Late last week, as the walls of two tailings dams at Samarco´s mining complex near the town of Mariana collapsed, just 80km away, in the city of Belo Horizonte, a group of Brazil´s foremost mining influencers was discussing the major issues affecting the sector.
Upon hearing the terrible news the participants of the 2nd Brazilian Mining Forum, held at the headquarters of the Minas Gerais Federation of Industries, observed a minute of silence before finalising the event with the development of a ‘Mining Card’ of key action points to be used to approach the main institutional bodies responsible for the sector.
The Mining Card reflected the general discontent with and growing anger at what has been labelled a ‘blackout’ in government activities involving the mining industry. While the development of Brazil´s new mining code has been crawling along for more than five years, accompanied by major uncertainty for stakeholders in the sector, the situation has worsened of late as the country´s substantial political and economic woes have taken centre stage, leaving everything else floundering in their wake.
Tellingly, the keynote speaker at the forum, Leonardo Quintão, the federal deputy responsible for developing the new code, cancelled his participation the day before, citing a critical situation in the nation´s congress that required his presence. Less than two months earlier, at Brazil´s biggest mining show, Exposibram, Quintão gave a similar excuse upon cancelling his participation at the important four-day event.
Cancellations aside, in detail the Mining Card contained five main topics: the trajectory of the new mining code; the legal security afforded mining companies in Brazil; the infrastructure required for mining activities; the end of the mining super-cycle and associated commodities price levels over the coming years; and the creation of a ‘Mining Chamber’ to focus on and optimise the various government policies affecting the sector, including environmental and legal aspects.
The latter in particular garnered significant interest from speakers and the floor, however, much of it seemed to stem from a general frustration with the government´s lack of interest in the sector, and some voiced their doubts over whether such a chamber could actually be effective. Wilson Brumer, former Vale CEO and current head of Vicenza Mineração, was especially pessimistic during the majority of his commentary and predicted that the new mining code would take another three years to be approved.
While others suggested the code would be back on the agenda early in 2016 and should be approved during the first half of the year, it is not difficult to imagine the process taking another 12-18 months, depending on how the ongoing political crisis turns out, and Brumer´s prediction was certainly respected during the discussions.
Perhaps the most emblematic comment of the forum came during a dialogue between Anglo American´s iron ore CEO Paulo Castellari and mining law expert William Freire. After Castellari summarised the myriad difficulties and delays faced in licensing the massive Minas Rio project, Freire mentioned a phrase he falls back on when asked about how long it will take to obtain Brazilian mining approvals: SDS, short for ‘Só Deus sabe’. Direct translation: Only God knows.
*Simon Tarmo is general manager, Brazil for Aspermont Limited, publisher of Mining News Brazil (Notícias de Mineração Brasil). Mining News Brazil was a media partner of the 2nd Brazilian Mining Forum.