PHASES OF A QUARRY MINERAL LEGALIZATION

PHASES OF A QUARRY MINERAL LEGALIZATION

For any election registration in mining DNPM - National Department of Mineral Production, you must first register in one ATDC - Master of Mineral Rights Holders. The documentation required is as follows:

ENTITY
  a) certified copy of the social contract, its amendments, with their records in the joint
       commercial. In case of consolidation of the social contract, just this document.
  b) a certified copy of shareholder agreements, shareholders agreements, and other corporate actions
       in effect, if applicable;
  c) a certified copy or original of attorney granted to the signatory of the registration form,
       if any;
  d) Original or certified copy of the registration card in the National Register of Legal Entities
       Ministry of Finance - CNPJ;
  e) a certified copy of the ID and CPF members, in the case of individuals, or the contract
       social and amendments thereto, the board of trade registered if legal entities;
  f) a certified copy of ID and CPF of directors or officers.
    INDIVIDUAL
    a) certified copy of ID and CPF;
    b) a certified copy or original of attorney granted to the signatory of the registration form, if applicable;
    c) a certified copy or original proof of address.
    d) single copy of the voter registration
    PUBLIC BODY (case of municipalities)
    a) copy of the official publication of the act of creation of the applicant;
    b) copy of the official publication of the act of appointment of the principal officer of the applicant;
    c) a certified copy or original card CNPJ
• Complete registration available on site DNPM (www.dnpm.gov.br)
• After registration completed, print, sign holder, notarize, DNPM the protocol, when only then will be able to request the interested area.

    FOR REGISTRATION OF MINING AREAS IN DNPM, 3 SYSTEMS ARE POSSIBLE, TO BE DETAILED BELOW.

1 - System AUTHORISATION SEARCH
The system of authorization to search is the most time consuming and expensive to reach the final stage of legalization of a deposit, but, however, is the system that provides more security and rights holder.
Requires the following steps and documents:
    1.1 - Application of Mineral Research
        Checking whether the area of ​​interest is not already registered by another.
        Registration of the applicant ATDC - Register of Holders of Mineral Rights
        The registration area can be done in the name of person or entity
        The applicant need not be the landlord for the registration area.
        The maximum area for registration is 50 hectares (20 acres) for crushed stone, sand, clay,
        gravel and dolomite, and 1,000 hectares (400 acres) for other substances, except for
        coal, peat and others, which may be 2000 hectares (800 acres).
        Location of the area of ​​interest on a map of situation
        Plan of mineral exploration, research budget and schedule.
        Last change of social contract
        Rate R $ 549.84
        Protocol process in DNPM
    • Within a period normally ranges from 3 to 12 months, DNPM examine the process, and
        being free pled area, will continue the same by issuing the permit research (2
        YEARS for crushed stone, sand, dolomite, clay, gravel, mineral water and 3 YEARS for other substances).
    • For areas located in the "boundary zone" (200 km along the same) people
        individuals and corporations will need to submit proof of social contract clause that
        company is and always will be managed by more than 51% of Brazilians, certificate of regularity
        with INSS and FGTS, proof of correctness of all members with military service,
        electoral justice and proof of citizenship in Brazil, where applicable.
    • At this stage it is not possible to transfer the mining rights.

   1.2 - Exploration Permit

The charter research is published in Official Gazette - the official journal of the union, granting permission to perform research in the area, with a term of 2 years to 3 years, depending on the substance. At this stage, the following services are required:
        Communication from start to search DNPM within 60 days after publication of the license - fined
        R $ 203.65 if not done.
        For permits research published between January and June, there will be the annual per hectare (U.S. $
        2.02 / ha of permit), which must be paid in July, and published between July and December,
        payment is made in January, worth noting that such a rate is an annual event and that the same
        is not paid on time, there will be a fine of R $ 2,036.39 per process, regardless of the value of
        fee payable.
        According to the owners of the property, to conduct the research. If there is no agreement,
        research could be conducted via judicial, but carries a long time pending. Like
        DNPM communicates to the district judge that there is a search on that site, this notice to the
        holder of the search to display the name and address of the owners of the soil, so that they
        be summoned to manifest on agreements (according to present them,
        the process is normally terminated). Failure to observe this phase does not imply loss of
        license, but if the search is done without the consent of the land owner, it may later
        enter the justice process requesting cancellation, withdrawal of your property area
        search, etc. The research does not necessarily need to be made across the authorized area,
         can be reduced to the limits where the holder has the agreement. The remaining area in this case is
         abandoned.
         Location of the area authorized by the license field
         Preparation of map detail area.
         Studies of the geology of the area, opening the auger holes, wells, mechanical probes and collection
         samples.
         Chemical and / or physical characteristics of the ore.
         Calculating the volume of ore in the area.
         Presentation of report to DNPM about all studies conducted in the area, including map
         geological description of the geology, test results and an assessment of potential
         technical and economic mining of the deposit.
     • The DNPM send technician in the field to confirm the services performed and after, publish in the Official Gazette the approval of the Final Exploration Report. The Report adopted a reduced area, the area has the license that was dropped (i.e. the area not screened) placed in
         availability for 60 days for interested parties to enable that.
     • After consent, the holder will within 1 year to present the PAE - Plan
         Economic Exploitation of the deposit, prepared by a mining engineer.
At this stage it is possible to transfer all or part of the area to natural or juridical person.
     • The non-completion of the research and subsequent non-delivery of the final report of
         DNPM research, entail a fine of $ 2.02 per hectare of license granted. After
         expiration of the license, there is no delivery of the final report, the area is free to new
         records.

         1.2.1 - Use Guide Mineral
Upon the issuance of the Exploration Permit, the holder may require the area next to the State Superintendent of DNPM where the mine is located in Mineral Use Guide, which legalizes provisionally mineral extraction in the area, within the maximum volumes defined by legislation (see table below) and may be renewed until the expiration of the license search. Usually the guide is provided for a period of one year, and its maximum time duration of the charter. After expiration of the license, and having been delivered the Final Exploration Report, the Guide can be renewed, but only after approval of said Final Exploration Report From there, it can be renewed until the publication of Mining Rule (which is the permanent authorization of mining). The downside is that this authorization expired license and a guide, while not approved the final research report and issued a new guide, mineral extraction is illegal.
To request the Guide, it is necessary to submit a mining plan area, map detail, Environmental Operating License, be up to date with the payment of the annual fee per hectare and have authorization from the property owner.
The Ministry of Defence may request this document for release of explosives, along with the Environmental Operating License.
After issuance of the guide, the holder will have the obligation to report annually until the 15th of March,
Extraction Activity Report (SAR).

TABLE OF MINERAL SUBSTANCES AND THEIR MAXIMUM AMOUNTS FOR PURPOSES OF BROADCAST USE GUIDE
MINERAL SUBSTANCE QTY / UNIT YEAR
 Sand (aggregate) 50000 Tons
Industrial Sand 10,000 Tons
 Clay (ceramics) 12000 Tons
Clays special 5000 Tons
Refractory clays 15,000 Tons
 Brita 50000 Tons
Limestone or dolomite, dolomite 20,000 Tons
Shell Limestone 12,000 Tons
Calcite 6000 Tons
Gravel (aggregate or paving) 8500 Tons
 Kaolin 3000 Tons
Diamond (gravel) 50000 Tons
Diamond (primary ore) 3000 Carats
Feldspar 4000 Tons
Phyllite 12,000 Tons
Fluorite 1500 Tons
Ornamental and coatings - carbonatic 10,000 Tons
(Marble, travertine)
                                   
Ornamental and coatings - silicated 16,000 Tons
(Granites and gneisses, quartzites, basalts and serpentinites)
Ornamental and other coatings
(Slates, sandstones and quartzites friable) 4000 Tons
Gravel 6500 Tons
Talc 5000 Tons

     1.3 - Plan Economic Exploitation of the Pool

This work is the responsibility of Engineer of Mines, which will make the mining planning
deposit and a detailed study of investments, costs and profitability of it. Proof of
availability of funds for investment in the area will be required at this stage.
For approval of this plan, the environmental license request DNPM Installation environmental agency,
once attached to the process, will be sent to Brasilia for publication in the Official Gazette of
mining ordinance, ie, final authorization for the extraction of the ore.
At this stage it is possible to transfer all or part of the title to a mining corporation, or only
still lease all or part of it.
      1.4 - seizure of the land of the Pool
After publication of the decree in the Official Gazette of mining, the holder will have 90 days to request DNPM the immission
ownership, or the confirmation of the location of the mine field. It will require:
         Request the seizure of the land to DNPM
         Demarcation of the field by topography
         Siting of concrete at the vertices of the polygon as the rules of DNPM
• The field DNPM send a technician to confirm the services and plowing of the document immission
     possession of the mine.
• An application for seizure of the land made in arrears will generate fine of R $ 2,036.39.
         1.5 - Annual Report Lavra (RAL)
After the publication of the decree in the Official Gazette mining (Official Gazette) or emission Guide
Use, the holder will have the obligation to report annually until March 15 of the following year, the Annual Mining with information production, total sales, payment of ICMS, gathering CFEM (direct tax on the mining) , costs and selling prices as well as the main buyers for the previous year, among other information, even when the mining area paralyzed, a service charge of Engineer of Mines.
Repeated failure or delay in delivery of the RAL implies fine of R $ 2,036.39 per process
mining recorded, even though there has been no production.
         1.6 - Important Notes
The ordinance is a mining title compensable before the Brazilian legislation, whatever the motivation of expropriation, and is also transferable to any other company, therefore negotiable.
Another extremely important information is that with the scaling (calculation of mineral reserves) of the deposit submitted to DNPM, the holder may provide an Economic Evaluation of the deposit by the method of Net Present Value, which determines the value of financial and economic mineral deposit , and with that, the paid-capital of the company and can be used as an object of securing financing.










2 - System REGISTRATION LICENSE (PERMIT)

     2.1 - Application of License Registration
This system is simpler than the system exploration license, requiring the following
steps and documents:
         Registration of the applicant ATDC - Register of Holders of Mineral Rights
         Checking whether the area of ​​interest is not already registered by another.
         The registration area can be done in the name of person or entity
         The applicant must be the property owner or have authorization for the same
         protocol process.
         Specific license (s) prefecture (s) Municipal (s) in which the area falls.
         Updated document of the property;
         The maximum area for registration is 50 hectares (20 acres), only being allowed to
         crushed stone, sand, clay for brick clay, gravel and dolomite lime to the soil.
         Presentation of Economic Exploitation Plan, prepared by a mining engineer,
         to use explosives or substances that possess mineral processing or mining plan
         for enterprises that have more than 5 employees, and outsourced.
         Location of the area of ​​interest in the situation map and detail map of the property.
         Rate R $ 110.82
        Protocol process in DNPM
     • Once approved, the lawsuit is completed, the holder may begin to operate (provided it has environmental Operating License) shall submit annually in March, the
        annual plowing (detailed description already made earlier in item 1.5).
                 However, it has some drawbacks:
            the
        One. You need permission from the owner of the soil, leave the city and Plan
            Economic Exploitation (if you use explosives or beneficiation) for power
            protocol logging, which causes a certain delay and consequent risk of loss
            area for other stakeholders. Moreover, the record should be limited to (s) property (s)
            authorized (s) and will have a maximum area of ​​50 hectares.
        2nd. Following protocol, the holder will have 60 days to submit to the Installation License DNPM or
            at least prove that initiated the environmental licensing agency, subject to rejection.
        3rd. The municipal government can withdraw permission at any time, with obvious risks
            for the miner and his investment, which are at the mercy of political fluctuations.
        4th. The renewal of registration will depend DNPM presentation of new municipal license
            30 days after the expiration of the previous re-authorization of the property owner, if
            this has expired, new Operating License or proof that the renewed before
            120 days to maturity and the holder not be included in active debt collection
            CFEM debts. Renewal fee: R $ 327.06.
GENERAL COMMENTS
1> Any registration systems (research permit or license registration) can be
interchangeable, ie, the owner can change from one system to another, if desired.
2> The DNPM can make requirements during any stage of the proceedings, and that failure to comply within the time given, shall result in the rejection of same.
3> Areas in the mining exploration license system must apply for permission from the DNPM
stoppage. Also the total withdrawal of an area should be required to DNPM and can be
performed through simple craft.




TABLE COMPARING THE TWO TERMS OF RECORDS OF MINING AREAS FOR PRIVATE LEGAL ENTITIES

INITIAL CASE
AUTHORIZATION FOR SEARCH: Mount faster process;
need few documents to protocol. Low initial cost.
REGISTRATION LICENSE Mounting slow process, since it depends on various licenses and documents, and Economic Exploitation Plan, to be filed. High initial cost.

ORIGINAL DOCUMENTATION
AUTHORIZATION OF LITTLE RESEARCH
REGISTRATION LICENSE MUCH

STARTING FEE: R $ 549.84 AUT.DE SEARCH / REGISTRATION LICENSE R $ 110.82

PROCEEDINGS UNTIL THE FINAL DOCUMENT tapping
AUTHORIZATION FOR SEARCH Long and bureaucratic
REGISTRATION LICENSE Relatively short and simple

LAND OWNER
AUTHORIZATION FOR SEARCH not need authorization for protocol
REGISTRATION LICENSE Need authorization for protocol

CITY HALL
AUTHORIZATION FOR SEARCH No need to license the protocol
REGISTRATION LICENSE Need license for protocol

SAFETY
AUTHORIZATION FOR SEARCH Safer
LICENSE REGISTRATION I hear insurance (can be dismissed for lack of license municipal, environmental or property owner. A city may terminate the license at any time).

COSTS
AUTHORIZATION FOR RESEARCH Due to longer pending, the total cost is higher. Costs vary with the size of the area and the type of substance required.
REGISTRATION LICENSE Cheaper, since the procedure is shorter (25% to 50% of system costs of exploration authorization)

ENVIRONMENTAL PERMIT
AUTHORIZATION FOR SEARCH Operating License required at the stage of Usage Guide
     Installation License required at the stage of Mining Rule
REGISTRATION LICENSE introduced environmental licensing protocol 60 days after the protocol process (subject to rejection)

ANNUAL REPORT TILL
AUTHORIZATION FOR SEARCH Required
REGISTRATION LICENSE Required

 DOCUMENTATION OF STRIP BORDER
AUTHORIZATION FOR SEARCH Needed
REGISTRATION LICENSE Required
3 - System RECORD OF EXTRACTION

This registration system for mining is valid only for legal entities of public law,
as municipalities and public agencies for exploitation of substances of immediate use in construction, such as crushed stone, gravel, sand or clay. It is free of fees and their processing is quite simple:
• will be approved only after obtaining the Environmental Operating License
• Maximum allowable area of ​​5 ha.
• Has maximum duration of 5 years, renewable only once.
• Only the public agency is authorized to exploit the area and should be used only in the ore public works being prohibited its sale, mining by third parties or transferred to private companies.
• The area can be recorded even on areas already claimed by others, since these
    providing permission.
LATEST Ordinances of DNPM OR THE MINISTER OF MINES AND ENERGY LEGISLATION ON THE MINERAL
ORDINANCE 374 OF 01 OCTOBER 2009 (mineral water)
ORDINANCE 564, OF 12/19/2008 (amending ordinance 266, 269, 263, 265, 268, 144, among others)
ORDINANCE 270 OF 10 JULY 2008 (registration)
ORDINANCE 269, OF 10/07/2008 (mining lease)
ORDINANCE 268, OF 10/07/2008 (Regulation the qualification process for availability)
ORDINANCE 266, OF 10/07/2008 (licensing scheme)
ORDINANCE 265, OF 10/07/2008 (amending ordinance 268 of 27.09.2005 on pre application
e)
ORDINANCE 263, OF 10/07/2008 (descriptive memorial to application area)
ORDINANCE 144, OF 03/05/2007 (user's guide)
ORDINANCE 199, OF 14/07/2006 (regulates transfers of mining rights)
ORDINANCE 392, OF 12/21/2004 (maximum areas for research)
ORDINANCE 237, OF 18/10/2001 (standards regulating mining - NRM)
DECREE 3358 OF 02/02/2000 (record extraction - prefectures)
ORDINANCE 419, OF 11/19/1999 (to enable availability of mining areas)
ORDINANCE 231, OF 07/31/1998 (mineral water)

ANSWERS TO SOME COMMON QUESTIONS

1 - How does the registration request for mining area?
See the details in "Stages of a Reservoir Mineral Legalization"

2 - What is the technical capability of the person making the application?
The record of the mining area must be performed by a geologist or mining engineer.

3 - What I have estimated costs during the process?
The costs are extremely varied in accordance with the mineral substance recorded. Elements
metal may well require research papers whose costs can reach millions of dollars. For non-metallic substances such as gravel, limestone, sand, gravel, costs are lower.
Authorization system to search for nonmetallic substances, and depending on the type of
essentially complete in the course DNPM, since the initial registration area to obtain the mining ordinance, ranges from a minimum of $ 20,000.00 for areas with small surfaces, up to R $ 200,000.00 for large areas.
To license registration system are anticipated total expenditures from the initial registration until its approval, around $ 12,000.00.
Yet for every case, there are the costs of obtaining environmental permits required for any mining enterprise, whose values ​​vary with the size of the area to be licensed and the type of substance, estimated between $ 12,000.00 to U.S. $ 18,000.00) .

Note: The costs shown represent only a sense of what can be expected and vary
case. Influence costs the distance, type of substance and size of the search area,
costs of chemical or physical analysis, providing manpower and machines by the
requesting thickness capping existing on the ore, amount of vegetation, among others.
4 - How do I know which are my areas required?
 The only alternative is to access the site DNPM
(Www.dnpm.gov.br) - joined miner - see processes.
5 - For areas that do not have any interest, as if the foreclosure proceeds?
For areas with research application or application for license registration not approved yet, the same waiver request by letter. For areas with permit research record or license approved, simply filing letter requesting resignation.
6 - How does the TCFA IBAMA? Payment is quarterly? How does the registration IBAMA?
The TCFA - Rate Control and Environmental Monitoring is due for each unit of mining and its associated processing. Each operating unit will pay a quarterly fee.
The registration is done by the IBAMA CNPJ and local operation of a plant or mineral, considered these potentially polluting activities. Below is some basic information about this.
legislation

    One. Law 6938 of August 31, 1981, amended by Law No. 7804 of July 18, 1989;
     2nd. Law No 7679 of 23 November 1988;
      3rd. Law 10165 of December 27, 2000;
     4th. Law No. 9605 of February 12, 1998;
     5th. Decree No. 3179 of October 21, 1999;
         Normative - IN on 010/01 Aug. 29, 2001 (Annex II);
     6th. Normative - IN the 37 of June 29, 2004.
     7th. purpose of monitoring and control potentially polluting activities and / or extraction, production, transportation and marketing of potentially hazardous to the environment, as well as products and by-products of fauna and flora.
Who must register with IBAMA
Pursuant to Law 6938 Art.17 Items I and II registration is required of all individuals or entities who engage in potentially polluting activities and / or extraction, production, transportation and marketing of potentially hazardous to the environment, as well as mineral products and by-products of fauna and flora, as specified in the IN 010/01.

Who is exempt from registration (IN On 10/01 - ART. third sections I, II, III and IV)

     One. Individuals who develop handicrafts made of semiprecious stones, as well as
        the manufacture and refurbishment of furniture, wooden artifacts, beddings, upholstery,
        baskets or other objects straw, vines, bamboo and the like, and thus are considered
        autonomous or microenterprises, such as carpenters, woodworkers, artisans and producers
        ornamental plants, aromatic, medicinal exotic origin, except the species listed in
        APPENDIX I and II of the Convention on International Trade in Endangered Species of Flora and Fauna
        Wild in Endangered - CITES APPENDIX I and II, consumers of firewood for use
        domestic and charcoal consumption by individuals who engage in trade
        walking;
     2nd. The trade of fish;
     3rd. Trade in building materials that sells forestry byproducts, up to one hundred cubic meters year;
     4th. Retail trade which has the goods lubricants, LPG, palm
        industrialized, charcoal and tree fern, such as butchers, grocers, frutarias,
        supermarkets and other similar establishments.
how to register
Individuals or legal entities subject to Federal Technical Registry can only register via
internet site via the link IBAMA Rate Control and Environmental Monitoring
completing self-explanatory.
NOTE: Some categories depend, for the record, the technical analysis of the project's specific area of ​​IBAMA, based on the laws governing the activity, which may cause the requirement of specific documents.
ordering the suspension or cancellation of registration
Individuals or entities who temporarily suspend their activities, should
necessarily require the suspension of its registration with the Federal Technical Registry by
submission of an application addressed to the Executive Management of IBAMA, attaching, if applicable, the
competent document that proves the request.
NOTE: The Certificate of Registration does not absolve the individuals or entities listed in the Register
Federal Technical obtaining licenses, authorizations, permits, concessions, permits and other
documents required of organs federal, state or municipal governments to exercise their
activities
7 - How does CFEM?
Financial Compensation for Exploiting Mineral Resources, established by the Constitution
1988, in its Article 20, § 1, is due to the states, the Federal District, municipalities, and government agencies of the Union, as consideration for the economic utilization of mineral resources in their respective territories.
Who manages the CFEM?
The National Department of Mineral Production-DNPM competes download rules and exercising supervision over the collection of CFEM (Law 8.876/94, art. 3rd - section IX).
Who are the contributors of CFEM?
Financial Compensation is payable by whoever has mining activity due to
exploration or extraction of mineral resources.
The exploitation of mineral resources is the removal of minerals from mine, mine, salt or other mineral deposit, for purposes of economic exploitation.
When is due to CFEM?
Taxable event is the output of the Financial Compensation for sale of the mineral product of the areas of the mine, mine, salt or other mineral deposits. And yet, use, processing industrial mineral product or even its consumption by the miner.
Which focuses on the value CFEM?
Financial Compensation is calculated on the value of net sales, obtained during the
sale of the mineral product. It is understood by the net sales value of the sale of the mineral product,
deducting the taxes (ICMS, PIS, COFINS), which focus on marketing, as well as
transportation and insurance costs.
When there occurs the sale, because the product is consumed mineral, processed or used by
miner himself, then it is considered as a value for the calculation of CFEM, the sum of
direct and indirect expenses occurred by the time of use of the product mineral.
What are the tax rates applied to calculate the CFEM?
The billing rates applied on the liquid to obtain the value of CFEM, vary with the mineral substance.
Applies the rate of 3% for: aluminum ore, manganese, salt and potassium.
Applies the rate of 2% for iron, fertilizer, coal and other substances such as gravel, limestone, clay, sand, gravel, for example.
Applies to a rate of 0.2% for: precious stones, colored stones cuttable, metals and carbonaceous
noble.
Applies the rate of 1% for: gold.
What is the deadline for companies to effect the payment of CFEM?
Payment of Financial Compensation will be held monthly until the last day of the second month following the triggering event, duly corrected.
Payment is made through a bank, which is obtained in DNPM site. The illegal mining
mineral substance, ie without proper registration in DNPM, does not allow the issuance of guide