Brazil signals new mining investment opportunities

Publication | May 2017

Introduction

Brazil’s Ministry of Mines and Energy recently announced two initiatives to attract international investment in the mining sector, including opening a previously reserved area to private exploration and reducing restrictions on foreign ownership of projects along Brazil’s border area. Both initiatives are expected to draw increased international interest in Brazil’s mining sector and echo the message delivered by Minister Fernando Coelho Filho during his trip to Toronto for the Prospectors & Developers Association of Canada’s Convention, that Brazil is committed to seeing its mining sector prosper.

Reserva Nacional de Cobre e Associados - RENCA

Measuring 46,000 square kilometres and situated in the northwest of Brazil (States of Pará and Amapá), the Reserva Nacional de Cobre e Associados (RENCA) is an immense area rich in gold and other minerals. RENCA was created in 1984 and has been closed from private exploration for over 30 years. The decision to extinguish the national reserve has been greeted with great enthusiasm by the private sector which sees the opportunity for largescale greenfield projects.

On March 30, 2017, the government published a first step towards extinguishing RENCA. Our firm continues to monitor new developments in this area with a view to assisting potential bidders in any upcoming auctions.

Border area restrictions on foreign ownership

Further plans to attract greater foreign investment in the mining sector include removing the requirement of majority (51%) Brazilian ownership for projects within 150 kilometres of Brazil’s border. This area accounts for over 25% of the country’s territory and contains various important mineral deposits including gold, iron ore, copper and nickel.

Both initiatives taken together signal a new willingness to attract foreign investment in the mining sector and a hoped for return to exploration activity after a stagnant period following the commodities super cycle.

Norton Rose Fulbright Consultores em Direito Estrangeiro is a foreign legal consultancy based in Rio de Janeiro, Brazil. Our Brazil team practices English, New York and Canadian law and regularly assists foreign investors with their inbound investments to Latin America and the Southern Cone. For more information please contact Andrew Haynes, Richard Sobkiewicz and David McIntyre.


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Contacts

Andrew Haynes

Andrew Haynes

Rio de Janeiro
Richard Sobkiewicz

Richard Sobkiewicz

Rio de Janeiro
David  McIntyre

David McIntyre

Toronto