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Nevertheless, the federal government and the states (including the Federal District) have concurrentpower to legislate on environmental matters involving mining activities. Cities can complement theselaws according to local needs, when applicable.Under the Brazilian Constitution, exploration and production of government assets can only be carriedout by Brazilians or companies incorporated under the Brazilian law with head office and managementin Brazil. However, these companies can be controlled by a foreign individual or company – except incase of border areas, as explained below.Mining activities are regulated principally by Decree-law 227, published on 28 February 1967 with thestatus of law (“Mining Code”); Decree 62,934, published on 2 July 1968 to regulate the Mining Code;and further regulations issued by the National Department of Mineral Production (DepartamentoNacional de Produção Mineral – DNPM).23. 2. DNPM / MMEUnder the Mining Code, mineral rights are granted either by the Ministry of Minesand Energy (Ministério de Minas e Energia - MME) or by the General Director ofthe DNPM – a federal department linked to the MME – depending on the type ofrights granted.In addition, the DNPM is responsible for supervising all activities related to mining, marketing andindustrialization of mineral raw materials and also for regulating mining activities, subject to the limitsof the applicable laws and with a view to promote environmental conservation and sustainabledevelopment.23. 3. PriorityIn Brazil, mineral rights are granted under a priority regime.Under the priority system, once a party files a legal and valid application with the DNPM claiming anarea that is free for exploration and free from any burden, the claimed area is blocked in relation toother interested parties. This ensures the applicant exclusive access to the owned area, for thepurpose of exploiting resources or mineral ores 4 .According to the priority system, anyone interested may submit an application for research claiming anarea that is free for exploration and free from any burden, ensuring the applicant exclusive access tothe area for research and eventual mining deposit.23. 4. Systems4 Marcelo Gomes de Souza (coordinator), Direito Minerário Aplicado, Ed. Mandamentos, Belo Horizonte - 2003117