Brazil targets foreign investment through policy restructure
Plans have been unveiled to raise mining royalty revenues by 80 percent in Brazil, as the government looks attract foreign investment during a weak economic period.
President Michel Temer announced the new policy which will fit into his broader plans to modernize regulation across sectors in a major bid to draw investment and boost the economy.
"We are just scratching the surface here," Mining Minister Fernando Coelho Filho said.
"These measures will be fundamental to speed up the growth of the Brazilian economy," he added, defending changes to outdated royalties and clearer rules for mining investors.
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So, what will change?
Royalties on diamonds, gold and other minerals will increase by a set rate but iron royalties will rise with global commodity prices. This will see a 2% rise if the market price is less than $60 per tonne to a maximum of 4% if it rises above $100 per tonne.
Royalties on raw materials, used in construction work throughout the country, will fall to 1.5%.
There will also be a change to the regulatory body, with the launch of the National Mining Agency in place to replace the National Department of Mineral Production, designed to increase transparency in the industry while removing bureaucracy.
The new policy will also see an increase in the fines issues for environmental damage, with a ceiling of $9.47 million being referred to and a legal requirement for the companies at fault to clean up degraded areas.
As the country will seek to attract foreign investment, which officials believe be in the billions, there will also be an increase to the limit on the stake that foreign companies can have in mining ventures in Brazil. This is currently set at 40 percent.
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