compliance. Managers and supervisors are responsible for:

• complying with such regulations;
• providing training to employees; and
• creating an environment to protect employees.

Employees must:

• participate in all necessary training; and
• report any fact that is not in compliance with the health and safety regulations.

7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?

In Brazil, mining operations are subject to strict health and safety regulations – particularly under Regulatory Standard NR-22, which governs occupational health and safety in mining activities. These standard mandates that all mining-related accidents and incidents be promptly reported to the appropriate authorities. Specifically, employers must notify the Regional Labour Superintendence of any accidents resulting in fatalities or serious injuries. Additionally, the National Mining Agency (ANM) must be informed of incidents that could:

• impact operational safety; or
• cause significant environmental harm.

These reporting obligations are designed to:

• ensure timely intervention;
• facilitate thorough investigations; and
• promote the implementation of preventive measures to enhance workplace safety within the mining sector.

7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

Non-compliance with these requirements can have significant repercussions for mining operators and their directors, managers and employees. Administratively, authorities may:

• issue warnings;
• impose fines; or
• suspend operations until compliance is achieved.

Civil liabilities may also arise, holding companies accountable for damages resulting from accidents and leading to compensation claims from affected parties. In case of severe negligence or intentional misconduct, criminal charges could be brought against individuals in leadership positions, potentially resulting in imprisonment. Operationally, mandatory halts to address safety violations can cause financial losses and project delays.

7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

Mining operators must adhere to comprehensive health and safety protocols to ensure workforce wellbeing and regulatory compliance. One fundamental component is the implementation of a risk management programme that systematically identifies, evaluates and mitigates workplace hazards, thereby fostering a safer working environment. Additionally, the establishment of an internal commission for accident prevention in mining is crucial to:

• ensure continuous safety oversight; and
• cultivate a culture of prevention within the organisation.

Regular and constant training sessions are also essential to keep employees informed about safety protocols and emergency response procedures, ensuring preparedness for potential incidents.

7.5 Which bodies are responsible for enforcement of health and safety obligations?

The enforcement of health and safety regulations in the mining sector is primarily managed by the Ministry of Labour and Employment. Labour inspectors conduct workplace inspections to ensure compliance with occupational safety standards across various industries, including mining. Additionally, the ANM oversees mining operations, ensuring adherence to technical and safety regulations specific to the industry.

7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?

The regulatory approach to health and safety in the mining sector is characterised by stringent standards and proactive enforcement. The regulators collaborate to ensure that mining operations adhere to comprehensive safety protocols. This includes:

• regular inspections;
• risk assessments; and
• the implementation of preventive measures to mitigate workplace hazards.

8 Processing, refining and export

8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?

Mining operators must secure specific licences and permits from environmental authorities at the federal, state and municipal levels prior to initiating processing activities. This typically involves:

• conducting environmental impact assessments; and
• implementing mitigation strategies to address potential adverse effects.

Compliance with the Mining Code and regulations established by the National Mining Agency is mandatory, encompassing:

• technical standards for processing operations; and
• safety protocols.

Additionally, operators must adhere to labour laws and occupational health and safety standards to safeguard workers involved in processing activities. Non-compliance with these requirements can lead to:

• administrative penalties;
• fines; or
• suspension of operations.

8.2 What requirements and restrictions apply to the export of minerals?

In Brazil, mineral exports are generally straightforward, with minimal restrictions. However, certain ores – particularly radioactive materials – are subject to additional regulations and procedures. Exporters benefit from tax exemptions on mineral exports, enhancing the sector's competitiveness in global markets. It is essential for companies to comply with all relevant legal and regulatory requirements to ensure a well-executed export operation.

9 Taxes and royalties

9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?

There are special taxes, fees, and contributions applicable to the mining sector in Brazil. These include:

• the financial compensation for the exploitation of mineral resources (CFEM), which is a financial compensation payable to the government based on the sale of minerals, ranging from 1% to 3.5% of the gross revenue from mineral sales, excluding taxes;
• an export tax, although mineral exports in Brazil are generally exempt from taxation;
• royalties to landowners from ore sales, which require mining companies to pay 50% of the CFEM;
• the mining activities control, monitoring and inspection rate (TFRM) – a fee calculated based on the volume of minerals extracted, which varies by:
• • mineral type; and
  • scale of operations; and
• the annual fee per hectare, charged annually for each hectare of the mining area held by the company.

9.2 Are any tax incentives available for mining operators?

The mining sector does not benefit from industry-specific tax incentives, but mining operators can access general incentives available across various sectors. For instance, approved investment projects may receive total or partial exemptions from import duties on imported equipment, facilitating the acquisition of necessary machinery for mining operations.

State governments may also offer reductions or exemptions from the state value-added tax on the sale of certain minerals and the acquisition of machinery, equipment and inputs, aimed at stimulating economic activity within their jurisdictions. Furthermore, programmes such as the Special Incentive Regime for Infrastructure Development provide for the suspension of Programme of Social Integration (PIS) and Contribution for the Financing of Social Security (COFINS) taxes on acquisitions of machinery, equipment and services for infrastructure projects, which can be applicable to mining operations.

9.3 What other strategies might mining operators consider to mitigate their tax liabilities?

Mining operators can employ several strategies to optimise their tax liabilities. One approach involves selecting the most advantageous tax regime – such as, presumed profit or actual profit – based on the company's size, revenue and operational specifics. Additionally, corporate restructuring – including the establishment of subsidiaries or mergers – can provide access to specific tax benefits, provided that these actions align with legal requirements and business objectives. Engaging in activities such as research and development or investing in infrastructure may also qualify companies for governmental tax incentives. Efficient management of tax credits and deductions, such as leveraging tax credits to offset future tax liabilities, can result in substantial long-term savings. For multinational mining companies, establishing compliant transfer pricing policies ensures that intercompany transactions are conducted at arm's length, minimising the risk of tax adjustments and associated penalties.

9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?

Over the past three years, Brazil's mining sector has experienced significant tax-related developments. In 2021, there were discussions about increasing the CFEM for minerals such as iron, copper, bauxite, gold, manganese, kaolin and nickel. However, this proposal was not enacted and the CFEM rates remained unchanged.

In 2023, Brazil's Chamber of Deputies approved a constitutional amendment introducing a comprehensive tax reform. This reform aims to simplify the tax system by consolidating multiple taxes into a dual value-added tax (VAT) regime:

• replacing the state VAT and the municipal tax on services; and
• introducing the contribution on goods and services in place of federal taxes such as the excise tax on manufactured products and PIS/COFINS contributions.

Despite discussions and legislative movements concerning tax rates applicable to mining companies, no significant changes have been implemented in the past three years. All mining sector players should stay informed about ongoing tax reform processes, as future adjustments may affect the sector.

10 Disputes

10.1 In which forums are mining disputes typically heard in your jurisdiction?

In Brazil, mining disputes are usually resolved through the judicial system, which operates under a civil law framework. The judiciary is divided into federal and state branches, with jurisdiction determined by the nature of the dispute. Matters involving federal interests, as environmental regulations or federal taxes, are addressed in federal courts; while other disputes, including contractual disagreements between private parties, are handled by state courts. Arbitration has become an increasingly popular mechanism for resolving mining disputes, offering a reliable and efficient alternative to traditional litigation, as Brazil is a signatory to the New York Convention, ensuring that arbitration awards are recognised and enforceable in several countries.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Mining disputes often involve:

• environmental concerns;
• land rights;
• regulatory compliance; and
• contractual disagreements.

Environmental issues may include deforestation, water contamination and habitat destruction, leading to conflicts with:

• government agencies;
• non-governmental organisations; and
• local communities.

Land rights disputes frequently arise when mining operations encroach upon Indigenous territories and quilombola (Afro-Brazilian) communities, resulting in conflicts over land use and ownership. Regulatory compliance disputes involve adherence to mining laws, safety standards and licensing requirements, with conflicts emerging from alleged violations or differing interpretations of regulations. Contractual disagreements between mining companies and stakeholders – such as suppliers, employees and joint venture partners – can also lead to legal conflicts over terms, obligations and performance. These disputes are typically resolved through Brazil's judicial system, with jurisdiction determined by the nature of the conflict.

10.3 Have there been any recent cases of note?

In recent years, Brazil's mining sector has been marked by significant legal settlements addressing environmental and social impacts. In October 2024, the Brazilian government finalised a substantial agreement with mining companies BHP and Vale concerning the Mariana dam collapse of 2015. This disaster, recognised as one of the country's most severe environmental catastrophes, resulted in 19 fatalities and extensive ecological damage. The settlement allocates approximately BRL 170 billion over 20 years for reparations, encompassing:

• environmental restoration;
• compensation for affected individuals; and
• infrastructure rehabilitation in the impacted regions.

Similarly, in July 2023, leading petrochemical company Braskem reached a BRL 1.7 billion settlement with the municipality of Maceió. This agreement addresses the geological damages attributed to Braskem's rock salt mining activities, which led to ground subsidence in several neighbourhoods, necessitating the evacuation of thousands of residents. The settlement funds are designated for urban remediation, resident compensation and socio-environmental restoration in the affected areas.

11 Trends and predictions

11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?

Over the past five years, Brazil's mining sector has experienced significant developments, marked by:

• increased investment;
• regulatory reforms; and
• a heightened focus on environmental and social governance (ESG).

Between 2023 and 2027, the mining industry is ready to invest approximately $50.4 billion in Brazil, reflecting the largest investment cycle in a decade. This surge underscores the sector's resilience and growth potential. In relation to the ESG, the mining sector has faced increased scrutiny regarding environmental and social impacts, particularly following incidents such as the Brumadinho and Mariana disasters. Companies are now more actively engaging with local communities and investing in technologies to mitigate environmental degradation, reflecting a shift towards more responsible mining operations. The discovery and development of lithium deposits – especially in regions such as the Jequitinhonha Valley – have positioned Brazil as a significant player in the global supply of critical minerals essential for the energy transition. This development has attracted substantial investments and is reshaping local economies, highlighting Brazil's potential in the evolving global mineral market.

11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Brazilian government has introduced regulatory reforms aimed at improving mining operations and strengthening environmental monitoring. The National Mining Agency has outlined its strategic plan for 2024-2027, with a focus on broadening the mining sector beyond its traditional reliance on iron ore. Moreover, efforts are underway to attract investment through significant revisions to the mining code and reforms within key regulatory bodies. Looking ahead, Brazil is positioning itself to reinforce its role in the global mining industry. The country is actively pursuing the development of a rare earth industry to challenge China's dominance in the supply chain. Brazil – with its competitive labour costs, access to clean energy and solid regulatory framework – is well positioned to succeed in the sector.

12 Tips and traps

12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?

Investors considering Brazil's mining sector should be aware of several key challenges:

• The Brazilian mining industry is characterised by a multifaceted regulatory framework that can lead to prolonged environmental licensing processes. These delays are often due to stringent environmental standards and the necessity for comprehensive assessments, which can impede project timelines. Additionally, recent environmental disasters have resulted in stricter regulations and increased oversight, further complicating the approval process.
• Brazil's tax system is intricate, encompassing various federal, state and municipal taxes that can be challenging to navigate. Ongoing legislative reforms aim to simplify and modernise the tax structure; however, these changes can introduce uncertainty and require businesses to adapt to new compliance requirements.
• The National Mining Agency oversees mining activities in Brazil. However, the agency has faced challenges related to resource limitations and operational inefficiencies, leading to slower processing times for permits and approvals. These delays can affect project timelines and operational planning.

In relation to the top recommendations, please see below:

• Before acquiring mining rights or land associated with mining activities, conduct thorough due diligence. This process should include:
• • evaluating the legal status of mining rights;
  • assessing environmental liabilities; and
  • understanding any social or community issues that may impact on operations.
• Becoming a member of mining associations and institutes offers valuable resources, networking opportunities and insights into industry trends. Active participation can also provide a platform to influence policy developments and stay informed about regulatory changes.
• Engaging legal experts who specialise in mining, corporate, tax and labour law is crucial to the mining operator be protected. They can:
• • provide guidance on regulatory compliance;
  • assist in navigating the complex legal landscape; and
  • help to mitigate potential legal risks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.