Mineral rich countries are ensuring that they are extracting sufficient economic rent for the rights of mining companies to exploit their resources, Ernst & Young (EY) Mining and Metals states in a report.
According to EY Global Mining and Metals tax leader Any Miller, countries impose increases to resource revenues through tax, beneficiation, royalties or state ownership each month.
“Yet at the same time, we are now increasingly seeing countries changing their laws to encourage mining investment.”
In a study on resource nationalism, EY provides a country-by-country analysis on the various national resource revenue taxes showing that; Indonesia and Ukraine have imposed tax and royalty increases; China, India, Philippines and Indonesia have imposed restrictions on imports and exports; Papa New Guinea, Indonesia and Mali have had recent mining reforms.
On 8 September, Zambia waived an earlier rule requiring mining companies and other exporters to produced import certificates from destination countries in order to claim tax refunds.
The requirement was suspended as it was impractical.
In Mali, the West African country recently cancelled 130 mining permits, about 30% of existing permits in a move to clean up the sector.
The cancelled permits include those held by Malians as well as foreigners and targeted those where no development has taken place.
MPRDA amendment bill
In South Africa, South Africa’s minerals portfolio committee 2013 voting in favour of amendments to the Minerals & Petroleum Resources Development Act (MPRDA) of 2002 raised concerns over increased ministerial control and bureaucracy in the sector.
In terms of the amendment bill, government must be ceded a 20% ‘free-carry’ in oil and gas projects, and it stipulates a right to buy the balance of a project at ‘an agreed price’. This replaces the ‘fair market value’ that was proposed initially.
The bill also refers to an export licensing regime that could be implemented for certain ‘strategic’minerals such as coal and iron ore.
The MPRDA amendment bill has been passed in Parliament and is awaiting the signature of the President.