On 6 November, the Decree nº 46,072 of 5 November 2012 from the State of Minas Gerais ("Decree 46,072") was published. It modifies the TFRM regulation established by the Decree No. 45,936 of 23 March 2012), adjusting such regulation in light of the changes brought by Law 20,414.

Two changes have drawn attention of the mining companies: the discount in the TFRM and the end of the exemption for minerals industrialized within the State of Minas Gerais.

After long rounds of negotiations between the State Government and Mining companies, a 60%discount on the value of TFRM has been granted. The TFRM, from now on, will be charged at 0.40 of the Fiscal Unit of the State of Minas Gerais ("UFEMG") per ton of raw ore or mineral extracted, compared to the previous value of one UFEMG per ton (NB. One UFEMG is currently equivalent to R$ 2.3291, approximately USD 1.15). It is noted that Law 20,414 allows the
discount be up to 70%. However, the Decree 46,072 has fixed the reduction at 60% at least for now.

This measure will have retroactive effects. Companies which paid the TFRM based on the old rate of one UFEMG per tonne will be able to deduct, from the next TFRM payments, the overpaid (compared to the new rate) amount.

The other change that caused great interest in the industry was the revocation of the TFRM payment exemption for minerals to be industrialized within the State of Minas Gerais. Such revocation will be effective as from January 30, 2013.

Law 20,414 also brings two other important matters that have not been covered by Decree 46,072. The first one is that TFRM taxpayers which also pay the Minas Gerais State Environmental Control and Supervision Tax of the State of Minas Gerais (Taxa de Controle e Fiscalização Ambiental do Estado de Minas Gerais) (“TFAMG”), created by law No. 14,940 of 29 December 2003, may deduct amounts previously paid as TFAMG from amounts to be paid as TFRM.

The second matter refers to the responsibility of companies for paying the TFRM. The change brought by Law 20,414 provides that, in the events when unprocessed ore is commercialized between establishments within Minas Gerais, the assessment and payment of the TFRM amount may be assigned to the purchaser instead of the seller, differently from the procedure so far provided.

Considering that these two last changes have not been regulated by Decree 46,072, it is possible that a new decree will be published soon, encompassing such matters.