BRASILIA, Oct 24 (Reuters) - Brazilian congressional committees are scheduled to vote on sweeping mining reforms on Tuesday, likely amending President Michel Temer's proposals to favor smaller miners before putting them to a broader vote.
Temer proposed the policies raising royalties, overhauling regulations and creating a new government agency in three separate decrees in July as part of a market-friendly agenda aimed at attracting foreign investment. The decrees require the approval of Congress to become law.
The committee on mining royalties has amended Temer's proposal so that companies would face an automatic 4 percent royalty for iron ore, although miners could apply for a rate as low as 2 percent if they show a lack of profitability because of small operations, poor quality ore or certain other factors.
The rates proposed by Temer had varied between 2 percent and 4 percent for all miners based on the market prices for iron ore prior to the amendment, added to the committee report last week.
The move would result in miners such as Vale SA that operate on a larger scale with higher quality ore paying more than smaller miners, said Israel Lacerda de Araujo, a legislative expert who advises the Senate on mining.
"The majors have the capacity to pay (the 4 percent) but the smaller ones would need to close their mines. This lets them keep their mines," he said.
A Vale representative did not immediately respond to a request for comment.
Also helping smaller miners, the committee on newly proposed mining regulator ANM adjusted agency fees to factor in the size of the company and the area affected by a mine, with larger enterprises and projects paying more.
To fund expansion, more small Brazilian miners are preparing to list themselves on capital markets.
Ero Copper Corp, which runs the Vale do Curaçá mine in Brazil, raised $110 million in its initial public offering earlier this month, while Nexa Resources SA, which mines zinc and other metals, filed for a $651 million IPO.
The three committees face pressure to vote through the reforms a day before Congress turns to a vote scheduled for Wednesday on corruption charges leveled against Temer, which could dominate the legislative agenda for the rest of the week.
Delaying the committee votes could lead the reforms to miss a November deadline for full approval before Temer's decrees lapse. (Reporting by Jake Spring)