MINERAL EXPLORATION PERMISSION IN BRAZIL

Mining activity in Brazil is defined by Decree-Law 227/1967 and is controlled by DNPM (National Department of Mineral Production).

The mineral exploration process starts with an application for regime of Mineral Exploration Permission, intended to allow mineral exploration considering future use of deposits. It is important to notice that applications may only be made in areas that are previously free of any type of applications and licenses.

According to the Mining Code, the application must have some documents, which includes pre-application, fees, designation of the substances that will be researched, descriptive text of the requested area, situation map with recognition elements such as roads, topography and rivers, research plan including budget and schedule set for their execution and the technical responsibility of geologist or mining engineer responsible for the application.

The application shall be filed in duplicate and delivered to one DNPM office, which will be chronologically numbered and registered with delivery of a receipt with an application number.

Communication between DNPM, holders and those interested is taken by the Federal Official Gazette (Diário Oficial da União).

During the analysis of the documentation filed at DNPM the technician who does the checks may request further explanation on any point not clear publishing a requirement for explanations in the Federal Official Gazette presenting deadline for compliance under penalty of rejection of the application examined.

Once granted the mineral exploration permission, the holder must begin the exploration within thirty days, under penalty of fine and loss of permission. The time available to explore and send the final research report to DNPM varies from two to three years (extendables) depending on the mineral substance being investigated.

In 2010 the number of applications for exploration permission reached 20,982 and the trend is that in 2013 this amount will be exceeded widely, however such amount of applications is much higher than the number of technicians available at DNPM to examine the documentation, thus the delay for the grant of an exploration permission can vary from three months to two years (there are cases where applications with five years have not been analyzed completely.)