Brazil to double iron ore royalties to 4%; pellet seen at 2%
Last Update: 20/10/2011 12:33:48
Brazil's long-awaited new mining code will double iron ore royalties to 4%, with the proposals likely to be sent to Congress before the end of the year, local media reported Wednesday. Currently, mining royalties in the resource-rich republic are averaged at 2% but that rate will increase to 4%. Royalties ranging from 0.5-6% will be applied to other products, newspaper Folha de S.Paulo reported. The publication added that officials at the country's energy and mines ministry plan to peg pellet royalties at just 2% as they look to stimulate the production of value-added mining products. Previous market rumors indicated the new royalties could vary according to demand, as Steel Business Briefing reported, but neither this information nor a start date for the legislation has been confirmed by the ministry. Asked by SBB last week about the impending hike in royalties and its impact on the mining industry, Marcus Randolph, ceo of BHP Billiton's ferrous and coal division, said "everyone wants a bigger piece of mining industry profits." He added "Brazil (to date) has been pretty reasonable, other countries less so, the key is the industry must remain competitive."
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