Brazil unveils new mining regulation bill

BRASILIA - Brazilian President Dilma Rousseff Tuesday unveiled a new mining regulation bill that outlines how royalties will be distributed.

The bill calls for metals-producing municipalities to receive 65 percent of the royalties derived from precious metal extraction, while states receive 23 percent and the federal government, 12 percent. It was scheduled to be submitted to congress for approval before going into effect.

During the presentation of the bill, Rousseff said the new regulation aims to promote competitiveness in the sector and generate greater benefits for the public.

"With this new mining framework, we are creating the conditions to transform the research, exploitation and marketing of mineral resources into a more efficient, profitable and competitive undertaking," said Rousseff.

Brazil's head of state stressed concessions will from now on be granted through public bidding to promote competition among interested companies.

Edison Lobao, minister of Mines and Energy, said the new mining bill marks "a historic moment" for Brazil.

Rousseff added the new regulation "satisfies an inevitable demand of our times" for greater competition, "and a new and long horizon for one of the fundamental sectors of Brazilian life."

"Despite its vast territory and immense mineral wealth, Brazil takes little advantage of (its mineral resources) and the sector's 4 percent of the GDP proves that," Rousseff said.

The bill calls for setting up a new National Council for Mineral Policy and a cap on royalties of 4 percent.

Operating companies will be obliged to make a minimum investment in the concession areas, and the access will be simplified to give "the chain the necessary drive."

Lobao stressed the government will have "total respect" for the contracts, and there will be clear rules for mining sector agents.