On 29 December 2022, Law 14,514/2022 came into force. The new Law takes away full control of uranium mining from the state-owned company Indústrias Nucleares do Brasil (“INB”) and brings about great improvements to Brazil’s mining laws (see further here).
Although both mining exploration and extraction of minerals in Brazil by private companies has been permitted for decades, uranium mining has always been excluded, as the monopoly is enshrined in Brazil’s Federal Constitution. Under the new Law, INB maintains the monopoly over “nuclear minerals and their concentrates, associates and derivatives” yet it can delegate the following activities to private companies:
- the research, mining, commercialisation and treatment of uranium and its products;
- the development of technologies for the use of uranium and its products;
- building and operating installations for the treatment, concentration and improvement of nuclear minerals (including uranium enrichment) as well as for the conversion, enrichment, reconversion and production of nuclear materials.
There is plenty of flexibility regarding how the retained private entities are to be remunerated for carrying out these activities. These include:
- cash payments;
- a percentage of the sales received from sales (royalties);
- granting of marketing and sale rights;
- the right to purchase the minerals with their export being previously approved;
- “other ways [of remuneration] established by the parties in a contract”.
The obligation to give notice to INB about the occurrence of nuclear minerals during the exploration stage in any Brazilian tenement remains. However, where the INB finds that the uranium reserves in the area are:
(a) greater than the other mineral resources found by the tenement holder, then the INB will have the discretion to either:
(a.i) acquire the tenement from the holder; or
(a.ii) make an arrangement with the holder to jointly explore the area, with the nuclear component remaining under INB’s control and being delivered to INB upon extraction (with the operator’s remuneration being set in a contract with INB);
(b) smaller than the other mineral resources found by the tenement holder, and the exploration of the nuclear component:
(b.i) is “technically and economically viable”, then the holder will be allowed to proceed to the extraction stage under the obligation to deliver the nuclear component to INB; or
(b.ii) is “not technically and economically viable”, then the holder will be bound to dispose of the nuclear rejects.
These changes may unleash much greater exploration of Brazil’s nuclear resources, although it is yet unclear if the new Federal government will continue to encourage the participation of the private sector in ventures that up until now were reserved to state-owned enterprises.
Last modified: January 10, 2023