The Federal Government Has Finally Given Indications That The Much-Awaited New Mining Code Is About To Be Enacted.
Since February 2011, when Minister of Mines and Energy Edson Lobão, published the National Mining Plan 2030, domestic and foreign investors have been anxiously awaiting the new Code, which would overhaul the existing, out-dated, 1967 Mining Code.
A few days ago, it was announced that the Ministry and Chief of Staff Gleisi Hoffmann, were conducting meetings with the governors of the States of Espírito Santo and São Paulo, to finalize the text of a Provisional Measure ("Medida Provisória"), to be sent to Congress, with a request for urgency.
Although a draft of the new Code has not yet been disclosed to the general public, it is expected that it will focus on promoting a favorable tax treatment for mining companies that export value-added minerals, rather than simply mineral commodities, without processing or transformation.
It was recently announced, for instance, that the new Code will contain incentives focused on the transformation of Brazil's leading export, iron, into steel, for domestic consumption. Accordingly, the CFEM (the royalty due on mineral production) would be reduced to favor such value-added products, rather than being imposed at the same rate as that imposed on the sale of raw commodities.
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