Brazil publishes rules for mining project auctions

Brazil’s national mining agency (Agência Nacional de Mineração) has issued Resolution No. 24/2020, setting out the rules for tender proceedings for areas to be made available for mining exploration or exploitation, with the first mining tender under the new regulations scheduled to be launched in March.

The tender proceedings are applicable to areas for which exploration or exploitation rights had already been granted, but which had expired or were terminated, as well as for new projects, according to law firm Pinheiro Neto.

“Resolution No. 24/2020 represents an important step forward towards the generation of new projects and investment opportunities for the mining industry,” the law firm said in an explanatory note.

However, a proposed bill by the government of President Jair Bolsonaro to allow mining projects to be developed on indigenous lands, most of which are in the Amazonian region, has caused controversy both in Brazil and abroad. The bill has yet to be presented to congress. 

While the legislation would allow impacted indigenous populations to be consulted, they would lack the power of veto, except in cases of garimpo or wildcat mining, according to local media reports. The right of consultation on development projects is assured under the International Labour Organisation’s Convention 169, of which Brazil is a signatory.

In the event of more than one bidder expressing interest in a project or block for which rights are made available, an electronic auction will be held, with the successful bidder offering the highest value.

The new regulatory framework is only valid for new tenders. 

The first tender is expected to be for the extraction of minerals for the construction, while the second is expected to be launched in June.