ANM approves Resolution that facilitates financing of mining ventures

After four years of discussion, the Brazilian National Mining Agency (ANM) approved Normative Resolution No. 90/2021, which establishes the hypotheses for offering mining rights as a guarantee in operations to finance mining ventures, and the requirements and conditions for the transfer of ownership of mining rights, filling a regulatory gap.

The Resolution establishes that only (i) mining concessions and (ii) mine manifests can be offered as guarantee. Such provision corroborates the opinion of the Attorney General (Opinion JT nº 05/2009), who concluded that it was not possible to offer as guarantee (i) research authorization, (ii) licensing, and/or (iii) permission to mine (due to the presumed public nature of the property).

Another highlight was the broad definition adopted of fundraising operation to finance mining projects, which may include credit operations for the installation, expansion, and regularization of the project.

The Resolution further establishes that, in the case of mining concessions, either a public or a private instrument will formalize the guarantee; in case of mine manifests, in contrast, only a public instrument will be valid. In both scenarios, the guarantee instrument will be submitted by the financial institution or by the holder of the mining right electronically to the agency, and the ANM will be responsible for approving the guarantee by means of an annotation act.

Although the instrument is confidential, the ANM will maintain a public consultation platform on the existence of guarantees, as well as issue certificates containing its basic information to promote minimal publicity to potential interested parties.

During and after the constitution of the guarantee, the Resolution stipulates that (i) the waiver of the right by the debtor will be ineffective; (ii) the lease (arrendamento) will not be registered on the debtor, unless the creditor agrees; (iii) the debtor will continue to be responsible for the obligations inherent to the right holder status; (iv) in exceptional cases, the financing institution may carry out procedural acts to avoid the loss of the right given in guarantee. In addition, the financier may have access to differentiated information about the enterprise, such as security, collection of public revenues, research, exploitation, and mineral production.

The execution of the mining right may be carried out by the creditor or by third parties, through judicial or extrajudicial means, and should be preceded by ANM’s consent. Once the transfer is completed, the acquirer of the mining right will succeed the former holder in all his rights and obligations.

Finally, it is important to mention that the Resolution will only come into force in March 2022. Its normative text aims to fulfill a regulatory gap and its provisions will certainly encourage and guide the sector in terms of financing mining ventures.