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Brazil to offer thousands of mineral rights areas in H1 2017

20th October 2016

By: Reuters

  

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RIO DE JANEIRO – Brazil's government plans to sell rights to as many as 22 000 mineral exploration areas in the first half of 2017, the president of the country's geological service (CPRM) Leonardo Ledsham said on Wednesday.

Brazil also plans to sell nine large, strategic mining projects, he said, including: the Miriti phosphate deposit in Pernambuco and Paraiba states; the Palmeirópolis copper, lead and zinc project in Tocantins; the Bom Jardim copper project in Goias and the Candiota coal project in Rio Grande do Sul.

The sales are aimed at attracting investment to Brazil to help pull the economy out of its worst recession on record an kick-start an industry that has been slowed by a long-promised but incomplete reform of its 50-year-old mining code.

The 22,000 mineral areas all have had prospecting licenses issued by Brazil's National Mineral Research Department (DNPM). Those licenses were returned to the DNPM and remain available for development, Ledsham said.

An recently signed accord between his CPRM geological service, which has Brazil's largest geological database, and the DNPM will allow the government to provide potential investors with more relevant information than ever before, Ledsham said.

Up front concession purchase fees are expected to be small and mostly "symbolic" he added. He declined to say how large the areas are or what minerals the areas contained, but said the would be sold in packages of many areas and that winners would receive a three year prospecting license renewable for three more years.

Between 2010 and 2014, the CPRM studied and mapped 95 percent of Brazilian territory with mining potential, he said.

Of the nine strategic mining concessions scheduled for sale, four are planned for sale in the second quarter of 2017 and the rest in the second half of next year. All are being sold under the government's Partners in Investment Program (PPI) and involve large discovered resources.

No signing bonus will be charged. The company that offers the largest amount of investment in research into the areas in the first three years will win the rights, Ledsham said.

Royalties will be determined in the contract with the winning company or group, he added.

Three investment funds have already approached the Brazilian government about buying the areas and were offered information on the deposits. Next week Ledsham plans a roadshow to promote the sales to companies in Peru, Great Britain and Canada.

Edited by Reuters

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