Brazil Opens Amazon Gold and Copper Reserve to Private Investment

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By Michael Kepp

A presidential decree rescinding a mining ban across a vast part of Brazil’s eastern Amazon opens the gold-and-copper-rich region to private-sector investment, the Mines and Energy Ministry said.

“The decree is meant to attract new investments into the area … and to increase the supply of its minerals,” the ministry said in a statement.

An area larger than Denmark has essentially been off-limits to all mining since 1984, when the then-military government created the National Reserve of Copper and Associated Minerals (RENCA), which spans a 17,930-square-mile (46,450-square kilometer) expanse of the eastern Amazon in Amapa and Para states.

The reserve was meant to temporarily suspend exploration for and extraction of gold, copper, nickel, manganese, iron and other ores in the area to save it for future mineral extraction. But civilian governments since 1985 continued to protect the reserve as a whole based on a different development model that prioritized safeguarding vast regions of Amazon biodiversity.

President Michel Temer ended that by presidential decree, opening up part of the reserve to mining effective Aug. 23, with the government citing a need to jump-start part of the country’s struggling economy.

“The presidential decree which opens RENCA up for the mining is part of an economic development model meant to help end a severe four-year recession,” Mauricio Voidovic, executive director of the WWF in Brazil, told Bloomberg BNA Aug. 24. “And although the decree still safeguards protected areas within the RENCA region, those safeguards are inadequate because the government lacks the money and manpower to monitor whether companies who end up mining there comply with their concession contracts and to monitor against illegal miners who tend to follow legal ones into Amazon mining areas.”

Legislation Could Still Protect Areas

The Environment Ministry told Bloomberg BNA Aug. 24 that nine different parts of RENCA specifically designated as protected will remain off-limits to mining, and that the decree does not prohibit legislation needed to protect against deforestation in other federal-and-state-protected areas of the reserve, Indian reservations and in state border regions.

The protected areas include a national park, several national and state forests, a biological research station, two Indian reservations and an extractivist reserve for sustainably gathering and selling forest products.

Such protected areas account for 40 percent of the RENCA region, Elmer Prata Salomao, president of the advisory council of the Brazilian Association of Mining Research Companies (ABPM), whose members are major domestic and foreign private-sector mining companies, told Bloomberg BNA Aug. 24.

“The opening of RENCA for mining could present tremendous opportunities for private mining companies who have been waiting for over 30 year to research the type and size of reserves of gold, copper and other mineral there,” Prata Salomao told Bloomberg BNA. “But mining companies that win the right to mine in the area will have to do research to determine the type and size of those mineral reserves. That’s the only way to then determine whether to invest to extract those ores and to determine how much of an investment is needed to extract them.”

The government has not announced how it plans to sell the rights to mine in the area encompassed by RENCA. But it could, at government-held auctions, sell concessions to the highest private-sector bidder to explore for and extract noble minerals there, perhaps in exchange for royalties.

To contact the reporter on this story: Michael Kepp in Rio de Janeiro at correspondents@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

For More Information

Presidential decree (No. 9,142) removing protections on the reserve is available, in Portuguese, at http://bit.ly/2g5fkgv

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