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Brazil's new industrial stimulus measures are welcome but only go a "first step" toward boosting the mining industry's competitiveness, the country's mining institute Ibram said Tuesday.
The measures announced won't directly benefit mining companies, Ibram said in an emailed statement. However, they may favor mining companies in the long term as logistics should improve via incentives given to railroad and port development, which should reduce ore transport costs, Ibram said.
Earlier Tuesday the Brazilian government announced a broad package of tax incentives and reduced interest rates on loans for various industrial sectors, in a move to boost the country's industrial output performance, ward off import surges, and boost international competitiveness.
The package of measures fails to address specific problems faced by the mining industry, which include high energy prices and lack of sufficient geological research, problems with environmental licensing, creation of conservation areas without an assessment of local geology, water supplies, trained manpower and the overall high tax burden on the sector, Ibram said.
"However, the actions taken could stimulate mineral demand in sectors which benefit from the tax breaks, as well as maintaining mining as a major player in the international market," the institute said.
-By Diana Kinch, Dow Jones Newswires, 55 21 7564 4495 firstname.lastname@example.org