Strike by Brazil mining regulator staff starting to cause industry fears

The functioning of Brazil’s mining regulator (ANM) has been affected by a strike for more than a month with temporary work stoppages that are causing growing concern among industry executives.

Among the key demands of the agency’s union (ASANM) are increasing staff to 2,121 as mandated by law and higher salaries.

"ANM has a small staff of only 664 to handle the many tasks that we have. When created it was expected to have at least 2,121 employees," ASANM head Ricardo Peçanha told BNamericas.

Salaries for ANM workers tend to be 30-40% below those at the country’s other 11 regulatory agencies, according to Peçanha, who is a senior geologist at ANM. 

This week ASANM stepped up its pressure with a total work stoppage during three days (Tuesday-Thursday), an action that alarmed some executives.

Today’s strike could have a major impact on the sector next year as many exploration-related investments are paralyzed due to the lack of new authorizations, Luis Mauricio Ferraiuoli Azevedo, president of the Brazilian association of mining exploration companies (ABPM), told BNamericas. 

ANM was created in 2017 to replace the mining department, which did not have regulatory powers. 

ASANM has called on both the federal government and congress for more funds, and has criticized local governments for diverting CFEM mining tax revenue that should go to ANM.

Among the key functions performed by ANM staff is inspection of conditions at tailings dams and CFEM collection.

Mining sector revenue amounted to 250bn reais (US$52bn) last year, generating 7bn reais through CFEM.

Sector support

The government is evaluating a series of measures to support the sector’s long-term development, especially on the exploration and financing side.

Support for greater exploration activity will be a key focus as it could have a major impact on employment and revenue generation, said Vitor Saback, geology secretary at the mines and energy ministry, during an event for small and medium-sized mining firms.

The government is also looking at new financing mechanisms to support early-stage projects and SMEs.

“We understand that the sector can generate another 2.5mn jobs if we double financing, with the help of small and medium-sized miners who have much stronger job creation," said Saback, without providing details on the financial instruments that the government is considering.

According to Azevedo, the government has spent years discussing measures to create specific credit lines for SMEs and early-stage projects, but without major advances. "I would say that we’re advancing and reaching a new level of maturity in the discussions with the government," he said.

Brazil’s mining sector has more than 7,300 companies with the great majority being SMEs. Only 72 are classified as large companies that generate annual revenues above 300mn reais.