On December 01, 2022, Brazil’s National Mining Agency (“ANM”) published ANM Resolution No. 122, which regulates the administrative sanctioning process of the mining sector, establishing procedures, parameters and amounts for sanctions applicable in the event of non-compliance with mining regulations.
The Resolution, which was not preceded by a Regulatory Impact Analysis (“RIA”), was the topic of two public hearings held on September 11, 2022, and November 28, 2022.
In line with the changes introduced by Law No. 14,066/2020, 12 kinds of penalties are now established (whether a monetary fine or not). The fines, which can be applied separately or added to other penalties, were divided into eight different groups and five degrees of severity.
The amount of the fines can vary from BRL 2,000.00 to BRL 1 million, which represents an exponential increase to the previous maximum amount established through Resolution 93/2022 (about BRL 4,091.27, except for infractions related to the Mineral Water Code).
Several aspects of the new Resolution are concerning for the industry, in particular the absence of an RIA before the Resolution’s publication. Such aspects were brought to the attention of the ANM during the public hearings, but some of the concerns were not addressed in the final version of the Resolution.
In an attempt to enable a smoother regulatory transition, the ANM established a 60% reduction in the calculation bases for violations in Groups I and II, provided that the severity of such violations classifies as level four or lower. However, despite the establishment of such reduction, the significant increase in the value of the fines will undoubtedly impact the sector.
The full text of ANM Resolution No. 122 can be accessed here.
Demarest’s Mining Law team is available to assist you in assessing the impact of the Resolution and to provide any further clarifications that may be necessary.
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