Comparative Mining Law series. Brazil and Australia in ten topics

Comparative Mining Law series. Brazil and Australia in ten topics

Year I, Number 01. March 2020.

William Freire

Foreword

Anyone that really wants to thoroughly understand Mining Law needs to go beyond studying the Mining Code and related regulations.

It’s necessary to also study Comparative Mining Law and at least the basics of Mineral Policies.

If lawyers or students focus their analyses and studies only on the Mining Code, they will be unable to move on to a global view of the Mining Law framework — its origin, its complexity and, even its beauty.

Sources for this study

In order to prepare this paper comparing the Brazilian and the Australian Mining Law framework, the main sources of research used were:

The Brazilian Federal Constitution and the Brazilian Mining Code.

Australian Mining Codes from different states.

FREIRE, William — from WILLIAM FREIRE Advogados. International Comparative Legal Guides. London: Global Legal Group Limited. 2020. Chapter 8. Brazil, p. 36.

FREIRE, William — from WILLIAM FREIRE Advogados. The Mining Law Review. 6th edition. Editor Erik Richer La Flèche. London: Law Business Research Ltd. 2017. Chapter 2. Brazil, p. 14.

LEARY, Jay; KERRIGAN, Geoff — from Herbert, Smith, Freehills. International Comparative Legal Guides. London: Global Legal Group Limited. 2020. Chapter 7. Australia, p. 28.

LEARY, Jay; KERRIGAN, Geoff — from Herbert, Smith, Freehills. The Mining Law Review. 8th edition. Editor Erik Richer La Flèche. London: Law Business Research Ltd. 2019. Chapter 2. Australia, p. 13.

Introduction

The study of mineral activity regulation encompasses many aspects and branches of the law: Constitutional Law and legal principles, administrative procedures, environmental Law applied to mining, mining in the sea regulation, structure of the mining public administration etc.

There’s no doubt that the most important aspect related to Comparative Mining Law is the core of the Mining Law regulation.

To justify the preceding affirmation, we note that for the comparative Mining Law study, it makes no difference if an Exploration Permit in one country is granted for 3 years, and in the other, it is granted for 5 years; if the deadline to file the administrative appeal is 10 days in one country and 30 days in the other.

Considering that the States and Territories in Australia have legislative and administrative powers, some minor differences in theirs mining Law framework must exist.

The core of the Mining Law framework in Brazil and Australia

i. Brazil – The Brazilian Federal Constitution provides that all mineral resources belong to the Union (Government at the federal level). In fact, the Constitution does not establish a typical property relationship between mineral resources and the Union. It’s said that the correct interpretation leads towards the conclusion that this is a typical legal relationship of sovereignty over the mineral resources, not a classical property relationship.

Australia – All titles to minerals are vested in the state or territory in which they are located.

ii. Brazil – The federal government has exclusive legislative power over geology and mineral resources. Despite this, any mineral enterprise must also comply with different regulations that go beyond the Mining Code: Tax, environment (federal, state and municipal legislative competence), foreign investments, labor laws etc.

Australia – Each state or territory has its own mining laws and regulations.

Nevertheless, the implementation of a mining project depends upon compliance with a range of Commonwealth laws, such as environmental, employment, foreign ownership and native title.

iii. Brazil – All mining titles are granted by the National Mining Agency or by the Ministry of Mines and Energy, both acting at federal level. The states and municipalities don’t have any power relating to granting or inspecting mining titles (except cases related to environmental matters).

The National Mining Agency has the primary responsibility for the day-to-day administration and enforcement of the mining laws and regulation.

Australia -The government of each State or Territory has the power to grant and administer all mining titles.

The departments of the public service in each State or Territory have the primary responsibility for the administration and enforcement of the mining laws and respective regulation.

iv. Australia – All mineral regimes have two different stages in common: exploration and development (mining).

In some states there is a third retention stage, “which allows a tenement holder to retain rights over a prospective area after a discovery until commercial production ins feasible.”

Brazil – The main mineral regime (exploration-exploitation) has two stages: exploration and development.

There are two regimes that allow the exploitation without previous exploratory work: Permissão de Lavra Garimpeira and Licenciamento Mineral.

v. Brazil and Australia – Right of priority. The mineral legal framework provides that whoever applies for a mining title first has the exclusive right to develop the mining activity.

vi. Brazil – The exploration-exploitation regime requires an exploration permit (“exploration authorization”), granted for a limited period.

Australia – In most States, there are (a) rights to prospect (prospect permits or prospect licenses), granting the mining title holder the right to carry out small-scale exploration; (b) exploration licenses for large-scale exploration activities.

The need for partial surrendering and relinquishment during the exploration permit period is common in Australia. The same is not usual in Brazil.

vii. In Brazil, concerning the exploration-exploitation regime, the mining title is an exploitation permit (“mining concession”).

In Australia, “a mining lease is required to conduct development and commercial extraction operations and disposal of minerals from the tenement area.”

In Brazil, exploitation permits are granted for an unspecified period; therefore, they are valid until the deposit is depleted.

In Australia, most of the states grant the mining lease for limited periods (e.g. Western Australia, 21 years). In Queensland, the mining lease period is determined by the mine life.

viii. In Australia and in Brazil, the mining title holder has the right to enter a third party’s land, under prior arrangement for fair compensation.

If the private agreement is not possible, the court will define the fair value.

In Brazil there is the possibility of expropriation for mining purposes. In Australia, expropriation on behalf of private mining purposes is not possible.

ix. In Brazil (e.g. CPRM, CBPM, CODEMGE) and in Australia, “Federal and State authorities (e.g. Geoscience Australia) carry out publicly funded geophysical surveys, which are intended to help identify new areas for private mineral exploration.”

x. Brief notes on what is happening in Australia concerning the mining industry, according to Jay Leary and Geoff Carrigan. You can compare this with Brazil for yourself:

a) “Government policies at all levels aim to provide a relatively well-defined system of laws and procedures governing the development of mining projects and a proactive foreign investment regime;

b) In 2019, the Federal Government released a National Resources Statement outlining its policy approach […] including enhancing Australia’s competitiveness in the resources sector and opening up new industries and resources regions;

c) In 2019, the Productivity Commission announced that it would carry out a year-long inquiry […] with the view to streamlining approvals and reducing the regulatory burden on business in the mining sector;

d) The issue of carbon emissions has brought concerns and increased in prominence (mainly in Western Australia and New South Wales).

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