Are Promising Mining Changes Here Falling Apart?

We've seen some positive changes in mining regulations globally of late.

Places like West Africa have made moves to improve legal conditions for miners and explorers. Guaranteeing security and exploration tenements as well as crystallizing rules on critical issues such as royalties.
But sometimes the regulatory sword can cut the other way.

In Tanzania, for example, the government has recently suggested it may review mineral licensing. With a view toward taking a bigger share of revenues from such activities.
And news late last month suggests that another mining hotspot may be seeing its licensing regime deteriorate: Brazil.

Reuters quoted insiders in the Brazilian mining sector as saying that reforms to the country's mining code have stalled. Putting in jeopardy a number of changes that appeared to be moving forward just a few years ago.

In fact, reforming Brazil's mining sector was a key part of President Dilma Rousseff's platform back as far as 2009. With the President drafting a new mining code that was meant to overhaul the sector across the country.

The bill however, received mixed reviews. With industry groups panning its treatment of small miners and exploration companies--who, under the rules, could face the loss of their licenses if they didn't move on full-scale development quickly.

In response to these problems, a number of rival proposals for the mining code sprung up. With an edited version of Rousseff's plan finally making its way to Brazil's Congress.

But insiders are now suggesting that even the watered-down version of that plan will struggle to gain traction in political circles. Leading to the possibility that it could stall completely.

That could jeopardize any reforms. If the bill doesn't pass before national elections in October, a change in government could mean a total put-down of the the proposed rules. Taking the industry back to square one when it comes to making improvements.

In the meantime, reports are that many license applications remain in a frozen state. With little potential for progress on advancing exploration and development projects.

A hurdle that needs to be weighed against the vast prospectivity of this critical mining nation.

Here's to making it stick,

Dave Forest