Minas Gerais wants mining royalties to be used for education.

Minas Agency - Governor Antonio Anastasia announced this Thursday (18) that the Government of Minas Gerais will propose allocating to the Education sector all the additional resources that will be collected by the State due to the new rules of the mineral sector. The estimate is that, once the increase in mining royalties is approved, as foreseen in the project that is under discussion in the National Congress, the state coffers will have an extra collection of at least R$ 300 million per year. This amount, which will represent a permanent source of revenue for the education sector in Minas, should increase over the years.

The announcement was made at the Tiradentes Palace during a meeting between the governor and leaders of representative entities of state education employees, scheduled to analyze priority issues in the sector in Minas Gerais. "Minas Gerais will allocate 100% of the additional resources collected by the state government as a result of changes in mining sector legislation to education, as soon as these changes are approved," stated Anastasia.

The governor said he will ask the Minas Gerais delegation to ensure that the bill currently being processed in the National Congress guarantees the allocation of additional mining revenues to the education sector. He also pledged to lobby the National Congress to ensure that the new regulatory framework for the mineral sector is approved in 2013, so that the education sector in Minas Gerais can receive the additional funding increase next year.

"This initiative aims to demonstrate unequivocally that education is a very important priority for the Government of Minas Gerais. It adds to the great effort that the State has made in recent years to value professionals in the field and improve the quality of public education," explains the governor.

During the meeting at Tiradentes Palace with representatives from six organizations representing state education system employees, the governor of Minas Gerais also reiterated his support for linking pre-salt royalties to the areas of education and health, which are also under discussion in the National Congress.

New regulatory framework for the mining sector

In addition to the bill on the distribution of pre-salt resources, there is also a bill under consideration in the National Congress, under urgent procedure, that establishes a new regulatory framework for the mineral sector and provides for changes to the rate of the Financial Compensation for the Exploitation of Mineral Resources (Cfem).

The CFEM tax rate, which currently ranges from 0% to 3% on net revenue, should reach a maximum of 4% on gross revenue, according to the bill. If the proposal is approved, there will be more financial resources for mining states and municipalities.

As the largest mining state in the country, responsible for more than 50% of Brazil's mineral production, Minas Gerais has been fighting for several years for a review of the regulations governing the sector. Now, Governor Anastasia's battle will be to get the project approved this year and for the new law to stipulate that the additional revenue for the states be allocated entirely to Education.

In 2013, the estimated revenue for the Minas Gerais government from mining royalties was approximately R$ 300 million. If the bill currently being debated in the National Congress is approved this year, raising the tax rate, state revenue in this area should reach R$ 600 million in 2014, thus guaranteeing an additional R$ 300 million for the education sector.

"This amount of R$ 300 million is the projected additional revenue for next year. But as the years go by, this amount will increase, and we will have another important source of resources for the State," said the governor, adding: "What is extracted from Minas Gerais, as minerals, will remain, in part, in the knowledge of our young people."