Mining profits under scrutiny: Mineral resources taxes and regulatory changes - Local impact of...

INCREASING BENEFITS OF THE MINING

INDUSTRY TOWARDS THE COUNTRIES

Sergio Hernández Núñez, Abogado [email protected]

Conference “Americas Iron Ore”Belo Horizonte, Brasil

November, 2012

SHIFTS OF MINING TAXES IN AUSTRALIA, SOUTHAFRICA, CHINA AND INDIA

Worldwide trend: increasing benefits of the mining industry towards the countries.

AUSTRALIA• JULY 2012: ADITIONAL TAX IS APPLIED TO THE

EXTRAORDINARY PROFITS OF MINING. BY 30%. STATEMENT: IMPROVE ECONOMIC INCOME IN OTHER PRODUCTIVE AREAS INVOLVING MINING DEVELOPMENT.

Sergio Hernández Núñez - [email protected]



SOUTHAFRICA• UPRISINGS OF WORKERS AGAINST MINING COMPANIES,

DEBATE ON BETTER IMPROVEMENTS OF THE MINING INDUSTRY TOWARDS THE COUNTRY.




CHINA• FERBRUARY 2012: INCREASE ON TAXES TO IRON AND TIN.

TB MOLYBDENUM, MANGANESE, TALCUM AND BORON. STATEMENT: INCREASE ON CONTROL ON EXPORTATIONS.




INDIA• 26% TAX ON MINING PROFITS ON CHARCOAL.

• RETAL RATES ON MINING OVER MINING FIELDS 2,5 REGIONAL, 10% STATE OWNED,

• PURPOSE: DISPLACED PEOPLE BY MINING PROYECTS


TAX PLANS ON MINING IN LATIN AMERICA

PERÚ

• 30% MINING TAX ON PROFITS

• 4,1% TO THE DIVIDENS, 70% IS APPLIED ON 70% PROFITS BEFORE TAXES.

• SEPTEMBER 2011. SPECIAL TAX ON OVERALL OPERATIONAL PROFITS (ROYALTY)



BOLIVIA

• TOTAL INCOME TAX 37,5% (25% UNTIL 2007). CREDIT VERSUS ROYALTIES DURING LOW PRICE OCCATIONS.

• SHIPMENT PROFITS ABROAD: 12,5%

• ROYALTIES ON SALES (ONLY 60% TO SELL IN BOLIVIA)



COLOMBIA

• TOTAL INCOME TAX: 33%

• ROYALTIES 1%, 2%, 3%, 4%, 6%, 10% and 12% ON SALES DEPENDING ON THE MINERAL.



CHILE

• TOTAL INCOME TAX : 20%

• ADITIONAL TO OVERSEAS SHIPMENTS: 22% WITHOUT CONTRACT 15% WITH CONTRACT.

• SPECIFIC TAX ON MINING: 0% ON DOMESTIC MINERS; 0,5 TO 5% MEDIUM MINING INDUSTRY AND 5% TO 14% ON MAJOR MINING INDUSTRY


RISK EVALUATION ON THE MINING INVESTMENT FACING REGULATORY AND TAX CHANGES

REASONS FOR THESE CHANGES:

• Awareness that minerals are natural non renewable resources that belong to the country.

• Social Inequity and needs of employment, health, education and housing.


RISK EVALUATION ON THE MINING INVESTMENT FACING REGULATORY AND TAX CHANGES

REASONS FOR THESE CHANGES:

• Environmental impact on local communities. Impact on original peoples. Clusters and impact on secondary and tertiary economy sectors.

• Impact on mining development on other economy sectors, specially exporters.


RISK ON INVESTMENT

• Increase on costs due to higher tax and royalties that discourage investment in several countries.

• World tendency on mining tax increase and more regulations to the mining companies that allows to correct mining investment distancing.


INCREASING BENEFITS OF THE MINING

INDUSTRY TOWARDS THE COUNTRIES

Sergio Hernández Núñez, Abogado [email protected]

Conference “Americas Iron Ore”Belo Horizonte, Brasil

November, 2012

Mining profits under scrutiny: Mineral resources taxes and regulatory changes - Local impact of...

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