Session 11

Mining royalties – challenges and opportunities to achieve the Sustainable Development Goals and intergenerational equity in the peripheral mining regions
Maria Amélia Rodrigues da Silva Enríquez1,2, João Gustavo Gouveia Loureiro1,2
1Brazilian Society for Ecologic Economics -ECOECO, Brazil; 2University Federal of Pará – UFPA

As consideration for the usufruct of mineral resources, large revenues (royalties) return to the government coffers. In Brazil, these royalties mainly benefit the mining municipality. Denominated Financial Compensation for Extraction of Mineral Resources (FCEM), has no binding obligation and only two restrictions on use – non-payment of debt and hiring staff. Given the impermanence of mining and these incomes, there is a need to manage them so that they can serve as means to succeed the exhaustible mineral wealth and increase local net benefits. However, this opportunity is often overlooked, since there is a lack of mechanisms to ensure the correct use of these incomes, in order to create a sustainable agenda for the region. The Sustainable Development Goals (SDGs), by proposing an agenda focused on equitable, socially inclusive and environmentally sustainable development, show the direction to where the FCEM investments should be conducted. The main issue proposed is whether there are concrete possibilities for the mineral royalties in Brazil to be destined to a SDGs agenda and, consequently, promote intergenerational equity in mining-based regions. For this, it will serve as a case study Canaã-dos-Carajás, mining municipality of the Brazilian Amazon, which houses the largest iron ore mine on the planet. Starting the new project operation, it is estimated that the municipality will become the main collector of CFEM in the country, collecting approximately US$ 65 million, in 2017. From the survey of secondary data and field research, with selected stakeholders, it could be seen that FCEM incomes do have this potential, however, formal and informal rules of use and enforcement mechanisms are weak, notwithstanding the considerable progress that has been achieved so far. The paper concludes by presenting suggestions to reinforce the institutional possibilities of these incomes to be used to strengthen the SDGs.