The management of a mining law right in the development phase is complex, and there may be moments when pausing an administrative proceeding becomes necessary. However, confusion between terms like Stay of Proceedings and Temporary Suspension—and, primarily, the ignorance of the obligations that accompany the pause—can lead to severe infraction and, ultimately, the forfeiture of the title.
It is essential to understand that these mechanisms are not the final penalty. The breach of the rules associated with them is the infraction that may actually result in the forfeiture or Cancellation of the mining title.
In this article, we will focus on the concept of Stay of Proceedings, the administrative pause that is imposed on the proceeding, and its application in the assessment of the mineral deposit.
The Stay of Proceedings: The Technical Pause in the Administrative Proceeding
The Stay of Proceedings is a technical-legal term referring to the temporary and formal paralysis of the progress of an administrative proceeding or the making of a formal decision. At the National Mining Agency (ANM), it has its most critical application in the evaluation of a project’s feasibility after the exploration phase.
By nature, the Stay of Proceedings is always temporary. It must be formalized by a determination of the ANM and registered in the Electronic Information System (SEI).
Application in the Final Exploration Report (RFP)
The most notable example is the Stay of Proceedings of the decision on the Exploration Report (RFP). It occurs when the study of technical economic feasibility of development is not characterized at the moment. The ANM analyzes the feasibility based on resources, costs, freights, a conceptual mine plan, and a simplified cash flow.
If the deposit is considered exploitable, the titleholder has one year to request the Development Concession. However, if the temporary impossibility of feasibility is characterized, the Stay of Proceedings is applied.
Stay of Proceedings Due to Temporary Impossibility of Feasibility
The Stay of Proceedings is used by the ANM to allow the titleholder to re-adapt. In these cases, the Agency acts as follows:
- Fixing a New Deadline: The ANM fixes a deadline for the titleholder to submit a new updated study, demonstrating the change in market conditions and the new feasibility of the venture.
- Maintenance of Encumbrance: The area linked to the proceeding remains encumbered (unavailable) for new applications, preserving the right of the original titleholder.
- Final Consequence: If the feasibility is not demonstrated within the new fixed deadline, the ANM may file the proceeding (closing) or place the area in availability if the Agency understands that a third party could make the development feasible under different criteria.
The non-compliance with the requirements within the established deadline invalidates the right and may lead to the filing of documents or the availability of the area. Attention to the deadline fixed is critical to avoid the procedural error that would culminate in the loss of the asset.
Conclusion
In synthesis, the Stay of Proceedings is the procedural tool that pauses the analysis of the granting process, giving the titleholder a second chance to demonstrate the economic feasibility of their project. Aptitude is a condition subject to review.
The next blog will address the Temporary Suspension, which pauses the physical operations of the mine and the critical maintenance obligations that must be met to avoid severe infraction and the initiation of the forfeiture process of the title.
Canva/Edition by ÍGNEABR
