According to the Brazilian Constitution, mineral resources and soil constitute distinct properties, for the purpose of exploration or economic use. In this context, the ownership of mineral deposits, their research and exploration are the responsibility of the Federal Government.
As regulated by Decree-Law 227/67, the Mining Code, and reaffirmed by Decree No. 9,406/2018 in its Article 7, the right to explore will be guaranteed to the one who first submits the application to the National Mining Agency – ANM, legal successor of the National Department of Mineral Production (DNPM). Thus, there is no right to priority reserved to the owner of the soil, and eventually he may even be required to authorize the transit of personnel on his property for geological research or mining purposes.
In this context, there are several common doubts regarding the rights of the owner.
Does the owner of the land have preference or right of priority to obtain the research authorization?
With article 11 of the Mining Code, the right of priority extinguished the right of first refusal that previously belonged to the owner of the land (CF 1946), replacing it with the right to participate in the results of mining.
Currently, the right of priority is defined from the moment the process is entered, that is, the interested third party who first files the request for research authorization has the right of priority. For this process, it is necessary that the area is declared free, according to Article 8 of Decree 9.406/2018.
What are the rights of the landowner?
The owner of the soil has the following rights in relation to the use of his property during the process of mineral research and exploration:
I) Income from the occupation of the land to be researched or mined (Art. 27 of the CM);
In order to carry out research in the area, interventions are necessary that may harm the use of the property for other purposes. Thus, when the holder of a research authorization needs to carry out works and auxiliary services on land in the public or private domain, covered by the authorized research area, he must pay the owners or squatters a rent for the occupation of the land in accordance with Article 27 of the mining code.
II) Compensation for damages and losses (material or moral) caused to the property or its owner;
If damage occurs to the area, the holder of the Research Permit must pay the landowner an amount as compensation, in addition to the income for occupying the area.
III) Participation in the results of mining;
According to article 11, paragraph 1 of the Mining Code, the participation of the owner of the land will be fifty percent of the total amount due to the States, Federal District, Municipalities and bodies of the direct administration of the Union, as CFEM.
In this sense, the landowner will be entitled to receive compensation for any losses caused by the mining work and to receive monthly income for the occupation of the area, in view of the need to constitute the mine easement on the property where the mining will be carried out. For information, the CFEM rates are calculated on the company's gross revenue, and have the following rates:
– Iron ore: 3.5%;
– Niobium, bauxite, manganese, and rock salt: 3%;
– Diamonds, precious stones, cut stones, carbonados and noble metals: 2%;
– Gold: 1.5%;
– Ornamental stones, mineral and thermal water: 1%.
IV) Guarantee of the recovery of the mined area (rehabilitation for post-mining use)
It is guaranteed to the landowner that the mined area is recovered and returned in conditions of use for other purposes. Mining is considered a temporary or transitory land use activity, and the recovery phase aims to return the area affected by exploration to a level of stability that allows future land use.
How much rent will the owner receive?
The amount of income at the time of the research must be defined between the parties, in compliance with article 27 of the Mining Code:
I – The rent may not exceed the amount of the maximum net income of the property in the extension of the area to be actually occupied;
II – The compensation for damages caused may not exceed the market value of the property in the extension of the area effectively occupied by the research works, except in the case provided for in the following item;
III – When the damage is such as to render useless for agricultural and pastoral purposes the entire property in which the area necessary for the research work is located, the compensation corresponding to such damages may reach the maximum market value of the entire property;
IV – The market values referred to in items II and III shall be obtained by comparison with market values of property of the same kind, in the same region;
V – In the case of public land, the payment of rent is waived, and the holder of the research is subject only to the payment related to damages and losses;
How is the amount of compensation defined?
The Mining Code does not establish a specific criterion, and technical expertise is required to assess the area and the damage caused, respecting the rules of Art .27.
Thus, although the ownership of the soil and the ownership of the mineral resources existing in the area are distinct facts, the Right of exploration and research and the Right of Property coexist. Because there are several aspects related to the rights of surface owners due to the exploratory activity, it is extremely important that both the holder of the exploration rights and surface owners seek an understanding in relation to the legislation applicable in all phases of the enterprise.