What are the main risks that affect Brazilian mining today?

What are the main risks that affect Brazilian mining today?

Market risks? Technological? Legal? Environmental? Social? 

For us in the industry, the biggest risk remains regulatory.

The House of Representatives created on the last day 18/11, another CPI, that of the Oil Spill, to investigate the origin of the oil stains that hit the beaches of the Northeast and Espírito Santo. Proposed by Congressman João Campos(PSB-PE), obtained the support of 267 parliamentarians, the CPI of oil spill has already received the endorsement of the President of the House of Representatives, Rodrigo Maia (DEM-RJ), and will be read in plenary in the coming days, so that party leaders indicate the members of the collegiate.

Will this be the same as that of Brumadinho?

I believe that there is a reflection here on the creation of another CPI on an environmental disaster in Brazil, the second this year after Brumadinho (CEXBRUMA).

Almost 9 months after the tragedy in Brumadinho, what are the concrete results presented by CEXBRUMA?

The relevant work of members brought conclusions on the investigation of criminal responsibility for the disruption of the dam in relation to Vale S.A. and TUV SÜD. Recommended reparation and compensation measures were adopted, and suggestions for improving legislation, supervision, monitoring and indictments, for crimes of corporate corruption, among other points.

However, in factual terms, a dozen new Bills were generated, and others without number of Bills were resurrected, involving mining that mostly only:

  1. The process is too bureaucratized, with a risk of even preventing much of the mineral activity in the country that has almost 10,000 mines in operation;
  2. They intensified the competency dispute between the Federal and State Governments, for the right to license, supervise, and especially to raise about the activity;
  3. Increase the tax burden (CFEM) on mining activity with the excuse, for the people, that it is intended to charge an inspection of those who practice the activity, forgetting that this sector collects more than R $ 3Bi per year with CFEM, and approximately R$700M in fees, when of this total, LESS than R$ 300M return to ANM, to be used in improvements of the Agency.

In fact, there are two terrible accidents, but that cannot be used as a justification for guiding and regulating all mining activity, which today is already subject to a number of excessively high regulations and licensing times (over 3 years), when they should focus precisely on providing resources to agencies, regulators, licensors and supervisors.

The conclusion of the Brumadinho CPI was undoubtedly important, but we are far from achieving the objectives to which it should be proposed, which would be, in addition to monitoring investigations related to the breakup in Brumadinho itself, to “improve the monitoring of conduct and installation of dams, and inspection of existing dams in Brazil.”

The 2,287-page report can be used as a justification for the above-mentioned bills, and the way they are drafted, will certainly face, hinder, and reduce mineral activity, thereby reducing the collection and jobs generated by the increasing our mineral dependence, and unbalancing our trade balance, making it increasingly dependent on Iron Ore and large mines, which therefore bring the large dams!

We have not identified any proposals that encourage the technological development of monitoring techniques, improving the knowledge of dam construction, etc.

The CPI tends to act with a purely preservationist view, missing the opportunity to create innovative policies, and act in regulating the conduct of organizations at the beginning of the process.

The duty of the Executive, the Judiciary, and the ANM yes, would be to act in its effects.

We would like our Legislative Power, through its illustrious representatives, to have consulted the mineral sector, and built a more responsible and sustainable mining proposal.

Now we can expect the House of Representatives to take the opportunity to actually consult the Oil and Gas industry, to build a way to avoid disasters, encourage the creation of knowledge and means of prevention and monitoring of them, and not only retaliation or remediation thereof.

Let’s hope we don’t repeat the dose in this CPI of oil spill, further restricting maritime oil activity, overtaxing the sector, and who knows even the flow of ships, reducing and further increasing, our port competitiveness, and traffic maritime, and perhaps with this, affecting the logistics of working with pre-salt oil where it is, that is, at the bottom of the sea.

It’s worth rescuing, which said Opec founder Sheik Ahmed Zaki Yamani and applying it to the mineral sector!

 “The Stone Age is not over a lack of stones, and the Petroleum Age will end long before the world runs out of oil.”

It is therefore up to us Brazilians to decide whether we will discuss how to reconcile the extraction of ores and oil on serious and sustainable bases, without focusing on particular interests, because otherwise we will be exclusively preservative, and perhaps even, led by a political dispute, but in the end giving up the conscious exploitation of national natural resources, which can be a passport for a better life, with quality education, more health and more jobs for Brazilians.

I want to believe that it is time for common sense and reason to prosper, and I hope we don’t waste so much time in a CPI with no practical effect, that it may only target the next elections.

LUIS MAURÍCIO AZEVEDO (OAB 80412 RJ)

ABPM’s PRESIDENT – ASSOCIAÇÃO BRASILEIRA DE EMPRESAS DE PESQUISA MINERAL.

PARTNER OF FFA LEGAL, OFFICE SPECIALIZED IN LEGAL, ACCOUNTING-TAX AND ADMINISTRATIVE ASSISTANCE, FOR COMPANIES IN THE MINING SECTOR.

 

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