Brazil Said to Limit Mine Rights for 35 Years (Update1)

March 8 (Bloomberg) -- Brazil may limit companies to explore mines for 35 years as it seeks to increase domestic output of minerals and fertilizers, such as iron ore and potash, according to a government official familiar with the situation.

Companies may be allowed to renew the mine licenses for an additional 35 years under some circumstances, the person said, declining to be identified because the proposed changes have not yet been made public. Under current legislation, mining rights in Brazil never expire, allowing companies such as Vale SA to hold deposits without exploring them, according to the official.

Brazilian President Luiz Inacio Lula da Silva is seeking to make the country self-sufficient in fertilizers within 10 years and increase domestic output of metals products such as pig iron and steel rods, the official said. The changes follow Lula’s efforts to boost state control over offshore oil reserves and Petroleo Brasileiro SA after the company’s discovery of the Tupi field, the biggest oil find in the Americas since 1976.

The new code, designed by the Energy Ministry, includes the creation of a regulator to oversee mining rules, the official said. Lula will receive the new rules this month for approval, before sending to Congress, according to the official.

Energy Minister Edison Lobao plans to discuss the new regulatory framework at a press conference tomorrow, the Energy Ministry said in a statement sent by e-mail to Bloomberg News.