Brazil is trying to speed up mine approvals just as its Supreme Court weighs challenges that could undo parts of the country’s new environmental licensing system.
The overhaul sets national deadlines for environmental reviews and offers strategic projects a place at the front of the queue. The changes come as the mining industry plans $76.9 billion in investment through 2030, according to the Brazilian Mining Institute (Ibram).
“It’s as if the environmental agency had a queue of 100,000 projects,” Solange Cunha, an environmental law partner at Silveiro Advogados in São Paulo, told The Northern Miner. “When it’s a priority project, it jumps to the front of the line.”
For miners, the promise is quicker decisions. But with court challenges unresolved and a general election scheduled for Sunday, companies are planning projects without knowing which parts of the new system will survive.
Limited change
For most large mines, the overhaul is less dramatic than it first appears.
The new licensing rules, in force since Feb. 4, leave most projects following the traditional three-stage process of preliminary, installation and operating licences, with environmental studies and public hearings along the way.
Regulators have up to 10 months to review preliminary licences requiring full environmental impact studies, followed by three months each for installation and operating licences. The clock can stop while applicants respond to requests for more information.
Mining is largely excluded from a new self-declaratory licensing route, apart from limited sand, gravel, crushed-stone and small-scale diamond operations.
“It doesn’t change much” for large mining projects, Julio Cesar Nery Ferreira, director of mining affairs and sustainability at Ibram, told The Northern Miner.
The federal law gives legal force to procedures previously established largely through regulations, he said.
“There wasn’t uniformity at the legal level. It existed only at the sub-legal level.”
Still, national deadlines mark a change in a licensing process that has historically taken four to nine years, according to KPMG and Ibram.
Priority route
The bigger prize for critical-mineral developers is a special licence for projects formally designated as strategic.
Projects still require full environmental studies, but the review period is capped at 12 months once the required studies and documents are filed.
Brazil’s new minerals policy, signed Sept. 16, created a national council that can identify priority projects and refer them for special treatment. Strategic status isn’t automatic and ultimately requires a presidential decree.
That designation could give qualifying mining projects a quicker route through the approvals queue, even as the courts consider challenges to the broader system.
Araxá test
St George Mining (ASX: SGQ) offers an early test of the licensing environment at its Araxá project, a rare earths and niobium development in Minas Gerais.
The company has filed an 800-page-long environmental study with state regulator FEAM. Based on industry experience, it expects the preliminary and installation licence stages could be completed within 12 months, St George said.
Under Brazil’s three-stage system, the installation licence allows construction, while the operating licence is issued only after the project is built and earlier conditions have been met. The new review deadlines therefore shouldn’t be read as a guaranteed path from application to production.
Court test
The biggest uncertainty lies in Brasília.
Three challenges before the Supreme Court seek to overturn parts of the licensing system, while a fourth action brought by Brazil’s construction industry chamber asks the court to uphold it.
The challenges were filed by the Green Party; the Sustainability Network with a national association of municipal environmental agencies; and the Socialism and Liberty Party with the Articulation of Indigenous Peoples of Brazil, known as Apib.
The four cases were removed from the court’s August calendar and no new hearing dates have been set.
Cunha, the environmental lawyer, doesn’t expect a ruling before a Brazilian president has been sworn in. Sunday’s general election will see voters choose the president, governors, senators and federal and state lawmakers. A presidential runoff, if needed, is scheduled for Oct. 25.
“They haven’t even started being heard,” Cunha said.
That leaves miners making investment and permitting decisions before they know either how the court will rule or what the election will mean for Brazil’s mining policies.
The challenges “fell short by being so generic” that they lack grounding “on the points that would actually deserve attention,” Cunha said.
Indigenous concerns
Indigenous and environmental groups argue that the changes weaken oversight by narrowing when agencies such as Funai, Brazil’s Indigenous affairs body, and federal land-reform agency Incra must be formally involved in licensing.
For specified licensing cases, the rules set distance thresholds around certain Indigenous lands, including 8 km in the Amazon and 5 km elsewhere. The licensing authority must consider agencies’ input but makes its own final decisions.
Apib and environmental groups including the Climate Observatory, which is taking part in the court proceedings, say the changes weaken protections for Indigenous lands and Quilombola territories that are not yet fully recognized. Quilombola communities are made up of descendants of formerly enslaved Black people.
The groups also say the rules fail to guarantee free, prior and informed consultation for affected communities.
Oversight test
Problems at existing mines illustrate the stakes for environmental oversight.
Federal prosecutors sued Vale (NYSE: VALE), mining regulator ANM and the Minas Gerais government in September over a Jan. 25 water-and-sediment overflow at the Viga mine in Congonhas.
The suit seeks an independent audit and environmental remediation.
At least 40 of the mine’s 186 drainage and water-containment structures, known as sumps, were damaged following accumulated rainfall, prosecutors said. ANM ordered a full halt at the mine and is reviewing Vale’s request to resume operations.
Vale didn’t respond to a request for comment for this story.
Cunha doesn’t expect the Supreme Court to strike down the special licence, saying the self-declaratory route faces stronger constitutional arguments.
The court could preserve licences already issued even if it overturns parts of the system, she said.
But if Brazil’s top court invalidated the special licence retroactively, a developer “may have to halt operations and go through a regularization process under the ordinary procedure,” Cunha said.
“That can happen. It creates a lot of legal uncertainty.”
Brunno Braga is a Rio de Janeiro-based journalist and market analyst who’s been covering commodities, energy, and metals across Latin America for international institutional audiences for more than 25 years.
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