Deputy proposes changes in the mining sector – 03/08/2023 – Panel SA

Amid discussions for changes in Brazilian mining to react to the tragedy in Yanomami lands, deputy José Medeiros (PL-MT) filed four bills in the Chamber aimed at the sector. The proposals cover changes in the tax burden, in the issuance of invoices involving the gold market and the competence over the authorization of research in extraction areas.

Part of them is in line with the proposals advocated by Ibram, an institute that represents large mining companies such as Vale, AngloGold and Samarco, but the entity points out gaps. After the revelation of the Yanomami case, Ibram was one of the entities that came out in defense of regulatory changes to combat illegal mining.

In a note, Ibram states that every attempt to improve legislation is positive, but the declaration of good faith, a device in which the prospector’s word is sufficient to guarantee the legality of the gold, is the main item to be modified in Brazilian law , however, this aspect is not discussed in the PL deputy’s project.

“The repeal of this article and the issuance of the electronic invoice in the sale of gold are fundamental to allow the traceability of these operations, and the consequent fight against illegalities in the gold chain”, says Ibram.

In the case of taxes, the deputy proposes a 0.5% increase in the CFEM rates (financial compensation for the exploitation of mineral resources). In this way, rocks, sand, gravel and substances used in civil construction would be taxed at 1.5%, gold at 2% and diamonds at 2.5%.

Bauxite, manganese, niobium and rock salt would have a rate of 3.5%, followed by iron with 4%.

Ibram disagrees on this aspect of the project. According to the representative of the mining companies, the basis for calculating compensation was readjusted in 2017, from a collection of R$ 1.8 million in that year to R$ 7 million in 2022. The entity believes that the increase in CFEM fees should lead to also take into account the burden that falls on the mineral sector and that will impact the cost of the product to the consumer.

Joana Cunha with Paulo Ricardo Martins It is Diego Felix

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