Law 14,514/22, published on December 29, 2022, brought in two relevant changes to the mining sector: the possibility of establishing liens on exploration permits and a new set of rules applicable to research, mining, and marketing and sale of substances, ores, and nuclear minerals.

The new law, which was focused on changing the rules regarding the state-owned company Indústrias Nucleares do Brasil S.A. (INB) and the exploration of nuclear minerals and ores, also changed other rules in the mining sector.

Among them is the inclusion of article 92-A into Decree-Law 227/67 (the Mining Code). The new article expressly establishes the possibility of lien and offering as collateral of research authorizations, mining concessions, mineral licensing, mining permission, and the right to continue after the expiration of the research authorization and before the granting of the mining concession.

The offer of mining rights as collateral, a very important issue for the sector, was regulated by the National Mining Agency (ANM) through Resolution ANM 90/21, after a long period in which the subject was regulated only by Opinion JT-05. This opinion, binding on the entire Federal Administration because of its presidential approval, addressed only the possibility of creating a pledge and concluded that the lien would only apply to mining concessions.

As discussed in a prior article, the publication of ANM Resolution 90/21 brought about new possibilities and defined the mechanics for the creation of liens on mining rights as a collateral for the raising of funds by their holders, even without expressly addressing the possibility of lien on permits for research authorization or mining licenses.

With the inclusion of the new article 92-A in the Mining Code, it is expected that the ANM will publish supplementary regulations in order to receive the innovation brought about by the legislative change, which adds legal security to financing transactions in the mining industry and meets a long-standing request of the sector's players.

Changes also affect the nuclear minerals sector

As per the terms of article 1 of Law 4,118/62, the Federal Government has a monopoly on research, mining, enrichment, reprocessing, industrialization, and trade of nuclear minerals and ores and their derivatives, nuclear elements and their compounds, fissile and fertile materials, radioactive substances, and nuclear by-products.

In Brazil, mineral reserves belong to the Federal Government and can only be explored by private entities by means of concessions, licenses, or by the old legal concept of the manifested mine, extinct with the separation of ownership of the soil from that of the subsoil as of the Federal Constitution of 1934, but which remains in our legal system in observance of the principle of vested rights.

The new Law 14,514/22, together with Law 14,222/21, orders that if the holder of a right allowing exploration of mineral reserves identifies the occurrence of nuclear elements (such as, for example, uranium, thorium, plutonium, and others as determined by the competent authority), it must notify the ANM, the new National Authority for Nuclear Safety (ANSN), and the INB, pursuant to article 4 of Law 6,189/74.

INB, in turn, will evaluate the technical and economic feasibility of the nuclear mineral resources and determine how it will be explored, according to the criteria summarized below.

• If the economic potential of the nuclear elements found in the reserve is greater than that of the other substances researched or mined in the same deposit, the exploration of the deposit's resources may only be carried out through a partnership between INB and the company holding the concession (relationship subject to control of the benefits by the INB) or through expropriation of the mining rights by the INB (subject to prior compensation to the holder of the mining right).

• If the economic potential of the nuclear elements found in the reserve is lower than that of the other substances researched or mined in the same deposit, the mining right will be kept with the original holder.

In this case, if the use of the nuclear element is considered technically and economically feasible, the parties shall determine a way to deliver this nuclear element included in the mined ore to the INB according to a rule to be established in a future regulation.

If the benefits of the nuclear elements found are considered technically and economically unfeasible, the mining right holder must dispose of them in accordance with applicable environmental laws.

The new legislation, therefore, does not make clear the possibility that a private entity may freely and individually (without the INB's participation in the production or commercialization chain) explore and commercialize nuclear minerals.

There is, however, a sign that the INB may enter into contracts with private legal entities and remunerate them by means of the right to commercialize ores associated with nuclear ores or minerals, in addition to the right to purchase the product of mining with previously authorized exportation (in a form still to be defined in a future regulation), besides other forms established in a contract between the INB and the private entity.

This possibility is a legislative innovation, which should be further clarified by future regulations and a market practice to be developed.

There is also no clarity on the type of arrangement that can or should be established between the mineral rights holders and the INB for production and commercialization.

Considering that future laws are expected to regulate how the INB will receive elements intrinsic to the ores extracted by private entities, possibly new rules on the subject will be created so that the state-owned company can negotiate certain arrangements with private entities to allow greater participation in the production and commercialization of nuclear ores.

For more information, see the Mining Industry team and Machado Meyer's Banking, Insurance and Finance practice.