September 3, 2013 / 11:47 PM / 6 years ago

Uruguay's Congress okays bigger taxes on mega mining projects

MONTEVIDEO, Sept 3 (Reuters) - Uruguay’s Congress on Tuesday passed new rules imposing hefty taxes and environmental standards on potential mega mining projects that have yet to start operating in the small South American country.

The house of representatives, controlled by leftist President Jose Mujica’s party, passed the package of new rules by a 52-30 vote. The legislation passed the senate last month.

Most opposition lawmakers voted against the measure, which will require large mining projects to pay a yearly fee, a 25 percent tax on corporate profits and another tax of up to 38 percent on profits. The law also introduces tougher environmental standards, including new rules for mine closures.

There are no big mining projects currently in Uruguay, which has significant iron reserves but mainly exports agricultural goods.

“Uruguay will now also have mining as one of its principal contributors to gross domestic product,” said house member Julio Battistoni, a Mujica ally. “Now we are going to be able to develop parts of the interior of the country that otherwise would go undeveloped.”

The new law could affect iron miner Zamin Ferrous’ plans to get its $3 billion Aratiri project up and running.

The Swiss-based firm expects Aratiri - which would be the biggest private investment ever made in Uruguay - to produce around 18 million tonnes of iron ore per year starting in 2015. (Reporting By Malena Castaldi and Felipe Llambias, Writing by Mitra Taj; Editing by Ken Wills)

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