In Brazil the government is looking forward to a larger share from mining profits. Brazilian President Dilma Rousseff said she hoped that the new legislation which seeks to limit foreign investment in the mining sector will be approved this year.
The new rules hope to curb China’s growing ownership in iron ore production in Brazil. Iron ore is the largest import commodity for China at present. The President hopes that the new rules will also help domestic market supplies of mineral substances.
The proposed bill has been under discussion for a number of years and its delay in implementation has allowed a number of foreign investors to buy up numerous mineral deposits in the country. Currently foreign investors are treated at par with Brazilian investors. The only real restriction for them is in border related areas where they are not allowed to mine.
The bill also suggests that mineral deposits that are considered strategic should be put up for auction. At present it is the national mining department that gives permission to develop mines to companies and the auction system would change that.
The companies which process the mined ore in Brazil will also face lower royalty charges according to the bill. This will also help the country economically by providing more local jobs in Brazil. It will also give Brazil some say in the increasingly one sided economic relationship that it currently shares with China.