November 4, 2016 / 6:06 PM / in 2 years

REFILE-Brazil's new geology chief aims to simplify rules to spur mining investment

(Corrects typographical error in headline to make it “simplify” instead of “simply”)

By Stephen Eisenhammer

BRASILIA, Nov 4 (Reuters) - Brazil is looking to revive investor interest in its mining industry by simplifying the system for acquiring areas for exploration and improving access to geological information, the new head of the mineral geological survey said in an interview on Friday.

Eduardo Ledsham, previously executive director of exploration and new projects at iron ore major Vale SA , said his goal was to bring a degree of security and transparency to a sector that has suffered from falling commodity prices and a sense of high political risk.

“It’s a movement to break the ice that has frozen the mining sector in Brazil since 2012. ... To show that it is open to investment,” Ledsham said in the Brasilia offices of the government agency he joined in August, known as the Research Company of Mineral Resources, or CPRM.

The first stage of this process is four exploratory areas made available as part of a broad program focused primarily on selling concessions for infrastructure like roads and railways.

Published in the Official Gazette on Thursday, the four mining projects are: a phosphate prospect on the border of Pernambuco and Paraiaba states; a coal area in Rio Grande do Sul; a copper deposit in Goias; and a mixed deposit of copper, lead and zinc in Tocantins.

Ledsham, no stranger to the road from his 30-year career at Vale, is busy traveling to rally interest among foreign investors. His business card, notably for what was once a very inward-looking part of Brazil’s Ministry of Mines and Energy, has a side in English.

Having already visited Peru, he is traveling to London at the end of the month and to Canada in March.

Bids for the four areas will be decided in the second quarter with winning companies selected by whichever commits to invest the most in exploration. There are no upfront costs for acquiring the areas.

“There’s been a lot of interest, particularly among specialist mining funds. ... We’re aiming to attract more juniors too,” Ledsham said.

A shifting focus to small- and medium-sized companies is a stark departure for a country that has long been fertile ground for some of the world’s largest miners but a difficult environment for juniors due to complicated bureaucracy.

In addition to the four areas, Ledsham is looking to sell the rights to a further 22,000 smaller and higher-risk areas in 2017. The plan is to sell 8,000 areas in the first quarter.

The sales, for mostly symbolic sums, will focus first on gold, copper and zinc and be managed by the National Department of Mineral Production (DNPM), but using geological surveys from the CPRM.

A new partnership signed between the two departments, which for many years had a poorly functioning relationship, aims to revive closer collaboration to improve the process for investors entering the mining sector.

“Brazil has 30 percent of the mining investment per square kilometer of countries like Canada and Australia,” Ledsham said. “That’s something we’re trying to change.” (Reporting by Stephen Eisenhammer; Editing by Jonathan Oatis)

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