Recent developments in Brazilian mining regulations – licensing, tailings dams and mine closures

Tuesday 21 September 2021

Roberta Danelon Leonhardt
Machado Meyer Sendacz and Opice Advogados, São Paulo

Liliam Fernanda Yoshikawa
Machado Meyer Sendacz and Opice Advogados, São Paulo

Carolina de Almeida Castelo Branco
Machado Meyer Sendacz and Opice Advogados, São Paulo

Camila de Carli Rosellini
Machado Meyer Sendacz and Opice Advogados, São Paulo

Like other infrastructure segments, the Brazilian mining sector has undergone important regulatory changes not only to gain a more dynamic perspective, increase the legal security of minerals and attract investments in Brazilian mining, but also to correct certain gaps related to mining practices and social and environmental concerns that have for too long been dormant.

In 2018, through the publication of Decree No 9,406/2018, the mining code reform brought in stricter environmental rules on the obligation to close mines and recover degraded areas, tightened the rules for counting the term of duration of mineral exploration authorisations and limited the cases for extension thereof, encouraged the economic use of tailings and mining waste and systematised the electronic auctions to make areas available.

More recently, during the Covid-19 pandemic the Mining and Development Programme (PMD) was launched by the federal government seeking to define the next three-year agenda for the revitalisation of the mining sector and the Mining Plan presented by the Joint Committee of the National Mining Agency (ANM), a body linked to the Ministry of Mines and Energy (MME). It proposed revisions of various of the ANM’s resolutions and ordinances with the objective of reducing the bureaucracy in mineral legislation and improving the business environment, including in response to the damage caused to the mineral sector by the pandemic.

In 2020, Federal Law No 14,066/2020 was enacted with the goal of improving parameters for the safety of tailings dams, due regulation, control, inspection, monitoring and responsibilities of entrepreneurs and operators. It updated the existing legislation on safety of tailings dams to the growing social and environmental concerns, mainly amending the National Dam Safety Policy with a focus on disaster prevention, new technologies and global trends to optimise the use of deposits.

As part of the PMD agenda, ANM Resolution No 32/2020 changed the domestic rules for the inspection and safety of dams, modifying the guidelines for preparation of the flood map and the deadlines for presenting the map based on the potential associated damage (DPA) of each tailings dam and risk assessment criteria, among other measures to progressively improve the inspection and safety of mining dams.

In September 2020, the ANM also started the process of making areas available, offering 502 units that were in the exploration application or authorisation phase. In December2020 the second round offered 7,027 areas, 69 per cent of which were for mineral exploration purposes and the others for mining concessions. The final third round in March 2021 offered a total of 2,762 areas, of which 2,663 were in the authorisation phase and 99 were in the mining concession phase.

In addition to the foregoing, ANM Resolution No 68/2021 issued in April 2021 was comprised of rules to standardise and regulate the set of procedures necessary for the monitoring of mine closure plans (PFM) throughout the life of the mine, as well incorporated new rules for the decommissioning process of mining ventures and post use of such areas.

Despite the fact that most of the ‘new rules’ are in fact well known in other jurisdictions, the Brazilian regulatory framework had lacked necessary specific rules. As such, every mining venture, whether in operation or with its activities to be initiated or suspended, must present a PFM prepared by a legally qualified professional and accompanied by the respective Technical Responsibility Note (ART). The elements that must necessarily make up the MPF to be submitted to the ANM vary according to the life phase of the mine and the start of its activities. In the case of projects containing mining tailings dams, the PFM should have, as a mandatory element, the tailings dam decommissioning plan or other technical solution with the objective of reducing the Associated Potential Damage (DPA)[1] to each existing tailings dam.

These measures shall be complied with within certain deadlines that vary from 12 months, as of the publication of ANM Resolution No 68/2021, up to 24 months from 1 June 2021, when the new rules entered into force.

In the event that it is not possible to decommission the tailings dam, the PFM should provide for its proper monitoring to avoid potential accidents. In such cases, for the preparation of the PFM, the professional responsible for the plan must be legally qualified to provide services related to tailings dams and present the respective ART.

Considering that mining activity itself and the consequent useful life of a mine are subject to variations that depend on various economic and climatic factors, the PFM should also be updated to be consistent with such changes. In this sense, the PFM should be updated every five years or at the time of updating the Economic Recovery Plan (PAE), whichever occurs first. An exception is made in the case of ventures with mining assets with a term of duration of less than five years and/or with the expected closure of mining activities of less than two years. In the latter case, it is mandatory to prove the execution of the PFM.

In addition to the elements aforementioned for each case, depending on the life phase of the mine, PFM updates should include a description of the closing actions of the areas that may be closed throughout the operation (in the case of progressive closure) and an updated planialtimetric survey of the areas and structures that make up the enterprise. Such updates must be reported to the ANM within the deadlines set out and be available at the mine in the event of inspections.

The latest PFM update should be communicated to the ANM at least two years before the expected mining closure and, in the event that it takes place before exhaustion, the updated PFM should also be presented. In the same sense, waiver of the mining title may only be approved after approval by the ANM of the final report of implementation of the PFM.

The set of new laws and resolutions described reinforces the increase in rigour in the standards and best practices commonly adopted by mining entrepreneurs and operators towards the protection of health and public safety in mining activities and the need for adequate planning of the closure of mining structures, through monitoring of the life of mines and their decommissioning.

The ANM has also recently issued ANM Resolution No 71/2021 to govern the signing of technical cooperation agreements amongst the ANM, the states and municipalities aiming to, among other goals, be more effective in monitoring, supervision and inspection of mining activities and imposition of penalties for entrepreneurs and operators who do not follow the applicable safety guidelines. As such, ANM Resolution No 71/2021 also provides that those agreements could comprise rules for the collection of the Financial Compensation for Mineral Exploitation (CFEM), known as the Brazilian mining royalties. Requests for entering into technical cooperation agreements with the ANM must be submitted electronically.

Under an environmental perspective, since February 2021, state authorities have also aimed at perfecting the mining projects licensing and inspection processes. For instance, the state of Minas Gerais, where two of the most impactful mining dam accidents took place in 2015 and 2019, as an attempt to respond to those events, has also issued new state laws seeking to strengthen the rigour in the safety of dams in Minas Gerais territory, in the means of supervision and in the penalties applied to entrepreneurs who possess dams, especially those built by the upstream method. First, the government of Minas Gerais published State Law No 23,291/2021, which instituted the State Dam Safety Policy (PESB) and related state decrees. According to the PESB, all dams in Minas Gerais built by the upstream method should be decommissioned by February 2022, following specific steps and criteria for this process, which involve structural safety factors, protocols to reduce the impacts resulting from disruption during the decommissioning works and plans to mitigate environmental impacts caused by these works.

Second, in the same period, the government of Minas Gerais published State Law No 23,795/2021, which instituted the State Policy for Persons Affected by Dams in Minas Gerais (PEAB), which entered into full force to establish important requirements in local legislation regarding dams, especially by making it mandatory for the state to provide assistance to those affected by dams before, during and after the installation and maintenance of these structures, including at the time of deactivation or decommissioning.

Last January and February, the government of Minas Gerais published the aforementioned sequence of state decrees, No 48,133/2021 and 48,140/2021. The first decree had the objective of changing the procedures for the analysis and approval of the Emergency Action Plan (PAE);[2] the second decree regulated the State Dam Safety Policy (PESB), particularly for entrepreneurs who have dams in Minas Gerais subject to risk classification, inspection and monitoring by the State System of Environment and Water Resources (SISEMA) pending any decommissioning.

As a result of the state decrees, especially the latter one, it is expected that mining entrepreneurs will have standard mechanisms for classification of dams by risk category and associated potential environmental damage, be able to identify the stages of the decommissioning of dams originally constructed in observation of the upstream method,[3] provide more updated information to authorities on the volume of the reservoir, characteristics of the material disposed of and monitoring of water and soil quality and be able to work on mitigating emergency interventions to reduce or eliminate serious risk to human lives and the environment.

Minas Gerais State Decree No 48,140/2021 also set forth rules on classification of mining dams based on information provided by the entrepreneurs. The classification of risk takes as a basis the category of risk and associated environmental damage potential, considering the physical aspects of the structure (which may influence the possibility of accidents), the potential for loss of human lives and economic, social and environmental impacts resulting from its potential rupture (existence of community in the flood zone, service and urban infrastructure, water sources or water reservoirs, etc), and the storage capacity of the reservoir, according to the standards of the State Environmental Policy Council (COPAM).  Should the entrepreneur not present the information necessary for the proper risk assessment and classification of the mining dam or fail to present a technical justification considered valid by the State Environmental Foundation (FEAM), the maximum risk score will be assigned.

A third state decree related to socioeconomic aspects of State Law No 23,795/2021 and the PEAB is expected to be issued this year.

From a joint analysis of the federal and state standards mentioned by the aforementioned framework, one perceives an effort for integration of the existing regulatory framework of mining and environmental authorities pursuing the development of more conscious and responsible mining entrepreneurs and operators.

Despite the restrictiveness of these new rules, they seem to be motivated by the attempt of the executive branches and mainly the Minas Gerais state to respond to the events that occurred in recent years in Minas Gerais involving mining dams in a segment that was used to being scarcely regulated. It is also expected that the new framework will be implemented fairly by the competent authorities and result in the awareness that these measures will result in effective gains for investors and society by reducing the risks of future environmental, human and economic losses for all persons involved or somehow impacted by mining activities.


[1] According to the definition in Federal Law No 14,066/2020, which amends the National Dam Safety Policy: ‘Damage that can occur due to disruption, leakage, infiltration into the ground or malfunction of a dam, regardless of its probability of occurrence, to be graduated according to the loss of human lives and social, economic and environmental impacts.’

[2] The obligation to prepare and approve the PAE by the competent state agency was established in Art 9 of State Law No 23,291/2019, which instituted the State Dam Safety Policy.

[3] The upstream method is a dam construction method  in which the tailings or sediment resulting from mining works creates a relatively flat downstream side and a jagged upstream side, therefore supported by tailings slurry in the impoundment. In other words, they are constructed by means of trapezoidal embankments on top and toe to crest of another, having the crest farther upstream. ​​​​​​​