The Brazilian Senate will discuss Wednesday a provisional decree that will increase the iron ore royalty rate companies pay to the local government, according to media reports.
The provisional decree MP 789/2017 should increase iron ore royalties to between 2 and 4 percent, from 2 percent, depending on the commodity’s price in the international market.
If the commodity’s price is below $60/mt, the royalty will be 2 percent. When it reaches between $60/mt and $70/mt, the royalty will be 2.5 percent. It will then rise to 3 percent for prices between $70-80/mt, 3.5 percent for prices between $80-100/mt, and finally 4 percent for above $100/mt.
Brazil is expected to significantly increase revenues from the existing iron ore royalty tax.