《钱伯斯:2023矿业全球实务指南(英文版)(17页).pdf》由会员分享,可在线阅读,更多相关《钱伯斯:2023矿业全球实务指南(英文版)(17页).pdf(17页珍藏版)》请在三个皮匠报告上搜索。
1、CHAMBERS GLOBAL PRACTICE GUIDESMining 2023Definitive global law guides offering comparative analysis from top-ranked lawyersBrazil:Law&Practice Carlos Vilhena and Marina Bertucci Ferreira Pinheiro Neto AdvogadosBRAZIL2CHAMBERS.COMLaw and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferr
2、eira Pinheiro Neto Advogados see p.15BrazilColombiaEcuadorPeruBoliviaChileArgentinaParaguayBrasiliaRio de JeneiroSo PauloContents1.Mining Law:General Framework p.31.1 Main Features of the Mining Industry p.31.2 Legal System and Sources of Mining Law p.51.3 Ownership of Mineral Resources p.51.4 Role
3、of the State in Mining Law and Regulations p.61.5 Nature of Mineral Rights p.61.6 Granting of Mineral Rights p.61.7 Mining:Security of Tenure p.62.Impact of Environmental Protection and Community Relations on Mining Projects p.72.1 Environmental Protection and Licensing of Mining Projects p.72.2 Imp
4、act of Environmentally Protected Areas on Mining p.82.3 Impact of Community Relations on Mining Projects p.82.4 Prior and Informed Consultation on Mining Projects p.82.5 Impact of Specially Protected Communities on Mining Projects p.92.6 Community Development Agreement for Mining Projects p.92.7 Env
5、ironmental,Social and Governance(ESG)Guidelines and Regulations p.92.8 Good and Bad Examples of Community Relations/Consultation Impacting Mining Projects p.93.Climate Change,Energy Transition and Sustainable Development in Mining p.103.1 ClimateChangeEffectsp.103.2 Climate Change Legislation and Pr
6、oposals RelatedtoMiningp.103.3 Sustainable Development Initiatives Related to Miningp.103.4 Energy-TransitionMineralsp.104.Taxation of Mining and Exploration p.104.1 Mining and Exploration Duties,Royalties and Taxesp.104.2 Tax Incentives for Mining Investors and Projects p.124.3 Transfer Tax and Cap
7、ital Gains on the Sale of Mining Projects p.125.Mining Investment and Finance p.125.1 Attracting Investment for Mining p.125.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors p.135.3 International Treaties Related to Exploration and Mining p.135.4 Sources of Finan
8、ce for Exploration,Development and Mining p.135.5 Role of Domestic and International Securities Markets in the Financing of Exploration,Development and Mining p.135.6 Security Over Mining Tenements and Related Assets p.146.Mining:Outlook and Trends p.146.1 Two-Year Forecast for the Mining Sector p.1
9、4BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 3CHAMBERS.COM1.Mining Law:General Framework1.1 Main Features of the Mining IndustryThe mining sector plays an important role in the Brazilian economy.Throughout the first three quarters of 2022
10、,the mining sector accounted for USD32.62 billion in exports(free on board,or FOB).The 2022 numbers did not match the record exports in 2021.Nevertheless,the mining sector accounted for 12.86%of the total Brazil-ian exports in the first nine months of 2022.Iron ore was the most exported mineral subs
11、tance,although the revenues from sales to foreign countries have dropped around 30%in 2022.One of the main reasons behind this retreat may be the reduction of industrial activity in China due to lockdowns related to the COVID-19 pan-demic.The National Mining Agency(ANM)has pro-gressed with regulator
12、y efforts to improve trans-parency and governance standards in the Brazil-ian mining business environment,adding greater certainty to business.ANM InitiativesThe administrative model introduced in 2018 with the creation of ANM is being consistently developed,with the aim of increasing transpar-ency
13、and legal certainty in the mining sector.ANM has repeatedly organised public consul-tations to discuss regulatory changes with the mining sector and allowed participation of inter-est parties in meetings of its board of directors.In the course of 2022,ANM also put in place the regulatory framework f
14、or matters such as(i)reporting of resources and reserves accord-ing to international standards,(ii)tailings dams safety,(iii)liens on mineral rights,(iv)administra-tive sanctions,and(v)aerial survey.The regula-tions enacted over the past few years indicate the development of the administrative model
15、 towards the best regulatory practices.Regulations regarding administrative sanctions and liens on mineral rights should be revised soon by ANM.A public consultation has been launched to obtain contributions from the min-ing sector regarding the recently enacted regula-tions on sanctions,in line wit
16、h ANMs transpar-ency and participation principles.The resolution about liens on mineral rights is also expected to be revised,as a newly enacted amendment to the Mining Code has expressly allowed the granting of mineral rights in all stages,including exploration,to be granted as security in financia
17、l operations.Public Offer of AreasThe public offer applies to areas that had been previously subject to exploration or exploita-tion rights that for some reason expired or were terminated.As a consequence,some geologi-cal knowledge regarding such areas presum-ably exists.The public offer procedure d
18、oes not extend to areas deemed as free,which will remain subject to the first-come,first-served system.The regulations establish a two-stage process:first,bidders should formalise their interest in an area or block of areas;then,an auction is held among them(if more than one)for the highest offered
19、value.At the second stage of public tenders,neither the identity and number of bidders nor the bid offers are disclosed until the area is awarded.In practical terms,bidders do not know with whom they are competing(speculators,junior explora-tion companies,local mining companies,global major producer
20、s,to name a few)and,hence,how the market is pricing each area.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 4CHAMBERS.COMThe entire process is online,through an electron-ic system put in place by the ANM exclusively for the purposes of the
21、public offers.The regulations regarding public offers were an important step forward towards the generation of new projects and investment opportunities in the mining industry.The tenders concluded thus far have been extremely successful for both the regulator and the industry,generating seven times
22、 more applications than under the previous procedure,in equivalent timeframes.In the first five tenders released by ANM,there was an average of 47%of areas being awarded(whether at the first stage or after an auction),totalling 10,591,742.37 hectares throughout Bra-zil.There are still a high number
23、of areas ready for tender,and the government has apparently realised the public offer of areas is a convenient source of revenue in lieu of increasing taxes on the mining sector.Exploration and mining companies have wel-comed the opportunity of securing title to explore or mine areas of interest tha
24、t had been unavailable for years.Companies established in Brazil are lobbying with the ANM to add other areas of interest to coming tender rounds,while foreign prospective investors are reviewing the governments portfolio of 60,000-plus areas that are ready for tender,seeking for opportunities to en
25、ter Brazil.International Collaboration InitiativeThe ANM entered into an international collabo-ration initiative with the OECD in 2020 aimed at identifying regulatory barriers and inefficiencies that affected the dynamics of the mining sector in Brazil,and proposing improvements to the regulatory fr
26、amework for the mining sector.A final report on the collaboration effort was deliv-ered by the OECD in early 2022,with the follow-ing main recommendations:improvement of regulatory consistency between the federal and state rules on the environmental impact of tailings dams;risk-based approach to sma
27、ll-scale and arti-sanal miners;employee participation and exchange of knowledge across ANMs departments;data-based regulatory decisions;financial independence of ANM;promotion of stakeholder participation in ANMs activities;and administrative simplification.Federal ProgrammesThe new government,inaug
28、urated in January 2023,has criticised measures taken by the pre-vious administration aiming to promote greater institutional articulation between mining compa-nies,environmental authorities and other stake-holders involved in the licensing of strategic mineral projects(“Pro-Minerals”),as well as a 2
29、022 programme aimed at developing artisanal mining.Although the new administration claims it will value small-scale and artisanal miners,the guidelines adopted by the previous government to promote these activities will likely be revised.The transition team responsible for examining measures for the
30、 mining sector has also advised that the new government should revoke pro-grammes such as Pro-Minerals.The actions of the federal government in the coming years will be focused on the promotion of clean energy,with the creation of a depart-ment within the structure of the Ministry of Mines and Energ
31、y to oversee these matters and foster BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 5CHAMBERS.COMinitiatives that help put Brazil in the centre of the energy transition globally.1.2 Legal System and Sources of Mining LawBrazil is a federati
32、ve republic divided administra-tively into 26 states and the Federal District.Bra-zils legal system is based on civil law tradition.The Federal Constitution currently in force,enacted on 5 October 1988,has general pro-visions involving the economic activity in the country and addresses a few industr
33、ial sectors,including mining.The Constitution basically pro-vides that:mining legislation can only be enacted at the federal level;property over minerals differs from the prop-erty of the land where minerals are located;minerals on the ground are a property of the federal government;exploration can
34、be carried out by Brazilian individuals or legal entities incorporated in Brazil under the authorisation of the federal government;mining can be carried out by legal entities incorporated in Brazil under the concession of the federal government;exploration and mining are considered activi-ties of na
35、tional interest;the mining concession holder has ownership of the extracted minerals;landowners,local,state and federal govern-ments are entitled to a royalty;mining is subject to environmental licensing;and holders of mining concessions are obligated to restore the areas degraded by mining activiti
36、es.The most relevant legal text on mining in Brazil is the Mining Code(Decree-law No 227/1967),which is supplemented by the regulations of the Mining Code(Decree No 9406/2018).The Min-ing Code and its regulations define and classify deposits and mines;set requirements and condi-tions for obtaining a
37、uthorisations,concessions,licences and permits;and provide for the rights and duties of holders of exploration licences and mining concessions.There are additional pieces of legislation and regulatory provisions governing specific matters related to the mining sector,such as the ANM,mining royalties
38、 and tailings dams.1.3 Ownership of Mineral ResourcesThe Federal Constitution provides that the fed-eral government owns the deposits and mineral resources(soil and subsoil),even where the land is regarded as private property.Any person who is intending to explore and/or extract minerals(mining)in B
39、razil must apply to the ANM for the corresponding authorisation or concession,even if the applicant owns the land where the exploration or mining will take place.It is common to have mining companies per-forming exploration and sometimes mining land belonging to third parties.Brazilian legislation d
40、oes not require the company to acquire the property of those lands.If the titleholder is not the owner of the land related to its operations,it shall enter into land access/use agreements(or mining servitudes)with the respective landown-er/occupier,in order to have access to,and use,the areas that a
41、re required for its operations.The landowner/occupier is entitled to be paid a rent for the occupation of the area and a compensation for damages.If any minerals are extracted from private lands that are not owned BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinh
42、eiro Neto Advogados 6CHAMBERS.COMby the titleholder,the landowner is entitled to a royalty equal to 50%of the statutory royalty(CFEM).In the event that it is not possible to reach an agreement with the landowner/occupier,the Mining Code provides for a specific judicial court to allow access to the a
43、rea,guaranteeing pay-ment of compensation to the property owner/occupier.1.4 Role of the State in Mining Law and RegulationsAs a grantor-regulator,the federal government oversees the exercise of exploration and min-ing activities under a system of concessions,licences,permits and authorisations in w
44、hich it has the authority to grant mining titles to private companies.Mineral exploration and/or mining activities can only be conducted by Brazilian nationals or com-panies incorporated under Brazilian laws,with registered offices and management in the coun-try.There is no requirement for mandatory
45、 joint venture or any sort of state participation.1.5 Nature of Mineral RightsThe Federal Constitution provides that explora-tion and mining can be performed based on an authorisation or concession granted by the fed-eral government.In that aspect,the mineral right has a constitutional basis,althoug
46、h the terms for granting and using an exploration licence or a mining concession will be provided by the law(ie,the Mining Code).Mineral rights are not considered a property right,but rather a right granted by the state based on administrative law.1.6 Granting of Mineral RightsMineral rights are uni
47、lateral administrative acts,granted by the federal government.The ANM is the federal agency entitled to manage,regulate and supervise mining activities in Brazil,along with the Ministry of Mines and Energy(MME).By definition,exploration rights are granted by the ANM and,in most of the cases,mining c
48、onces-sions are granted by the MME(but concessions for the exploitation of minerals employed in the construction industry without industrialisation are issued by the ANM).States do not have the authority to grant mineral rights.1.7 Mining:Security of TenureIn general,there are two main types of mine
49、ral rights in Brazil:exploration licences and mining concessions.Exploration licences are granted on a first-come,first-served basis(also known as“priority”),which determines that,as long as the claimed area is not covered by any other mineral rights in force and all legal requirements have been met
50、,the first individual to apply for a specific area will have the right to obtain the corresponding mineral right.Exploration licenc-es are granted for a period of up to four years,with renewal allowed for an equal period at the discretion of the ANM.If the exploration works are deemed successful wit
51、h the identification of a resource,the titlehold-er shall submit to the ANM an exploration report.Upon the analysis and approval of the explora-tion report by the ANM,the titleholder shall have the exclusive right to apply for the mining con-cession within a one-year term counted as from the publica
52、tion of the ANM approval.The application for the mining concession shall include detailed geological and geophysical BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 7CHAMBERS.COMinformation of the related area,as well as a mine development pl
53、an and a closure plan.The min-ing concession shall also be granted once,in addition to the ANM reviewing and approving all technical materials,the titleholder presents the corresponding environmental installation licence of the project.In short,Brazilian legislation provides enough certainty that th
54、e holder of the exploration rights,upon being successful in exploration,will have exclusive rights to apply for the correspond-ing mining concession.The ability to mine is provided for in legislation,but there are other circumstances that may affect the exercise of such rights.An application for a m
55、ining conces-sion can be denied if it is deemed harmful to the public good or if it adversely affects other interests that,in the view of the federal govern-ment,should prevail over mining.In addition,if the environmental licence for the installation of the facilities is not obtained,the mining conc
56、es-sion will not be granted.2.Impact of Environmental Protection and Community Relations on Mining Projects2.1 Environmental Protection and Licensing of Mining ProjectsThe Federal Constitution establishes the peo-ples right to an ecologically balanced environ-ment.It recognises the environment as es
57、sential for a healthy quality of life,and imposes on the government and society the duty to defend and preserve the environment for present and future generations.As a general rule,the state environmental authority is in charge of licensing a mining pro-ject,as opposed to the federal environmental a
58、uthority.The federal environmental authority will be in charge on an exceptional basis when-ever mining activities will be undertaken in,or cause an impact on,areas deemed as federal,such as national environmental conservation units or indigenous lands,as well as in cases where mining activities wil
59、l be executed in two or more states.Environmental LicensingEnvironmental licensing is required for projects and activities that use environmental resources and/or are potentially polluting,such as mining.In general,there are three licensing phases:first,the preliminary licence,which approves the pro
60、ject location and design;second,the installation licence,which author-ises the installation of the facilities and prem-ises;and third,the operation licence,which allows actual operation and mining activities.Such licences may provide for specific condi-tions to be met by the company on a case-by-cas
61、e basis,considering the particulars of the project and of the affected environment.Environmental AuthoritiesEnvironmental authorities are usually well equipped and efficient in Brazil,but in some cas-es there is criticism that they hold too much dis-cretion.Many of those authorities are constantly s
62、upervised by the Public Prosecutors Office to ensure that proper protection of the environment is addressed.In addition,the tailings dam failure events in Mariana(2015)and Brumadinho(2019)have led the ANM and environmental authorities to focus on stricter rules for companies,mainly regarding environ
63、mental protection and safety in mining operations.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 8CHAMBERS.COM2.2 Impact of Environmentally Protected Areas on MiningIn order to remove vegetation,companies must observe restrictions in connect
64、ion with legal reserves and permanent preservation areas.Legislation provides for the mandatory consti-tution of the legal reserve,which consists in the setting aside of the area of a rural property for native forest.The legal reserve usually corre-sponds to 20%of the area of each rural property,but
65、 in the Amazon,such area can be increased to 35%of the property in areas of cerrado(veg-etation similar to savannah)or 80%of the prop-erty in areas of forest.Permanent preservation areas(APPs)are defined as such by applicable legislation and may be covered by native vegetation,such as:areas along ri
66、vers or watercourses;areas around lagoons,lakes,reservoirs or springs;areas on the top of hills,mounts,mountains or mountain ranges;areas along slopes or part of them,with declivities greater than 45 degrees;areas in coastal forests as dune setters or mangrove stabilisers;areas along chapadas;and ar
67、eas located at heights greater than 1,800 metres.Mining activities may only be performed in APPs upon the acknowledgement that the operation would meet the public interest,and upon the ful-filment of the conditions imposed by regulations.Moreover,when exploration and mining works are performed withi
68、n environmental conserva-tion units of sustainable use(environmental pro-tection areas created by law or decree where economic activities may be coupled with conser-vation activities),Brazilian environmental legisla-tion determines that special requirements may apply on a case-by-case basis.The cons
69、erva-tion units usually have a buffer zone around them in which economic activities can be restricted.2.3 Impact of Community Relations on Mining ProjectsIn the context of the environmental licensing process,public hearings to discuss the environ-mental impact assessment and its report may be held,s
70、o that communities can obtain further details of a project and voice their concerns.Although the industry generally acknowledges that mining companies should keep communi-ties informed prior to,during and after the min-ing works regarding the developments that may affect them,there is no such requir
71、ement in Brazilian legislation.Usually,this information is provided by means of public hearings.2.4 Prior and Informed Consultation on Mining ProjectsAlthough Brazil is a party to Convention No 169 of the International Labour Organization(the Indigenous and Tribal Peoples Convention),the Convention
72、has not yet been transferred into regulation in Brazil.Even so,mining companies that undertake activities in lands of indigenous or tribal peoples do carry out consultation.Likewise,the Public Prosecutors Office holds the view that compliance with Convention No 169 is mandatory regardless of the lac
73、k of regu-lations.In some cases,lawsuits have been filed to seek a court decision to force the mining com-pany to perform proper consultation.In those cases where the consultation has been carried out,it was performed by the investor and not by the Brazilian government.BRAZIL Law and PracticeContrib
74、uted by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 9CHAMBERS.COM2.5 Impact of Specially Protected Communities on Mining ProjectsThe Brazilian Constitution establishes that indig-enous peoples hold the original right and have the exclusive use of the lands they have tradi-tio
75、nally occupied.Exploration and mining activ-ities inside indigenous areas are permitted by the Federal Constitution upon approval by the National Congress.However,due to the lack of specific regulation for this matter,the National Congress has yet to authorise any exploration or mining activities wi
76、thin indigenous areas.In addition,the Quilombola peoples(descend-ants of former slaves who organised themselves in communities)are another example of a tra-ditional community legally protected in Brazil.The Quilombolas are entitled to obtain title to the land that they occupy.Mining activities are p
77、ermitted in Quilombola areas,but require spe-cific review prior to the granting of mineral rights.Furthermore,in order to carry out their opera-tions within those areas,mining companies must negotiate with the Quilombola representatives so that they can enter into agreements on the payment of compen
78、sations for the use of such lands.2.6 Community Development Agreement for Mining ProjectsBrazilian laws do not provide for the require-ment of the company entering into community development agreements.Nonetheless,compa-nies usually enter into communities with local authorities to support some socia
79、l initiatives,as part of their corporate social responsibility.2.7 Environmental,Social and Governance(ESG)Guidelines and RegulationsThe ESG issue has gained an undeniable impor-tance in the Brazilian corporate sector in recent years.There has been an increasingly clear and urgent call from society
80、and the market for com-panies to adapt to ESG principles.However,no major ESG guidelines or regulations have been introduced in Brazil specifically for the mineral sector.From a legislative and regula-tory perspective,the tendency perceived since the recent major tailings dam accidents,which took pl
81、ace in 2015 and 2019,is an increase in inspection activities,and an enactment of laws and regulations that provide for stricter rules and more severe penalties in the case of ESG-related defaults.Corporate governance(the“G”pillar)has become the main element for mining compa-nies to bring their activ
82、ities in line with several aspects related to the environment and society,implementing the“E”and“S”pillars.Companies increasing concern with image and reputation,associated with a greater corporate awareness of the systemic and financial con-sequences of non-compliance with the best practices in ESG
83、,has carried a considerable weight in the development and implementation of social,environmental and corporate policies.2.8 Good and Bad Examples of Community Relations/Consultation Impacting Mining ProjectsGenerally,good examples are set when the min-ing companies believe in aggregating the local c
84、ommunities as part of the project itself.This can be by creating jobs,developing local infra-structure with compliance and,in short,engag-ing communities to a certain extent in the project or operations.However,companies that do not involve local communities in their projects from the outset BRAZIL
85、Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 10CHAMBERS.COMusually face conflicts and popular rejection,which may result in the decrease of political will and support for the project,creating larger dif-ficulties for its development.In addition,t
86、he recent tailings dam failure events in Mariana and Brumadinho also created a more complex scenario for mining companies to develop a relationship with communities and to hold their social licence.3.Climate Change,Energy Transition and Sustainable Development in Mining3.1 Climate Change EffectsSo f
87、ar,there is no specific legislation or regula-tion referring to climate change matters in Brazil applicable specifically to mining activities.The issues related to climate change are indirectly addressed by means of the regular environmen-tal protection laws in force in the jurisdiction.3.2 Climate
88、Change Legislation and Proposals Related to MiningNo climate change legislation has been passed in Brazil.With a new government taking office in 2023,it is expected that discussions regard-ing climate change in general,and not only with regard to mining,will increase during the coming years.3.3 Sust
89、ainable Development Initiatives Related to MiningOne of the main principles of the Mineral Law in Brazil is the provision for environmentally sus-tainable mining.As a result,holders of mining concessions are obligated to restore the areas degraded by mining activities.In practical terms,some compani
90、es have incor-porated sustainable development initiatives not only in preparation for mine closure,but also as part of the operations.Some of those initiatives have the purpose of meeting one or more tasks of the sustainable development goals.It has also been reported that a few initiatives may invo
91、lve partnerships with local authorities.However,there are no public policies by the federal gov-ernment to encourage or foster such initiatives.3.4 Energy-Transition MineralsThere are no specific initiatives focused on ener-gy-transition minerals.A relevant development for lithium production,however
92、,was introduced in 2022,when the federal government lifted restrictions on the exports of lithium.As lithium is considered a mineral of interest to the nuclear industry,exports until 2022 were subject to a certain quota,which was a major obstacle to the development of lithium projects in Brazil.The
93、new Minister of Mines and Energy has also announced that an Energy-Transition Depart-ment will be created in the first weeks of 2023.The scope of the new departments activities is still unclear.Although the relevance of natural gas and biomass were expressly mentioned during the announcement,it is e
94、xpected that the new department will also deal with energy-transition minerals.4.Taxation of Mining and Exploration4.1 Mining and Exploration Duties,Royalties and TaxesMining activities are taxed in the same way as businesses in general.The Brazilian tax system contains a variety of taxes at the fed
95、eral,state and municipal levels.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 11CHAMBERS.COMCorporate Income TaxBrazilian corporate income tax(IRPJ)is levied at the federal level at the rate of 15%on taxable profits.A 10%surcharge is levied
96、 on the actual profits,presumed profits or profits determined by the tax authorities in excess of BRL240,000 per year.Taxable profits are ascertained by deduct-ing the operating costs and expenses from the gross income originating from the companys core activity and incidental businesses.Some of the
97、se costs and expenses are not deductible because of their nature or the amount involved.There are also provisions for tax exemption once a companys taxable profit has been ascertained.Brazilian legal entities are allowed to carry for-ward losses indefinitely,which is important for companies that und
98、ertake exploration,develop-ment and,later,mining activities.These losses can only offset 30%of taxable profits,which can result in deferral of the utilisation of the losses in the event that the legal entity sustains material losses and profits that are not substantial.As a general rule,the income,c
99、apital gains and other earnings paid,credited,delivered,employed or remitted by a Brazilian source to a foreign-based individual or legal entity are subject to withholding tax at a general rate of 15%.The tax rates on capital gains of Brazil-ian individuals or non-residents(both individuals and comp
100、anies)may vary from 15%to 22.5%depending on the amount of the capital gains.Rates may reach 25%for income paid to a per-son residing in a jurisdiction deemed to be a tax haven or privileged tax regime for Brazilian tax purposes.Social ContributionThe social contribution on net profits(CSL)is cal-cul
101、ated on the net profits before the allowance for income tax,adjusted by the additions,exclu-sions and offsets prescribed by tax law.The CSL rate is 9%and the figures paid are not deduct-ible from the income tax base(actual profits).Other federal contributions PIS(Programme of Social Integration)and
102、COFINS(Contribution for the Financing of Social Security)are levied at the combined rate of 9.25%and are assessed over the gross billings of the company.Tax on TransactionsThe tax on financial transactions(IOF)is a tax on foreign exchange,securities,credit,gold and insurance transactions.The IOF/Exc
103、hange is cur-rently imposed on a variety of foreign-exchange transactions.Currently,for most exchange transactions,the rate of IOF/Exchange is 0.38%.Tax on DistributionThe tax on distribution of goods and services(ICMS)is a valued added tax levied by the state on the circulation of goods(thus coveri
104、ng the entire chain of trades from the manufacturer to the end consumer)and on the provision of intrastate and interstate transportation and communications services.Normally,the trans-action value serves as the ICMS tax base.It is a non-cumulative tax and,as such,generates a tax credit to be offset
105、by the product or service recipient against the tax payable on future trans-actions.Each Brazilian state is free to establish its own ICMS rates(generally between 17%and 18%).Tax on ServicesThe tax on services(ISS)is assessed on the ser-vices provided by a company or independent contractor or profes
106、sional,in accordance with a list of services attached to a federal supplemen-tary law.ISS is levied by the local municipality at a rate of between 2%and 5%on the service value.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 12CHAMBERS.COMMini
107、ng RoyaltiesThe mining statutory royalty is known as the Financial Compensation for the Exploitation of Mineral Resources(CFEM)and the proceeds of this royalty are shared between the local(75%),state(15%)and federal(10%)governments.The royalty rate varies from 1%to 3.5%,depend-ing on the substance.T
108、he royalty is calculated based on the revenue arising from the sales of the ore,with the deduction of marketing taxes.In the event that the mining concession holder actually consumes the substance in its produc-tion chain,then the royalty will be calculated based on the market price of the substance
109、 or,if such a price cannot be determined,a reference value determined by the ANM.Proposals to Change the Tax FrameworkThe National Congress is currently discussing amendments to the Brazilian Constitution and a tax bill that are intended to simplify and com-bine taxes and reduce the complexity of th
110、e tax system(the“Tax Reform”).The Tax Reform,however,may result in an increase of the tax burden on the mining sector,as some of the proposals increase CFEM rates.The Tax Reform is a priority of the new gov-ernment.It is uncertain,however,whether the federal government will be able to gather sup-por
111、t in Congress in order to approve substantial reforms in the tax framework,or how long politi-cal discussions and negotiations would take.4.2 Tax Incentives for Mining Investors and ProjectsThere are no tax stabilisation agreements in Bra-zil.Tax exemptions,breaks and incentives are granted or cance
112、lled via agreements(convni-os)entered into between the relevant Brazilian governmental authorities.More commonly,they are granted at the state level and with reference to the ICMS taxes.However,states that usually grant ICMS tax breaks and incentives to attract investment,but without the consent of
113、other states,may generate a so-called tax war.In addition,there are tax breaks available in con-nection with IRPJ assessed in projects located in the Amazon or the north-eastern regions of the country.These tax breaks may represent a deduction of 75%in IRPJ tax.4.3 Transfer Tax and Capital Gains on
114、the Sale of Mining ProjectsAs a general rule,if the seller of a mining project has a capital gain arising from the transaction,the seller shall pay capital gains tax.In the case of corporate structures outside Brazil,Brazilian tax rules provide that if a non-Brazilian entity has any capital gain ari
115、sing from the dis-posal of a Brazilian asset,then such gain could be subject to withholding tax at a sliding scale rate between 15%and 22.5%,as described in 4.1 Mining and Exploration Duties,Royalties and Taxes.(If the seller is based in a tax-haven jurisdiction,the applicable rate will actually be
116、25%.)5.Mining Investment and Finance5.1 Attracting Investment for MiningAttracting investments for mining is crucial for the development of the Brazilian economy,since the mining sector contributes to the creation of direct and indirect jobs,the expansion of infra-structure and the increase of the B
117、razilian trade balance.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 13CHAMBERS.COMSince Brazil does not have any bilateral invest-ment treaties in place,the federal government relies on general policies and legislation appli-cable to busin
118、esses in general(eg,exemption of export tax in the exportation of non-manu-factured goods,and exemption of ICMS tax on exported goods).5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining SectorsForeign capital in Brazil is governed by Law No 4131/1962(the“Foreign Capital
119、Law”).As a gen-eral rule,foreign capital can enter Brazil freely,without constraints over the total amount to be invested and without the need of prior approval by the government.The registration of foreign capital with the Central Bank of Brazil is required when bringing funds into Brazil,remitting
120、 profits abroad,repatriating capital,and reinvesting proceeds.Investment is registered in the foreign currency in which it is made,or in Brazilian currency if the funds origi-nate from a non-resident account properly kept in Brazil or from assets located in the country.The main restriction with rega
121、rd to foreign invest-ment in the Brazilian mining sector is related to foreign ownership of mining companies that have rights in certain areas.The current interpre-tation of the federal government is that legisla-tion does not allow mining companies that have 51%equity interest held directly or indi
122、rectly by non-Brazilians to hold mineral rights and per-form exploration and/or mining activities within the countrys border area(ie,the 150 km strip of land parallel to the countrys dry borders).5.3 International Treaties Related to Exploration and MiningBrazil has not ratified any bilateral or mul
123、tilat-eral investment treaties.Brazilian authorities,at some point,considered that those treaties might lead to international disputes and could limit the governments ability to change policies and regulations.In this context,Brazil chose to rely exclusively on domestic legislation to pro-tect inves
124、tment and private property in general(both Brazilian and foreign).5.4 Sources of Finance for Exploration,Development and MiningThe main financing options for mining devel-opment in Brazil are the banking system,the So Paulo stock exchange(although very few mining companies are listed on that exchang
125、e),the international capital markets and the inter-national financing markets.The Canadian,Unit-ed States,British and Australian markets are important sources of investment(both equity and debt).5.5 Role of Domestic and International Securities Markets in the Financing of Exploration,Development and
126、 MiningInternally,the So Paulo stock exchange has not been widely used as a source of financing by mining companies.Despite a few companies that are listed on the So Paulo stock exchange such as Vale,CSN,Gerdau and Ferbasa most capital market transactions involving min-ing assets are structured in o
127、ther markets,by way of parent companies.In 2020,Aura Minerals was successfully listed on the So Paulo stock exchange,which evidences that the economic conditions are favourable for mining companies other than majors that float their shares in the Brazilian market.BRAZIL Law and PracticeContributed b
128、y:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 14CHAMBERS.COM5.6 Security Over Mining Tenements and Related AssetsAccording to a newly enacted amendment to the Mining Code,the titleholders of mineral rights in all stages(including exploration licences and rights to apply for a
129、 mining concession)are allowed to create a security interest over such mineral rights.The amendment changes the pre-vious interpretation from the federal government that only mining concessions could be granted as security.In addition,as royalties and streaming transac-tions cannot be registered aga
130、inst title to the mineral rights,companies have to put in place creative alternatives to ensure that creditors have protections.Even so,the lack of proper regulatory provision for those transactions may add some uncertainty to financing parties and that may be reflected in less favourable financial
131、conditions for the mining company.A regulation for registration of security over min-eral rights has been in effect since 2 March 2022 and deals with registration proceedings,credi-tor protection mechanisms and foreclosure.As the regulation refers to mining concessions,it should be revised soon in o
132、rder to conform with the recent changes to the Mining Code.6.Mining:Outlook and Trends6.1 Two-Year Forecast for the Mining SectorThe revenue of the Brazilian mining sector in 2022 did not match the record numbers of 2021 for several reasons,including uncertainty cre-ated by the 2022 general election
133、s and the drop in demand for iron ore in China,which led to a decrease in iron ore prices.Despite that,the mining sector continues to be a key player in the Brazilian economy,responsible for creating jobs and paying taxes.Fluctuations are expected,as this is a sector under the influence of several i
134、nternal and external factors.The newly inaugurated government will likely adopt stricter measures towards mining in the next few years.Nevertheless,no major shifts in current policies are expected.Shift of the Energy Matrix and Increasing Demand for Green MineralsAs the Brazilian energy matrix conti
135、nues to shift towards more renewable sources,the mining sector will continue to play a central role in this transition.Metals such as nickel,lithium and cobalt,and rare earths,which occur abundantly in the Brazilian territory,are essential for making the energy matrix transition possible.Local and i
136、nternational players are increasingly investing in exploration and the development of projects associated with green minerals.The recent changes to legislation that restricted lithium exports and the creation of an Energy Transition Department within the Ministry of Mines and Energy show that the fe
137、deral gov-ernment is willing to make Brazil a global leader in the clean energy sector.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 15CHAMBERS.COMPinheiro Neto Advogados is a Brazilian,in-dependent and full-service firm,specialising in mul
138、tidisciplinary deals and translating the Brazilian legal environment for the benefit of local and foreign clients.Founded in 1942 and with clients in almost 60 countries,the firm has grown organically and developed a distinctive,tight-knit culture,with a low associate-to-part-ner ratio.Its unique,de
139、mocratic governance structure promotes transparency and consen-sus-building among the partners.With a focus on innovation,the firm has kept its competitive edge throughout the years,and is widely hailed as an institution of the Brazilian legal market.In order to maintain its status as a valued strat
140、e-gic partner to its clients,the firm invests heavily in professional development,not only through strong on-the-job training,but also by means of the highly structured Pinheiro Neto Professional Development Programme championed by the firm.AuthorsCarlos Vilhena is a partner at Pinheiro Neto Advogad
141、os.He oversees the firms mining and government relations practices.Carlos has an LLB from the Law School of the University of Braslia and an LLM from the Centre for Energy,Petroleum,Mineral Law and Policy at the University of Dundee.He is the Treasurer of SEERIL at the International Bar Association
142、and the Secretary of the Foundation for Natural Resources and Energy Law.In his mining practice,he has advised exploration and mining companies and investors on a wide variety of mining-related issues.Carlos has been continually listed as a top mining lawyer.Marina Bertucci Ferreira is a senior asso
143、ciate at the mining and government relations practices of Pinheiro Neto Advogados.Marina provides legal advice to national and foreign clients in connection with the mining industry,including regulatory affairs,mergers and acquisitions,and financing.She also advises clients on the development of pub
144、lic policies and their impacts on the business environment.Marina has an LLB from the University Centre of Braslia,a Political Science degree from the University of Braslia,a postgraduate degree in Corporate Law at Getlio Vargas Foundation.She is currently pursuing an LLM in Global Business Law at C
145、olumbia University.BRAZIL Law and PracticeContributed by:Carlos Vilhena and Marina Bertucci Ferreira,Pinheiro Neto Advogados 16CHAMBERS.COMPinheiro Neto AdvogadosSAFS Quadra 2Bloco B,Ed.Via Office3 andarCEP:70070-600 Braslia DFBrazilTel:+55 61 3312 9400Fax:+55 61 3312 9444Email:.brWeb:.brCHAMBERS GL
146、OBAL PRACTICE GUIDESChambers Global Practice Guides bring you up-to-date,expert legal commentary on the main practice areas from around the globe.Focusingon the practical legal issues affecting businesses,the guidesenable readers to compare legislation and procedure and readtrend forecasts from legal experts from across key jurisdictions.To find out more information about how we select contributors,emailKatie.B