Rights of surface owners in the mineral exploration process

Does the landowner have preference or priority rights when it comes to obtaining a research permit?

Article 11 of the Mining Code the right of priority extinguished the right of pre-emption that previously belonged to the landowner (CF 1946), replacing it with the right to share in the results of the mining.

Currently, the right of priority is defined from the moment the process is filed, i.e. the interested third party who first files the request for a research authorisation has the right of priority. For this process, the area must be declared free, according to Article 8 of Decree 9.406/2018.

 

What are the rights of the landowner?

The landowner has the following rights in relation to the use of his property during the mineral exploration and exploitation process:

I) Rent for occupation of the land to be surveyed or mined (Art. 27 of the CM);

In order for research to be carried out in the area, interventions are required that may jeopardise the use of the property for other purposes. Therefore, when the holder of the exploration authorisation needs to carry out auxiliary works and services on land in the public or private domain, covered by the authorised exploration area, it must pay the owners or squatters a rent for occupying the land in accordance with Art. 27 of the Mining Code.

II) Compensation for damages (material or moral) caused to the property or its owner;

In the event of damage to the area, the holder of the Exploration Licence must pay the superficiary an amount by way of compensation, in addition to the rent for occupying the area.

III) Participation in mining results;

According to article 11, §1 of the Mining Code, the landowner's share will be fifty per cent of the total amount owed to the States, Federal District, Municipalities and direct administration bodies of the Union, as CFEM.

In this sense, the landowner will be entitled to receive compensation for any damage caused by the mining work and a monthly rent for occupying the area, given the need to set up a mining easement on the property where the mining will take place. For information, the CFEM rates are calculated on the company's gross turnover and are as follows:

- Iron ore: 3.5%;

- Niobium, bauxite, manganese and rock salt: 3%;

- Diamonds, precious stones, cut stones, carbonates and noble metals: 2%;

- Gold: 1.5 per cent;

- Ornamental rocks, mineral and thermal water: 1%.

IV) Guaranteed recovery of the mined area (rehabilitation for post-mining use)

The superficiary is guaranteed that the mined area will be recovered and returned in a condition in which it can be used for other purposes. Mining is considered a temporary or transitory land use activity, and the recovery phase aims to return the area affected by exploitation to a level of stability that allows for future land use.

 

How much rent will the owner receive?

The value of the rent at the time of the survey must be defined between the parties, in compliance with article 27 of the Mining Code:

I - The rent may not exceed the amount of the maximum net income of the property to the extent of the area to be actually occupied;

II - Compensation for damage caused may not exceed the property's venal value to the extent of the area actually occupied by the research work, except in the case provided for in the following item;

III - When the damage is such as to render the entire property on which the area required for the research work is located unusable for agricultural or pastoral purposes, the compensation corresponding to such damage may reach the maximum venal value of the entire property;

IV - The venal values referred to in items II and III will be obtained by comparison with the venal values of properties of the same kind in the same region;

V - In the case of public land, the payment of rent is waived, and the holder of the survey is only subject to payment for damages;

 

How is the amount of compensation determined?

The Mining Code does not establish a specific criterion, and technical expertise is required to assess the area and the damage caused, respecting the rules of Article 27.

Therefore, although ownership of the land and ownership of the mineral resources in the area are distinct facts, the right to explore and research and the right to property coexist. As there are various aspects relating to the rights of superficiaries as a result of exploration activity, it is extremely important that both the holder of exploration rights and superficiaries seek an understanding of the applicable legislation at all stages of the project.