TORONTO, March 5 (Reuters) - Bills to reform Brazil’s mining industry are expected to go before Congress in late March or early April and could be enacted by 110 days after that, the country’s mines and energy minister said in an interview on Sunday.
A remodeled mining code, aimed at reviving investor interest, was first proposed in 2009 but stalled in Congress in 2013. To ease its passage, the bill has been broken into two sections that revise government royalties and establish a new regulator.
“We are finishing the discussions inside the government, we are very near closing the discussion for them to go to Congress,” Fernando Coelho Filho said in an interview at the Prospectors and Developers Association of Canada conference in Toronto, which runs Sunday to Wednesday.
“If we are able to send both of them, in late March or early April, (implementation would be) probably 90 to 110 days after that,” he said.
The minister also said a decision on who will replace Vale Chief Executive Murilo Ferreira, whose term expires on May 26, could come by the end of March or beginning of April.
State pension funds led by Previ Caixa de Previdência , Bradespar SA, Mitsui & Co and an investment arm of state development lender BNDES are all members of Valepar SA, the investment holding company that controls Vale.
Vale, the world’s No. 1 iron producer, was partly privatized in 1997, although the government still wields influence through BNDES’ investment arm and the pension funds.
The government pension funds have “a key role in this” selection process, along with other partners in Vale, Coelho Filho said. “For now, we’re still looking.”
The royalty bill will likely get smooth passage, he said, because it will boost the funds going to government.
The bill will set a flexible iron ore rate of 2 percent to 4 percent, depending on international prices for the steelmaking raw material, the minister said. The current rate is 2 percent.
Royalties for copper will remain at 2 percent, gold will increase to 2 percent from 1 percent, potash will drop to 2 percent from 3 percent, phosphate will remain at 2 percent, niobium will increase to 2 percent from 1 percent, and aggregate will drop to 1.5 percent from 2 percent, he said.
Funding for the new national mining agency will come from a portion of royalties, Coelho Filho said. That is the same model now used, although little of that money goes to the regulator because it is being spent by the government.
The agency’s budget may remain at about 300 million to 350 million reais ($96 million to $112 million), but the portion of the royalty rate has not yet been decided, he added.
Originally proposed by former President Dilma Rousseff in hopes of increasing government revenue from a then-booming mining industry while encouraging development of mineral claims that had been idle for years, the code was criticized by industry as a means of tightening state control over natural resources. (Reporting by Susan Taylor; Editing by Peter Cooney)