q&a
the state
Claudio Scliar Secretary for Mines Ministry of Mines and Energy
of play
What are the political motives behind the reforms to the Brazilian mining code proposed by the Ministry of Mines & Energy? The changes the ministry is proposing aim to create a new model for Brazilian mining. The current model is based on the mining code of 1967 and reflects a difficult political and economic period in Brazil’s history. In the last 35 years the country has undergone profound political, social and economic changes which were seen most clearly in a new federal constitution, signed in 1988. It established procedures for the relation between public goods and private interests. We deemed it necessary to develop a new legislative framework for the access, exploitation, supervision and regulation of mineral extraction activities which reflects the current times. What will be the roles of the National Council for Mining Policy and the National Minerals Agency? The National Council of Mining Policy will be an institution presided over by the Ministry of Mines & Energy. Its fundamental role is to subsidize the presidency with regards to the mineral policies necessary for the proper development of this important segment of Brazilian industry. The National Mineral Agency will replace the DNPM and will be the entity responsible for the regulation, supervision and mediation of conflicts in the mineral sector. Does the government believe we are experiencing a super-cycle of commodity prices? Firstly it’s important to clarify that iron ore prices are mainly defined by contracts signed between miners and consumers and not by the stock market, as is the case with many other metals. As such the high price of minerals reflects as much the global economic situation as it does the existence of national demands which require large quantities of raw materials, as is the case in China and many other developing countries, including Brazil. The proposed increase in royalties is a cause of concern. What is your message to these firms with respect to the changes? Royalties cover mining companies which are producing minerals. As such the royalties do not touch those firms which have mineral
POLITICS & ECONOMY
Brazil’s Ministry of Mines and Energy was founded in 1960 with the mandate of providing support through research and policy to the country’s mining industry. As the sector develops, the need to introduce new regulations has become a priority. Claudio Scliar, the current Secretary for Mines, will be part of the team leading reforms of the current mining code, which dates back to 1967. exploration as their principle aim. Brazil needs to improve its legislation in order to overcome delays brought about by different laws governing the CFEM. The government has undertaken studies examining various mining jurisdictions in order to help modernize Brazilian legislature. There will be increases for some minerals and reductions for others - such as minerals for agriculture in order to achieve self-sufficiency in fertilizers. A World Bank study found that acquiring environmental permits in Brazil takes far longer than in most other Latin American countries. Does the government believe this is an issue that needs to be addressed? The global trend is for an increase in environmental restrictions and in this context the Brazilian environmental legislation is one of the most modern, reflecting the concern for sustainable development by taking into account an analysis of the environmental, social and economic impact of the activities that are to be licensed. Many gold exploration juniors operating in Brazil are working in areas with large numbers of garimpeiros. What is the government doing to ensure cordial relations between these groups? In Brazil we have a specific regime designed to improve the activities of “garimpeiros,” We have made efforts to regulate these activities through the Small Scale Mineral Prospectos permit. We have had innumerable cases of success whereby “garimpeiros” and companies have worked side by side, such as in the case of Colossus Minerals with the garimpeiro group COOMIGASP. The Folha de São Paulo newspaper reported that a state-owned company is undertaking mineral exploration activities in the Brazilian offshore region. What are your expectations for these projects? The Ministry of Mines & Energy is responsible for the geological survey of the country, which includes the continental platform in Brazilian and international waters. The CPRM, a body linked to the Ministry has the responsibility to execute these works which are set out in the Accelerated Growth Plan. Mining Leaders
11