MercoPress. South Atlantic News Agency

Brazil to Restrict Foreign Mining

Brazil’s recently sworn in government, is concerned about increasing foreign interests in its mining assets and is looking in to the possibility of restricting foreign purchases of mines, Folha de Sao Paulo reported.

The government, which expects to send a draft legislation to overhaul the mining sector by June, will likely introduce mechanisms to create hurdles for buyers of Brazilian mines, Folha reported, without saying how it obtained the information.

Such mechanisms could include imposing minimum domestic supply quotas, Folha reported. Under the new legislation, the government could also restrict foreign participation in mining projects based “on the investors' profile,” it added.

A spokeswoman at the presidential palace in Brasilia declined to comment on Folha's story.

President Dilma Rousseff, who as chief of staff of the previous administration defended tougher oversight of the mining industry, wants the mining measures approved by the end of the year, Folha said.

Chinese companies have dramatically expanded their presence in Brazil's mining sector in recent months. Rousseff and other top officials have expressed growing concern over what they see as an increasingly one-sided economic relationship with China.

The Mining and Energy Ministry has been working on a proposal to revamp mining industry rules, which could include the introduction of auctions to award exploration permits.

Currently, the government awards permits based on requests put forward by miners.

Rousseff's predecessor, Luiz Inacio Lula da Silva, had in recent years also sought to create a new regulatory agency and require holders of concessions for areas with commercial mineral potential to start exploring for and exploiting deposits in a shorter time than required now.