Brazil politician presents ‘rival’ bill on mine royalties to Senate

Diana Kinch – Dow Jones, 10/18/2011

Brazilian Senator Aecio Neves has proposed to the country’s Senate new legislation for Brazil’s mining sector that would boost royalties for all minerals to 5% of companies’ gross sales, rivaling the government’s own plans for a new mine royalties law.

Neves’ bill is more advanced than the government’s plans for new legislation and will move to a first Senate committee vote next week after a public hearing later Tuesday, Brasilia-based mining sector sources said.

Mining royalties in Brazil are among the world’s lowest, although mining companies have a heavy burden of other taxes. According to Brazilian Mining Institute Ibram, royalties payable on sales of iron ore are currently 2%, on phospates 3% and potash 4.5%. For some industrial minerals, Neves’ proposal would quintuple existing mineral royalties.