Tiago de Mattos

The article written by Dr. Tiago de Mattos was published by CEPMLP – University of Dundee.

See the full article below.


Mining and Law: 8 tips for young attorneys

A few months ago, I travelled through the Black Forest in southwest Germany. This was a magical trip, with impeccable highways, small towns with their traditional architecture and culture, pine trees, rivers, waterfalls, incredible natural scenery and… mining. The apparent paradox between environmental preservation of the forest and mining at this location raised several legal questions about this activity, and indicates the existence of a relevant area of law for young attorneys.

Mining is a fascinating economic activity. Transforming mineral resources into wealth is a difficult, time-consuming and expensive process. The failure rates are extremely high. Profitable mines hide untold failures, which means that mining is essentially a risk activity. Therefore, the law is needed to balance the interests of the State, miners and communities to reduce uncertainties and enable sustainable development of the industry.

The legal basis for mining is found in Article 176 of the Brazilian Constitution. The Mining Code establishes the rules governing the discovery of deposits and development of mines. Related legislation and administrative rules complement the basic normative structure.

Several relationships result from these rules, and these will be the areas in which attorneys work: the regulatory relationship between miners and the State; the relationship between miners and the owners of the land where the deposits are located; the relationship between miners and other miners in the sale and purchase of Mining Titles; the relationship between miners and investors in project financing.

In the private sector, attorneys will work for mining companies, construction companies, landowners, banks and investors. They will provide advice and work in litigation in the courts, and in arbitration. In the public sector, they may join the Office of the General Counsel for the Federal Government at its specialized office at the Ministry of Mines and Energy or DNPM (currently called the National Mining Agency). They may work in the voluntary sector, helping traditional communities in their relations with miners and with international organizations (World Bank, ICMM and EITI) involved in the governance and sustainability of the industry.

Besides the classic advice, which applies to any area of legal work (that is, be patient, resilient and proactive), I would like to also suggest other advice to help develop a gratifying career in the mining industry:

1) Mining, mining, mining

Study the dynamics of the mining industry. Get to know the players in the industry. Understand the economic forces behind the supply and demand for mineral resources. Speak with geologists, mine engineers and economists. Learn how ores are mined. Study the classification of resources and reserves. Visit deposits and mines. Understand the stages of mineral exploration and exploitation. Mix this knowledge together, and you will see the amount of risk involved in this activity. Besides being illustrative, this will be essential for finding useful legal solutions for complex problems.

2) The different areas of law form a whole

I continue to firmly believe that Mining Law is a separate course area. But by itself, it is not sufficient to solve most of the needs of the industry. The division of Law into areas is excellent for teaching purposes, but it is weak in practice. Study Mining Law from the perspectives of Constitutional Law and Administrative Law. Be well-grounded in the bases of the Law of Obligations and go deeper in your study of Contract Law. Take on Environmental Law. Know the foundation of Tax Law and keep your knowledge of Business Law updated. You will be called on to solve matters that arise in the Mining Code, but will be solved in a zone of intersection with other areas. Trust me: finding this area of convergence will be essential for invoicing your fees.

 3) Attorneys do not live by Law alone

Can a cobalt miner mine copper? You will be asked questions like this one. You will have two alternatives: you can either give a short, insecure answer, based on some article in a law that seems appropriate to the case, or you can go deeper and build something that is more consistent. It will be necessary to navigate through the definitions of waste, ore, tailings and byproducts. You will need to know the formation of deposits and the beneficiation route of ores. You must pay attention to mining policy to know the direction of the changes in the government’s positions on this matter. And the best part is that studying these topics can be even more interesting than reading law books.

 4) Calibrate your language

Attention: it is very likely that your legal advice will not be read by an attorney. It may be read by an engineer, a company director, or even a manager with a background in psychology or philosophy. Be clear, concise and objective. Translate legal reasoning into a message that is short and sweet. Technical, economic and managerial decisions will be made, based on your opinion. Therefore, put your learned legalese into plain language.

 5) Be part of a club

Brazil does not have many attorneys who are specialized in the mining industry. You will miss being about to “talk shop” with your peers. You will have to face a certain amount of intellectual loneliness when working on your cases. This is why you should seek out institutions that bring together professionals in this industry: research institutes, professional organizations, law school study groups, industry representation entities and chambers of commerce. You will probably meet people who are just as eager as you are to discuss that clause regarding cost deductions in royalty contracts.

 6) Balance your ideologies

The criticism being leveled at mining today is actually nothing new. People seem to forget that without mining, there is no life, and they fight to end it, or fight for it to be done far from their backyards. Fortunately, or unfortunately for some, this is nothing but wishful thinking. You will also come across people who praise this activity to the point of believing that due to the benefits mining brings, it should be allowed to be conducted in any manner, at any cost. It is important for attorneys to find the point of equilibrium in this us versus them scenario. There are many ways to mine responsibly, and attorneys play an essential role in this construction. Believing in the potential of this activity and overcoming poorly informed criticism will contribute towards forming a collective opinion that is more reasonable. And believe me: a more rational view of mining will attract more investment to it and more work for you.

7) Learn English and broaden your sources

In spite of all the mining tradition in Brazil, there are not enough Brazilian books for the study of legal matters associated with mining. There is no way to get around it: you need to learn English and look for texts by foreign authors. There are several of them in Canada, United Kingdom, Argentina, Chile, United States, Australia, Sweden and South Africa. And the best part: almost everything is available on the internet. Don’t believe it? Copy and paste this link: your browser, type mining in the search box and have fun with the result.

8) Think, ponder, reflect… and write!

This tip is an obvious reflection of the previous one.

If there is room for new texts, write them. Writing is not as easy as it may seem, principally when the subject requires the explanation of several legal positions. However, this is nothing that a good deal of multidisciplinary study (in Portuguese and in English!), debates with other colleagues who are part of this small club, common sense in regard to mining ideologies and a healthy dose of clarity will not resolve.

Warm regards,

Tiago de Mattos Silva

Partner at William Freire Advogados Associados and president of the Brazilian Institute of Mining Law – IBDM , writing from the library of the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), University of Dundee, Scotland

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