Brazil: Changes affecting the mining sector - KPMG Global
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Brazil: Changes affecting the mining sector

Brazil: Changes affecting the mining sector

There are pending changes to the rules governing the mining sector in Brazil.


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The revenue from a “royalty” on mining activities (Compensação Financeira pela Exploração de Recursos Minerais—CFEM) is shared by federal, state, and municipal jurisdictions, depending on the mineral resource in the respective territory. Currently, Brazil’s government is seeking to alter the rules governing the mining sector by means of a series of “provisional measures” (Medida Provisória—MP). A provisional measure is an “act” issued by the president, with the authority of law until later approved by Congress. In general, a provisional measure is effective as from its date of publication for a 60-day period, but it may be extended for an additional 60-day period (for a total of 120 days) on a request from Congress.

The recent provisional measures concerning the mining sector are:

  • MP 789 / 2017 relating to the CFEM and revising the basis for calculating the CFEM as gross revenues from sales of mineral assets less the amount of taxes paid on this operation (previously, the basis was net revenue), and also replacing the CFEM rates (for instance, the 2% rate on iron ore being replaced by system of fluctuating rates, and the CFEM rates on niobium, diamonds, and gold being increased)
  • MP 790 / 2017 amending the mining code and concerning special regimes for mining exploration (including rules that extend the time period for exploration to four years, increased from two years)
  • MP 791 / 2017 creating a national mining agency (Agência Nacional de Mineração) to replace the existing current department that deals with these issues

KPMG observation

While the rules and changes under these three provisional measures are already effective, the provisional measures will be further analyzed by the Brazilian Congress and may be subject to changes.


Read an August 2017 report (English) or (Portuguese) prepared by the KPMG member firm in Brazil

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