On June 18, 2013, the Brazilian Government, through the Ministry of Mines and Energy, released the final proposal of the New Mining Framework. The long-awaited proposal will be submitted to the National Congress via Bill of Law.

The main changes proposed by the Government are:

(i) The creation of the National Council for Mining Policy (CNPM, in Portuguese), in order to assist the President in strategic decisions;

(ii) Concessions will be granted through bidding processes, based on a sole title for exploration and mining with a 40-year term, extendable for 20 years, and with an occupation tax and a minimum investment. According to the Federal Government, such measure should reduce speculation. Mineral aggregates (clay, sand, gravel etc.), mineral water and others are exempted. This is an absolute change in the current regime, more specifically in regard to the Priority Right and to the possible mineral exploration until the end of the mine life;

(iii) The creation of a new agency named the National Mining Agency (ANM, in Portuguese), with greater management and financial autonomy and basing its decisions in collegiate rulings;

(iv) Change (and simplification, according to the Minister of Mines and Energy) in the mining tax (CFEM – Financial Compensation for the Mineral Explorations, the mining royalties), which will be calculated over the gross revenue with a maximum rate of 4%. The distribution of tax revenues among Municipalities (65%), States (23%) and the Federal Union (12%) will remain the same. The Federal Government estimates that annual tax revenues will double.

President Dilma Rousseff and Minister of Mines and Energy Edison Lobão emphasized that the transition rules included in the proposal ensure that investments previously made in the mineral sector under the current regime will be respected.

TozziniFreire, represented by its partner Luiz Fernando Visconti, head of the Mining industry group, attended the official conference held by the Brazilian Presidency when the proposal was launched.

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