Govt infighting hits Brazil mining bill

Reuters/Brasilia

The Brazil government plans to submit its mining reform bill to Congress in June rather than this month, Energy Minister Edison Lobao said, prolonging a wait that is slowing investment in mineral extraction.

The bill, first unveiled in 2009, is expected to create an independent regulator, establish auctions for strategic minerals and impose tougher exploration and development schedules for concession holders.

The expected changes are significant enough to have prompted companies to delay billions of dollars in planned investments as they wait for a clearer idea of the legal framework that will govern them and help determine their bottom line.

Government sources said the wait could be further extended because President Dilma Rousseff does not want to put the bill before lawmakers any time soon due to growing divisions in her coalition majority in Congress.

Rousseff’s government is just getting over intense wrangling within its 18-party coalition to pass a law that would open the country’s ports to more private investment, boosting efficiency.

Lobao, however, denied accusations that the government was deliberately delaying the mining legislation to allow the dust to settle in Congress.

“The Congress is settled, the government has a functioning base there,” Lobao said, without answering a reporter’s question on whether the draft bill had been finalised.

Mining is an important part of some states’ economies and revenue. Legislative reform of the oil and gas industry has been one of the most difficult and lengthy bills the government has tried to move through Congress.

The fight among states over royalty redistribution in the oil reform bill is being settled by the Supreme Court.