Local news sources in Brazil report that the Brazilian government is considering a tax of up to five percent on iron ore exports in order to encourage Brazilian producers - namely, Vale, the world's largest iron ore producer - to focus more on Brazil's domestic steel market.
According to the local reports, the export tax idea has been in the works for the past two months. However, Brazil's ministries of Finance and Industry have yet to confirm these reports or announce an official change in the tax policy.
An alternative remedy to rein in Vale's iron ore exports that has reportedly been discussed by Lula's administration is to increase mining royalties. It was also reported by local newspapers within the last week that Brazil's President Luiz Inacio Lula da Silva is pushing for the removal of Vale CEO Roger Agnelli. Lula has commented to the media in recent months that Vale has not invested enough in Brazil's domestic industry or jobs market. In response to this pressure from the government, Vale has recently announced $5.5 billion worth of new investments that will expand its mining capacity.