It was published on the Official Gazette on December 19th, 2014, the Ordinance no. 541/2014, issued by the Head Director of the National Department of Mineral Production (DNPM). The new Ordinance establishes several new proceedings to be adopted by the mining companies before Brazilian Authorities, and changes several previous regulations, such as assignment of mining rights, issuance of permits for temporary extraction (Guia de Utilização – "GU") and the clearance of encumbered areas available for new miners, among others. The Ordinance will be enforceable on February 2nd, 2015 and will be valid for the proceedings already ongoing before DNPM, in accordance to their stages.
One of the main changes is related to the requirements for assignment of mining rights. From February on, the approval and annotation of the assignment before DNPM will be conditioned to the non-existence of outstanding debts inscription in regard to the Financial Compensation for Exploitating Mineral Resources (Compensação Financeira pela Exploração de Recursos Minerais – "CFEM").
On the other hand, if an installment program was initiated for the Annual Fee per Hectare (Taxa Anual por Hectare – "TAH"), this will not be a condition anymore for the denial of the assignment of mining rights. If there are TAH debts pending, the assignee can provide a debts assumption agreement, which will allow the assignment.
The issuance of GUs for temporary extraction of mineral substances before the mining concession is ruled was also subject of major changes. Besides the payment of a tax of BRL 5,000 (five thousand Brazilian Reais) by the miner, the DNPM will not issue new GUs in the case of (i) need of mineral substance supply on the market; and (ii) to finance the mineral research. Instead, the GU should be issued according to the public policies, on DNPM's sole discretion.
Furthermore, the GU will lose its effects after 60 (sixty) days of its expiry date, even if an extension was requested by the miner and DNPM has not analyzed such request.
From February on the mining concession will also be conditioned to the filing of the proper environmental licenses, beyond the requirements already set forth on article 38 of the Brazilian Mining Code.
Moreover, the new Ordinance determines which way the mining companies should prove the mining operation funds availability, obligation set forth on item VII of article 38 of the Brazilian Mining Code. In addition to a certificate issued by the banks, the miner can prove its funds availability by any other means, such as proof of machinery and equipment ownership, and also by balance sheets.
In addition, the processing of the requirement for mining exploration regime change was also ruled by the new Ordinance, either from licensing regime to small scale mining regime, or from small scale mining regime to licensing regime.
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