Although the country's territorial dimension is small, Portugal is historically known for being a 'mining country' with a very diverse and complex geology.
Given the overwhelming technological progresses and the growth of consumption of different types of goods that use minerals as raw material, as well as the fact that these are limited resources, it is imperative that the government provides a clear and transparent set of rules that allow national and foreign investors to decide, plan and implement profitable mining projects in Portugal.
The Portuguese legal system belongs to the family of the continental or civil law countries, which provides any interested party with the possibility of having prior direct knowledge of most of the applicable rules and statutes, sustained in written law.
The Portuguese Constitution (the primary and fundamental law, approved in 1976 and still in force)2 determines that mineral deposits, mineral-medicinal water springs and natural underground caves are public property.3 This mention in the Portuguese Constitution clearly demonstrates the importance of geological resources.
Portuguese legislation has been adjusted over time to provide an adequate framework for the exploration and exploitation of the country's geological resources.
Following the National Strategy for Geological Resources – Mineral Resources, approved by the Council of Ministers Resolution No. 78/2012, of 11 September, the current legal framework for the discovery and use of geological resources located in Portugal was enacted – Law No. 54/2015, of 22 June, and the previous mining legislation (from the 1990s)4 was revoked.5
Since November 2018,6 the mining industry has been administered by the Ministry of the Environment and Energetic Transition (MATE), who directly supervises the General Directorate for Energy and Geology (DGEG), the public body responsible for the conception, promotion and evaluation of energy and geological resources policies. This has been a clear sign of a new governmental approach, in which the goal to develop and satisfy the national extractive industry is to be balanced with strong environmental and sustainability concerns, at both a national and a regional perspective. As such, the Portuguese Environmental Agency (APA), the Nature and Forest Conservation Institute (ICNF) and the municipalities are relevant players in the mining sector in Portugal.
Bearing in mind that Portugal offers a steady and clear legal framework, political stability, and that foreign direct investment is not restricted under general Portuguese law, the most relevant mining companies in the world have invested in Portugal,7 considering it to be a 'low-risk' country, apart from the risk inherent to the mining activity itself. The mines of Neves-Corvo and Aljustrel (copper and zinc), Panasqueira (tungsten) and Barroso (feldspar and quartz, as well as lithium prospection) can be highlighted as significant examples.
According to recent information released by the Portuguese Institute of Statistics (INE), the mining sector represented around €900 million in Portuguese exports in January 2020, equivalent to 8.8 per cent of the total exports of Portugal.
In response to the number of applications for the exploration and exploitation of lithium mineral deposits in Portugal since 2016 – as a result of the increase in the worldwide demand for electric vehicles – the Portuguese government has clearly set this as a priority, and the State Budget for 2020 has reinforced the will to create a lithium cluster in the country.
In fact, Portugal is already Europe's largest producer of lithium, which accounts for less than 15 per cent of Europe's total consumption, with all of it being used for ceramics and glassware. By increasing extraction and making refinement and production processes more economically viable, Portugal might assume a leading role within this new market.
II LEGAL FRAMEWORK
The revelation and use of Portuguese geological resources can relate to different types of natural assets and is subject to both European and national legislation.
Law No. 54/2015, of 22 June, establishes the basis of the legal regime for the disclosure and enhancement of the existing geological resources in national territory, including those located in the national maritime space, and consists in a general regime for all types of geological resources. Decree-Law No. 88/90, of 16 March, specifically regulates the use of natural mineral deposits.8,9
Nevertheless, mining activity must comply with adjacent national and European legislation, as it affects different areas, such as industrial licensing, environmental impact, safety, security, workforce, among others. Therefore, it is important to take into consideration the following:
- Decree-Law No. 162/90, of 22 May, which approves the Regulation of Safety and Hygiene for Work in Mines and Quarries;
- Ministerial Order No. 897/95, of 17 July, which establishes the fees applicable to the licensing procedures;
- Council of Ministers' Resolution No. 11/2018, of 31 January, which approves the strategic guidelines for enhancing the potential of lithium minerals in Portugal;
- Order No. 2847/2017, of 5 April, from the Secretary of State for Energy, which establishes the mandatory audition of the local government in the procedures for acquisition of mining rights;
- Decree-Law No. 151-B/2013, of 31 October, amended by Decree-Law No. 152-B/2007, of 11 December, which transposes to the Portuguese internal legal order the European Directive 2014/52 and establishes the regulation for the environmental impact assessment (EIA) of public and private projects that may have significant effects on the environment;
- Decree-Law No. 75/2015, of 11 May, amended by Decree-Law No. 39/2018, of 11 June, which approves the single environmental licensing regime;
- Ministerial Orders No. 368/2015, of 19 October, and No. 395/2015, of 4 November, which establish the fees to be charged and the technical requirements and standards applicable under the EIA process;
- Decree-Law No. 10/2010, of 4 February, amended by Decree-Law No. 31/2013, of 22 February, which establishes the legal regime for the waste management of mineral deposits and mineral masses, and transposes to internal order Directive 2006/21/EC, of the European Parliament and of the Council, of 15 March;
- Decree-Law No. 147/2008, of 29 July, as amended by Decree-Law No. 13/2016, of 9 March, which establishes the legal regime of liability for environmental damages, applicable to the waste management of mineral deposits and mineral masses waste;
- Decree-Laws No. 376/84, of 30 November, 303/90, of 27 September (amended by Decree-Law No. 93/2018, of 13 November) and 139/2002, of 17 May, which contain the regulations on the commercialisation, manufacturing and use of explosives;
- Decree-Law No. 195/95, of 28 July, as amended by Law No. 71/2018, of 31 December, which establishes the specific legal regime for social security of mine workers; and
- Decree-Law No. 198-A/2001, of 6 July, which establishes the legal framework concerning the environmental recovery of degraded mining areas.
Presently, the MATE is the entity responsible for the main political and administrative decisions concerning mining activity, such as those made within the acquisition of mining rights and EIA procedures. These powers – licensing and granting of mining rights – can be delegated, by the Minister, in the Secretary of State of Energy (SEE), and the administrative procedure itself shall be held by the DGEG. However, there are other entities that have jurisdiction over the attribution of mining rights, such as Madeira's and Azores' autonomous regional governments, or that must be consulted in the process, such as the municipalities, but also the entities with jurisdiction over environmental protection, land management, cultural heritage, nature conservation, forests and hydro-agricultural uses.
III MINING RIGHTS AND REQUIRED LICENCES AND PERMITS
In Portugal, geological resources can be privately or publicly owned according to their nature. Therefore, mineral deposits, natural mineral waters, mining and industrial waters and geothermal resources, because of their rarity, natural and economic value, and the importance of their application in industrial processes are considered of public domain. The same classification is given to other geological resources that are of geological and mining relevance to the country, and to all the geological resources found in the bed and underground of the Portuguese national maritime space.
Conversely, mineral masses and spring waters, as well as other geological formations, structures or natural assets that do not have the above-mentioned necessary characteristics, can be privately owned.
When in the public domain, the property of these natural resources cannot be transferred to private parties. However, the state can – instead of directly exploring – grant private parties (applicants), through administrative contracts, the right to exclusively use them. The revelation and use of geological resources non-integrated in the public domain also need an administrative authorisation, through the attribution of a licence to the landowner or to a third party that has executed an exploitation contract.
i Surface and mining rights
According with Mining Law, geological resources integrated in the public domain may be subject to four different types of private use, that correspond to different stages of knowledge of the existent geological and mineral asset: (1) preliminary assessment rights, which aim to authorise the applicant to undertake the necessary studies and analysis to better understand the existing resources in the intended area; (2) prospection and exploration rights, for the development of activities, studies and analysis directed at the disclosure of the resources and the determination of their characteristics and evaluation of their economic value; (3) experimental exploitation rights, when the conditions for exploitation have not been met; and (4) exploitation rights for the purpose of conducting operations for the economic use of the resources, when the previously developed studies already allow for such confirmation.
The specific type of rights granted to the applicable entity, and requested by it if that is the case, should and will, therefore, be adjusted to the pre-existent knowledge regarding the resource and according with the private party's technical and financial capacity to develop and invest. All rights under an administrative contract for pre-assessment, exploration, experimental exploitation or concession of exploitation, are granted to the applicable entity on an exclusive basis; therefore, no incompatible rights (considering the object, nature and area granted) can be given to third parties during the term of the contract.
Each type of right can be acquired through a different administrative procedure, subject to different conditions and duration.
Pre-assessments rights are not transferable and can be granted for a maximum area of 15 square kilometres and for the limited period of one year, without extension. Upon the expiry of these rights, the applicant must inform DGEG of its ability to proceed to the next phase and request the granting of exploration rights, or if it is its intention to release the granted area.10
The attribution of these types of rights depends on a previous administrative procedure that starts with the submission of an application before the DGEG, where – among other details – the applicant must disclose its technical, economic and financial capability, the work plan, the technical and financial means and the budget they will apply to reach the proposed goals. Once approved, these will be the conditions for the maintenance of the granted pre-assessment rights.
According to Law No. 54/2015 and Decree-Law No. 88/90, granting exploration rights may depend either on a direct application (proposal) or a public tender. The decision on the procedure to adopt belongs to the central government (i.e., MATE). However, when the procedure is triggered based on the applicant's initiative, the filing of another application with the same object by a third party, within the period legally established for that purpose, determines the opening of a public tender by the DGEG, with the first applicant having pre-emptive rights on equal terms.11
On the individual proposal, the applicant has to indicate the mineral substances they are applying for, the intended area – which cannot exceed 500 square kilometres12 or 5,000 square kilometres if the granted area is located on the Portuguese maritime space – the general work plan, the volume of investment envisaged and how it is financed for such purpose, as well as present evidence of their technical and financial suitability.
If the application is accepted after a preliminary analysis, the DGEG will notify the applicant to provide a provisional guarantee and, once that is secured, to proceed with the publication of a notice in the official law journal, as well as in the newspaper of the head office of the municipality where the intended area is located, and in two newspapers of large circulation, one in Lisbon and the other in Oporto, with an invitation for the submission of complaints within 30 working days.13
After this public consultation, the DGEG can ask for complementary information regarding the application, after which it will prepare the final process information to be shared with the mayors of all of the municipalities covered by the request or application, for them to issue their formal opinion on the matter.14
DGEG's final information and the municipalities' opinion will then be sent to the MATE for a final decision – or to the SEE if the powers are delegated – and if such decision is favourable, the procedure will proceed to the signing of the contract.15 This contract will establish the conditions for the exploration and can also determine some of the conditions for the exploitation phase.
Exploration rights can be granted for a maximum period of five years, with an initial three-year period that may be extended for two more years.16 The extension is subject to the compliance with the conditions set in the signed contract, such as the mandatory work and investment plans, the deadlines for each phase of the work plan, the financial charges of the exploration activity and the periodic submission of activity reports to the DGEG. The applicant is requested to provide a bank guarantee to ensure the performance of the contract and must initiate the work until the term of a six-month period (usually this period is reduced to 60 days in the contract).17
Exploration rights may only be granted for available areas, unless there is no incompatibility with the activities corresponding to operating concessions already allocated or in the allocation procedure. Available areas are the areas of the national territory over which exclusive rights do not apply to geological resources integrated in the public domain of the state.
Upon the expiry of the term of the exploration contract, the applicant has the right to apply to the corresponding experimental exploitation rights or to ask for the concession of exploitation rights.
The application for the concession of exploitation rights may be carried out for an area covered by a contract for prospecting and exploration, for experimental exploitation, or directly for an available area, or for an area that, if it is covered by prospecting and research rights, does not involve the same substance of the mineral deposit and there is no incompatibility. It may also be granted as a result of a public tender.
The procedure to obtain experimental exploitation rights or exploration rights follows the same steps established for the application for exploration rights and is subordinated to the same mandatory hearings (e.g., public consultation, municipalities, administrative and environmental hearings). However, if the project is covered by the EIA regime, the licensing will only take place upon the issuance of a favourable environmental impact statement.18
The experimental exploitation rights can only be granted for a maximum of five years19 and its sole purpose is to obtain additional information of the existing resource.
Conversely, the exploitation rights entitle the applicant to exploit resources in accordance with the law and the respective contract and to market all products resulting from the exploitation and can last up to 90 years (nevertheless, the Portuguese state normally establishes a duration of 50 years).
The application for these types of mining rights must include, among other information, the intended area, the characterisation of the mineral deposit, the Mining Plan (exploitation plan), the Environmental and Landscape Recovery Plan (PARP), the Waste Management Plan, the Safety and Health Plan, and the Pre-Viability of Exploitation Study. These plans, in their final versions, approved and accepted by DGEG and the state, alongside a financial guarantee that must be provided by the applicant, will be part of the conditions that must be complied with during the development of the exploitation activity.
Regardless of the specific type of mining rights granted, the applicant is legally required to keep confidential all technical and financial data obtained during the pre-assessment, exploration or exploitation activities.
Exploration and exploitation rights may be transferable to a third party. However, that transference is never automatic, depending on authorisation of the MATE. In the case of dissolution of the legal entity to which the rights were granted, only the asset value is transferred.
A mortgage can only be lodged over the exploitation rights or over the exploration annexes or infrastructures as a guarantee for credits intended for exploration work, but the security shall be notified in advance to the DGEG.
The mining rights are granted through administrative contracts concluded with Portuguese state, according with the mining laws and the Portuguese Public Procurement Code. Therefore, in case of a contractual breach by the state, the private party has the same rights as those recognised under other types of administrative or public contracts, being able to – through judicial means – force the execution and compliance of the contract or claiming a compensation in case of breach.
ii Additional permits and licences
Under Law No. 54/2015, attribution of mining rights may depend on additional permits and licences, issued by other entities, such as administrative entities or environmental entities with jurisdiction over the territory; namely, because of environmental protection, landscape recovery, spatial planning, hygiene, and health and safety. This is also applicable if the activities of disclosure and exploitation of geological resources were to take place in the national maritime space, in which case the respective title of private use is demanded.
The concession of exploitation rights normally depends on an EIA.20
These entities can be the municipalities whose territory is affected by the granted area, APA, ICNF, Coordination and Regional Development Commission (CCDR), among others.
On the other hand, once the mining rights are granted, the applicant will have the right to temporarily use the soils and lands that are necessary for the mining activities (pre-assessment, exploration, exploitation). For such purpose, the applicant will have to obtain all the necessary permits before the landowners and pay them the due compensations.
If no agreement is reached with the landowners, Law No. 54/2015 recognises the applicant entitled with exploration and experimental exploitation rights, the right to ask the government for the constitution of an administrative easement on the buildings covered in the granted areas. The concessionaire of exploitation rights has the right to request the expropriation of the necessary land. They can also express preference in the purchase of any rustic or urban land within the defined concession area.
Within the Portuguese territory and social context, the legal framework regulating vacant and community managed lands assumes relevance.21
iii Closure and remediation of mining projects
According to the terms of the contract and the law, the concessionaire of mining rights will have the obligation to undertake remediation and recovery works once the activity ends. The concrete terms of this recovery must be proposed by the applicant in their application, as they are required to submit a PARP before DGEG. In addition, these requirements for closure and remediation of the mining project will be assessed and approved within the EIA process.
The concessionaire will also be obliged to post one or more financial guarantees to ensure compliance with the contract, namely with the established terms for the landscape recovery of the covered area.
IV ENVIRONMENTAL AND SOCIAL CONSIDERATIONS
i Environmental, health and safety regulations
As mentioned above, the attribution of any rights over geological resources is preceded by a mandatory consultation of, namely, the municipalities whose territory is affected and other relevant entities concerning environmental protection.
The main environmental regulations to be considered within the mining activity refer to the Portuguese environmental impact assessment legislation and to the European ecological network – Natura 2000 – legislation.22 These legal acts have the intention of protecting biodiversity, through the conservation or restoration of natural habitats, wild flora and fauna and species control.
There is a specific legal regulation concerning waste management of mineral deposits and mineral masses that must be considered,23 as well as the related legal regime of civil liability for environmental damages applicable to this waste management. The facilities connected to this type of waste are subject to a licensing procedure, to be pursued before the DGEG, within the approval of the 'mining plan'. The holder of mining rights must prepare a sustainable waste management plan and review it every five years.
Concerning Health and Safety regulations in the mining sector, one must have in mind, in addition to the legal regime for the promotion of health and safety at work,24 the provisions of the General Regulation of Safety and Health at work in Mines and Quarries.25 This legal instrument imposes certain obligations – on both the employer and the employees – to prevent professional hazards and to promote health and hygiene within mines and quarries. Ordinance No. 198/96, of 4 June, also regulates the minimum safety and health requirements in open and underground sites of the extractive industries (e.g., emergency exists, dangers zones).
Decree-Law No. 50/2005, of 25 February, must also be highlighted. It refers to the minimum safety and health requirements regarding the use of work equipment, and to Decree-Law No. 24/2012, of 6 February (in its latest version), which consolidates minimum requirements for the protection of workers exposed to chemicals at work.
ii Environmental compliance
According to the Portuguese legal framework of the EIA, this assessment must be carried out in all public and private projects that may have significant effects on the environment.
Regarding mining projects, the law states that an EIA is mandatory when the area of the open-cast mine exceeds 25 hectares or when there are peat extraction projects in an area that exceeds 150 hectares.
An EIA may also be required when the mining projects are partially, or totally located in a sensible area and can potentially cause a significant environmental impact because of their location, dimension or nature. It may also be required if the competent public authority considers that the mining projects are likely to cause a significant impact on the environment even though they do not exceed the above-mentioned limits and are not located in sensible areas. A thorough environmental impact study will be required to determine all the direct and indirect effects of the project on the environment and to recommend adequate measures to minimise or annul those effects.
The most relevant administrative authorities involved in the EIA procedure are the licensing entity (DGEG) and the EIA authority – which can be either APA or CCDR.
It is relevant to clarify that the decisions concerning the EIA are prior to the licensing or authorisation of the projects. But it also very important to make clear that the attribution of exploration rights is not dependant on an EIA, as it is only demanded when in the context of exploitation rights.
An environmental licence – according to Decree-Law No. 127/2013, of 30 August – may also be required, to prevent or reduce air, water and soil pollution, as well as waste production.
Both the EIA and the aforementioned environmental licence are processed within the 'single licensing environmental regime', which aims at articulating all the legal regimes involved and therefore simplifying the procedures of environmental licensing, concluding in the emission of a single environmental title (a document containing all the relevant information about the environmental licences of the project or activity).26
The timeline to conclude the above-mentioned procedures is variable, but a minimum time frame of six to 12 months is the norm.
iii Third-party rights
In Portugal there is no mandatory process for addressing third-party rights.
However, the bearer of mining rights will have inherent rights over the lands in which the mining projects are to be developed, namely the one to temporarily use the land required for the work and the implementation of the respective facilities. Therefore, it will have to pay compensation to third parties for any damage caused by the exploration and exploitation activities and provide all security, environmental protection and landscape recovery measures.
iv Additional considerations
The authorisations, conditions or restrictions to mining activities will depend on the location, area and type or works to be promoted.
In some areas, such as protection zones of natural mineral and spring water, protected areas of natural parks or demarcated regions (e.g., vineyards, rivers), there are specific regulations that might restrict or forbid certain types of works and activities.
The municipalities, ICNF and CCDR have a fundamental role in issuing their opinions on these restrictions.27
The social licence to operate, regarding the approach of local communities, clarification of the exploration and exploitation purposes, methods and contribution to local economic, social and environmental welfare, is a very important issue to be addressed.
V OPERATIONS, PROCESSING AND SALE OF MINERALS
i Processing and operations
The importation of equipment and machinery for use in mining activities is not subject to special restrictions, other than those related to the security of people and assets.
During the activity, the concessionaire has to make use of the resources in accordance with the appropriate technical standards and in harmony with the public interest of the best use of these assets, and cannot proceed with the mining activity in a way that compromises the best economic use of resources.
The use of foreign labour in mining activities in Portugal is subject to the same restrictions as in any other activity. As such, it must comply with the conditions and procedures for the entry, stay, departure and removal of foreign citizens from Portuguese territory, established by Law No. 23/2007, of 4 July, as amended by Law No. 28/2019, of 29 March.
To legally work in Portugal, non-EU citizen must have a residence permit with the purpose of work. This type of permit can have three different purposes:
- to live and work in Portugal as an employee with an employment contract, which demands that the job vacancy exists and that it has not been filled by a Portuguese or European Union national, by citizens of countries with special agreements with Portugal and by foreigners who live in Portugal with valid residence permits;
- to live and work in Portugal as an employee with an employment contract in a highly qualified activity; and
- to live and work in Portugal as self-employed or as an entrepreneurial immigrant.
ii Sale, import and export of extracted or processed minerals
The commercialisation or valorisation of the exploitation products, originating from authorised mining activities, is subject to inspection.28 Conversely, export, sale or any form of transmission of products, even free of charge, that are not from authorised exploitations or legally imported holdings is prohibited. In any case, the exportation of ores must also follow all the applicable European legislation and treaties.
On the other hand, the exportation of ores or lands obtained during the exploration activities may be allowed by a member of the MATE, if for industrial analysis or testing.
European legislation establishes some restrictions to the importation of some minerals. For example, EU Regulation (EU) 2017/821, of the European Parliament and of the Council, of 17 May 2017, lays down supply chain due diligence obligations for EU importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas. This EU Conflict Minerals Regulation, of which most of the legal provisions will come into force on 1 January 2021, applies to conflict minerals, so it will 'only apply directly to EU-based importers of tin, tantalum, tungsten and gold – whether these are in the form of mineral ores, concentrates or processed metals' – but also intends to 'promote the responsible sourcing of smelters and refiners of tin, tantalum, tungsten and gold, whether they are based inside the EU or not'. European companies will have to ensure, through a due diligence process, that they import these minerals and metals from responsible sources only.
iii Foreign investment
There are no restrictions to foreign investment in mining companies or mining projects in Portugal, neither is that type of investment subject to prior governmental review or approval. Foreign companies are subject to the same administrative procedures as Portuguese companies and must comply with the same criteria and must recognise the same rights and obligations during mining activities.
In the context of mining projects, Law No. 54/2015 states that geological resources exploitation is subject to payment of 'exploitation charges'.
This payment is negotiated and defined in the concession contracts signed with the Portuguese state, using liquid exploitation annual results or the value of the resources 'at the mine gate' as a reference. Current practice is that the state has the discretion to choose between these two alternative calculations, usually following the higher value criteria: a percentage of the net smelter return on sales (usually up to 10 per cent) or of the mine head value of the mining products (3.5 per cent to 5 per cent).29
It is usually paid on an annual basis, being destined to support geological resources management – namely, through furthering knowledge of it – and may also be used to support social responsibility projects.
These charges might also include prizes to be paid by the concessionaire and fixed values determined according to the geological potential of the granted areas.
Corporate income tax (IRC) is a tax levied on profits derived by both resident and non-resident entities. Resident entities (with head office or effective place of management in a Portuguese territory) are generally subject to taxation on worldwide profits. Non-resident entities with a permanent establishment in Portugal are subject to corporate tax on the profits of their permanent establishments in a Portuguese territory. Non-resident entities are only taxed on Portuguese-sourced income.
IRC is levied at a 21 per cent rate, to which may be added a municipal surtax of up to 1.5 per cent levied on taxable profits (depending on the municipality), as well as a state surtax of 3 per cent on taxable profits exceeding €1.5 million and up to €7.5 million, 5 per cent on taxable profits exceeding €7.5 million and up to €35 million, and 9 per cent on taxable profits exceeding €35 million. This means that the nominal tax rate may reach 31.5 per cent.
A special reduced IRC rate (of 17 per cent on taxable profits up to €25,000) is available for small and medium companies (with a turnover below €50 million among other criteria).
Tax incentives are available for investments of at least €3million, executed until the end of 2020, which are considered relevant for the development of business sectors that are important for the national economy and the reduction of regional asymmetries, enhancing technological innovation and national scientific innovation or employment creation. These incentives may include a 10 to 25 per cent corporate income tax credit and an exemption from a multiplicity of taxes.
Since the implementation of the EU internal market, goods can circulate freely between Member States. For non-EU goods, all Member States apply the common customs tariff (CCT) and the revised European Union Customs Code. As such, Portugal uses the harmonised nomenclature and classification system (HS) present in the CCT, where Section V is devoted to mineral products and its Chapter 26 specifically refers to minerals, determining the exemption of duties.
iv Other fees
Aside from the above-mentioned exploration charges and indemnification payments, namely for environmental and landscape restoration, Ordinance No. 897/95 currently establishes the fees due for contracts and activities related to geological resources exploration and exploitation to be charged to the holder of the mining rights. Fixed annual fees per area (km2) might also be contractually established.
VII OUTLOOK AND TRENDS
The growing number of applications for the exploration of lithium, in Portugal, in the past two years, has not been ignored by the government.
Following the aforementioned Lithium Group report, in 2018, the Council of Ministers approved Resolution No. 11/2018, of 31 January.
This legal instrument defines the strategical guidelines for lithium exploitation in Portugal, focusing primarily in the geological knowledge of our territory and determining that exploration and exploitation rights will be granted through public tender considering predefined areas.
It is also expected that the new Law, which will regulate Law No. 54/2015, of 22 June, and revoke Decree-Law No. 88/90, of 16 March, enters into force until the end 2020 .This legal framework is a major step for the Portuguese mining sector, as this adjustment of 1990s legislation has been awaited for a long time.
1 Joana Silva Aroso is a partner and Olinda Magalhães is an associate lawyer at JPAB – José Pedro Aguiar-Branco Advogados.
2 With seven amendments – 1982, 1989, 1992, 1997, 2011, 2004 and 2005 – many being necessary for articulation with European Union and International Treaties' rules.
3 Article 84 of the Portuguese Constitution.
4 Decree-Law No. 90/90, of 16 March.
5 Portuguese legislation referring to the mining sector is currently under revision. A date of 31 July 2020 was determined as the deadline of the public consultation period referring to the decree-law that will regulate Law No. 54/2015, and a new National Strategy for Geological Resources is expected to be presented within a two-year period.
6 Decree-Law No. 90/2018, of 9 November.
7 There are currently 63 active mining concessions in Portugal (5 metalic ore and 58 industrial minerals; 668 quarries; 32 water concessions (spring and mineral waters) and 52 thermal concessions (water thermal and geothermal), according to the provisional data referring to 2019 provided by DGEG in www.dgeg.gov.pt.
8 The revelation and use of other geological resources are regulated by Decree-Laws No. 84/90 (spring water), 85/90 (industrial mineral waters), 86/90 (mineral water), 87/90 (geothermal resources), all of 16 March; 270/2001, of 6 October, amended by Decree-Law 340/2007, of 12 October, concerning mineral masses (quarries) and, finally, 109/94, of 26 April, amended by Law No. 82/2017, of 18 August, concerning the exploration, exploitation and production of oil.
9 The Portuguese government's proposal for a new decree-law that will regulate the Law No. 54/2015, of 22 June, and replace the Decree-Law No. 88/90, of 16 March, was in public consultation until 31 July 2020. This diploma changes several aspects of the administrative procedures and the tenders for the allocation of rights of use and revelation of geological resources, as well as listing the matters that must be regulated by the administrative contracts to be signed by the parties. It also deals with the marketing and transit of minerals, the limitations to private property inherent in the allocation of private rights over these resources, the financial guarantees and the exploration charges and, finally, the monitoring and the inspection of the private parties' activity and the sanctioning regime. This legal diploma is not yet approved, so its determinations can and will, probably, change until final approval and implementation.
10 According to the new Decree-Law's proposal, the number of contract proposals and pre-assessment contracts is limited to one per applicant and per NUTS II statistical units on the continent. This type of right is non-transferable.
11 According to the new Decree-Law's proposal, two requests are considered to overlap whenever, until the end of public consultation or participation period for one of the applications, another one is submitted to DGEG with total or partial coincidence of areas and with the same object.
12 Also according to the new Decree-Law's proposal, the realisation and execution of the prospection and research works will be forbidden within a minimum perimeter of 1 km around urban agglomerations and rural areas, in the bed and margins of surface waters, as well as in the interdiction perimeters identified by the consulted entities that may be accepted by DGEG.
13 Public participation is one of the most important aspects of the new Decree-Law's proposal. All persons, whether natural or legal, including associations representing environmental, economic, social and cultural interests, have the right to participate in the procedures for the attribution of use or revelation rights, and have the right to access all the information available and to formulate suggestions. According to the new Decree-Law's proposal, DGEG can order the applicant to promote in each of the municipalities covered by the application, and prior to the opening of the public participation period, the holding of public clarification sessions.
14 In the new Decree-Law's proposal, the hearing of the municipalities takes place prior to the public consultation period. After the preliminary assessment of the application is completed, DGEG must promote the mandatory consultation of the municipalities in whose territory the requested area is located, of the LNEG (The Energy and Geology National Laboratory), and of all the competent entities according to territorial conditions, restrictions or easements of public utility covered by the application. The opinions issued by the municipalities are binding. However, they do not have a binding opinion in the case of a public tender.
15 According to the new Decree-Law's proposal, in this phase a new hearing of the municipalities will take place. They will now have the opportunity to pronounce about the concrete terms of the contract.
16 According to the new Decree-Law's proposal (Annex II), this deadline is still a five-year total.
17 This six-month period remains in the new Decree-Law proposal.
18 According to the new Decree-Law's proposal, DGEG must consult the environmental impact assessment authority about the need to perform this procedure (EIA), even when the project is not covered by the EIA regime, and regardless of whether it is located in a sensitive area or not.
19 According to the new Decree-Law's proposal (Annex II), this deadline is still a five-year total.
20 Also in this case, according to the new Decree-Law's proposal, DGEG must consult the environmental impact assessment authority about the need to perform this procedure (EIA), even when the project is not covered by the EIA regime, and regardless of whether it is located in a sensitive area or not.
21 Law No. 75/2017, of 17 August.
22 Respectively sustained in Decree-Law No. 151-B/2013, of 31 October and Decree-Law No. 140/99, of 24 April, in their last versions.
23 Decree-Law No. 10/2010, of 4 February.
24 Decree-Law No. 102/2009, of 10 September, modified and republished by Law No. 37/014, of 28 January, with recent adjustments by the Law No. 28/2016, of 23 August.
25 Approved by Decree-Law No. 162/90, of 22 May.
26 Approved by Decree-Law No. 75/2015, of 11 May, recently modified by Decree-Law no. 119/2019, of 21 August.
27 As previously mentioned, the new Decree-Law proposal gives the municipalities an important role, considering their opinion as binding when partially or totally unfavourable.
28 According to the new Decree-Law proposal, DGEG can request the contracts concluded for the sale of products resulting from the exploitation of mineral deposits and any other elements deemed necessary for the legal and economic evaluation of the streaming.
29 However, the new Decree-Law proposal sets new rules on this matter, determining that the annual amount of the exploitation is determined in the contract, but sets as a minimum negotiation standard 3 per cent of the head value of the mining products at 'the mining gate'. This percentage might be reduced to 2 per cent of the gross revenue of the final product sales value, when the concessionaire is also a shareholder in a company that promotes the industrial treatment of mining products in Portugal.