Brazilian magazine calms fears

One week after Reuters reported — quoting anonymous high-level Brazilian government and mining industry officials — that Brazil was considering canceling mineral rights that the government deems strategic such as phosphate, potash and rare earth elements, an official denial has been published in the country’s leading trade magazine.

Brasil Mineral reported July 4 that in an exclusive interview with its publication, Claudio Scliar, geology, mining and mineral processing secretary at the Mines and Energy Ministry, said the government has no plans to intervene directly in the mining sector via a state company or to nationalize mineral deposits that might be deemed strategic.

“We want to make it clear that the Brazilian Geological Survey will not begin to prospect for or mine minerals as if it were a state-owned company,” Scliar told the magazine. “We have never considered nationalizing the sector, in the sense of creating (state-owned) companies.”

The Brazilian trade magazine stated in a press release distributed over PRNewswire that what the government is looking at is “changing the existing system in ways that would facilitate the operations of companies wanting to invest in mineral production.”

Specifically, the government “will seek to move from the existing system, under which mineral rights in a specific area are awarded to whoever registers the claim first, to a system whereby interested companies will need to bid for areas at an auction to be conducted by a planned regulatory agency.”

Scliar noted that the new rules would apply to all minerals with the exception of those earmarked for civil construction.

“Until the government’s new proposal is approved there will be a transition phase during which mineral rights will continue to be issued in the current manner, but only after more rigorous analysis,” the magazine said. “’We will not simply carry on stamping and signing [requests]’ Scliar said.”

“Companies that depend on mineral rights to continue existing projects have absolutely no cause to worry,” the magazine said, quoting Scliar: “‘The last thing the government plans on doing is getting in the way of companies that want to produce. But speculation in mineral areas will no longer be tolerated; we want to do away with the culture of trading in mineral rights, and indeed we see this as a way of encouraging investment.’”

According to Scliar, there is an average delay of ten years from the granting of prospecting rights to a request for production rights. He also said that under the government’s proposals, the question of strategic minerals would be addressed by a yet-to-be-created National Minerals Policy Council.”