Economic Utilization Plan (PAE)

The Economic Use Plan (PAE) is an essential document for any mining project and is a fundamental requirement for the Mining Application. The PAE must include the mine project, addressing aspects related to the extraction, processing and marketing of the mineral reserve.

The mandatory nature of the PAE is established in the Mining Code (Decree Law No. 227, 1967), and regulated by the Mining Code Regulation (Decree No. 9,406, 2018). The document must be prepared and signed by a legally qualified technician, accompanied by the respective Technical Responsibility Note (ART), presented in original or certified copy.

In short, the PAE must be prepared by a Mining Engineer, qualified by CREA, and must contain all information related to the mine project. In addition, it must contain a description of the processing facilities, indicators related to reserves and production, a mine closure plan and economic feasibility studies for the project . It is worth noting that the PAE must contain information compatible with all data approved in the Final Research Report (RFP) .

Preparation of the PAE: Guidelines and necessary documents

As seen previously, the PAE must include the main stages of the project planning, in order to obtain the Mining Concession. Therefore, we will address the main points that must be included in the Mining Authorization Application and in the Economic Use Plan (PAE).

It should also be noted that there are particularities depending on the substance in question . For this, it is recommended to consult the mining legislation, and if necessary, hire a qualified professional or company.

Mining Authorization Application

Article 38 of the Mining Code lists the main information required for the mining authorization application , addressed to the Minister of Mines and Energy. This application must be made by the holder of the mining authorization, or his successor, with the following items:

I – Certificate of registration with the National Department of Commercial Registration , of the established entity;

II – Designation of the mineral substances to be mined , with indication of the Research Permit granted, and approval of the respective Research Report;

III – Name and description of the location of the field intended for mining , listing, with precision and clarity, all elements such as rivers and streams, roads, topography, in addition to neighboring mining concessions, if any, and indication of the District, Municipality, County and State, and also the name and residence of the land owners or squatters;

IV – Graphic definition of the intended area , delimited by a geometric figure formed, obligatorily, by straight line segments, in accordance with the rules stipulated in the Mining Code, and also the interested territorial properties, with the names of the respective surface owners, in addition to a location plan;

V – Easements that the mine must enjoy , when the area to be mined includes areas outside the defined polygon;

VI – Economic use plan for the deposit , with a description of the processing facilities;

VII – Proof of availability of funds or the existence of financing commitments , necessary for the execution of the economic exploitation plan and operation of the mine.

Economic exploitation plan

Regarding the PAE , the main information is listed in Art.39 of the Mining Code , which must be presented in two copies . They are:

I – Explanatory memorial: Document that serves as the exclusive source of the location of your area in the ANM database. If you want to know more, access this text .

II – Projects or preliminary projects relating to:

a) the mining method to be adopted, referring to the scale of production initially planned and its projection;

In this topic, addressing the mining plan is essential, including the mining method to be used, the mine planning and development, the expected production, the unit operations involved (drilling, blasting, loading and transportation), as well as a mining flowchart.

b) lighting, ventilation, transport, signaling and work safety;

This part mainly concerns the Mining Regulatory Standards (NRMs), established by Ordinance 237/2001 . When carrying out the mine project, it is essential to comply with the legislation, and sanctions may be imposed in case of non-compliance. Thus, for Ventilation, we have NRM 06, Lighting, NRM 11, Signaling, NRM 12 and NRM 13, and for Safety, NRM 22.

c) surface transport and ore processing and agglomeration;

This necessarily involves the project for transporting and processing the ore. Therefore, it seeks to specify the equipment that will be used, as well as the process routes, inputs and the mine layout.

d) energy, water supply and air conditioning installations;

In this topic, present the description of electrical installations, water and air supply pipes.

e) the hygiene of the mine and related work;

In this section, work safety conditions must be specifically discussed, always meeting the conditions established in NRM 22.

f) housing and its habitable conditions for all those residing at the mining site;

Still linked to NR 22, this part contains a description of the buildings that support mine operations, such as offices, workshops, restaurants, as well as safety items.

g) facilities for capturing and protecting sources, conveying, distributing and using water, in the case of mineral water;

This topic must be present in the case of exploration and use of mineral water. The main legal provisions in this case, in addition to the CM, are the Mineral Water Code , as well as Ordinances No. 231/1998 and No. 374/2009. Therefore, the project of the facilities must be presented, observing the use of authorized materials such as PVC and stainless steel, as well as the protection and storage conditions.

h) the construction of a tailings dam, where applicable, or an increase in its height, with the use of the upstream raising technique prohibited (Included by Law No. 14,066, of 2020).

Present a project for the construction of the waste disposal structure. One observation in the case of dam construction is that the PAE must contain an Emergency Action Plan , in a conceptual nature, prepared by the developer.

Additional information on the PAE

In addition to the above information, the following items are also required:

1. Economic feasibility study;
2. Data on the workforce to be employed;
3. Environmental impact control plan for mining;
4. Work schedule;
5. Rescue and salvage plan;
6. Risk management plan;
7. Mine closure plan;
8. Medical control and occupational health plan.

Economic Feasibility Study: How to prove it?

The economic feasibility analysis of the project is the initial step to verify the possibility of executing the project. For the purposes of proving the availability of funds , Ordinance 155/2016 , establishes in Art. 124, the admission of the following documents:

I – Certificate of financial capacity issued by a financial institution;

II – Proof of installation of the equipment necessary for the capture or exploitation of the mineral;

III – Proof of availability of machinery and equipment, owned or owned by third parties, sufficient to execute the economic exploitation and operation plan of the mine;

IV – Balance sheet and accounting statements for the last financial year, endorsed by a legally qualified professional.

It is worth noting that, at the discretion of the ANM, inspections may be carried out using documents I and II, mentioned above. Furthermore, it is important to specify, after this verification, the expected collection of CFEM , according to your production projection.

The importance of the other additional items mentioned above should also be highlighted. The plan for controlling environmental impacts in mining needs to be well-prepared, in compliance with environmental agencies, as well as a concise and executable mine closure plan .

Changes to the PAE: How to proceed?

The Economic Exploitation Plan (PAE) may be modified during the mining process . With greater knowledge of the deposit, changes may be identified, or even economic market conditions may require changes in the production scale. However, according to Art. 51 of the CM, this change must be presented to the ANM for approval of the new PAE.

According to Art. 67 of the Mining Code Regulation, mining in disagreement with the economic use plan results in a fine of R$3,293.90.

How can Saga Consultoria help you?

Given the importance of this document, it is clear that it is necessary to create a PAE that is consistent with your project and in accordance with your research report . Furthermore, any changes must be evaluated by the ANM, thus avoiding activities that are not in line with the best use of the deposits and without harming mine closure operations or subsequent use.

DMT is a company that provides mineral consulting services, with a multidisciplinary and qualified technical team to assist you or your company in mining processes. If you need to carry out the economic exploitation plan and other services in the mineral area, contact us . Learn more about our services .

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References:

• Website of the National Mining Agency, Pernambuco
• Jazida website
• Classes and materials Julieta Calegari – Mining Law