CORRECTED-Brazil hikes mining royalties to ease budget deficit

(Corrects paragraph 2 to show new rules go into effect in November if approved by Congress, not immediately)

BRASILIA, July 25 (Reuters) - Brazil's government unveiled sweeping changes to its mining code on Tuesday, boosting royalties in the latest move to reduce a budget deficit amid a sluggish recovery from the country's worst recession on record.

Royalties for iron ore will rise to as much as 4 percent, depending on market prices, from 2 percent currently. The new rules, which will go into effect in November if Congress approves them, include the creation of a new agency to oversee the mining industry. (Reporting by Anthony Boadle and Jake Spring; Editing by Brad Haynes)