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Mining firms globally express worry over govts’ taxation

Mining firms globally express worry over govts’ taxation
By Mutale Kapekele
Wed 09 June 2010, 10:40 CAT

MINING companies globally have expressed concern over governments’ taxation, the PricewaterhouseCoopers (PwC) seventh annual review of global trends in the mining industry has reported. In Zambia, there is mounting pressure for the government to get more revenue through taxation from the mines.

According to PwC, mining industries’ chief executives have expressed concern that governments facing challenging budget deficits would look to the mining industry as a source of additional taxation.

“Mining companies are concerned over macroeconomic factors, such as foreign exchange rates, the cost of energy and the impact potentially unsustainable government budget deficits will have on interest rates, tax regimes, and the global economy,” PwC stated.

“While some of the pressure may have been taken out of the labour market generally, the mining labour market is starting to tighten again, particularly in certain hotspots where miners are competing with other resource companies and infrastructure projects for skilled labour.”

PwC predicts that metal prices would increase in 2010 but costs in the mining sector will remain a key differentiator.

Tim Goldsmith, global mining leader for PwC observed that the mining industry still had transparency challenges.

“The industry continues its relentless focus on the safety and health of its workers. In reviewing the information published by mining companies, a key challenge is the lack of comparable data and significant inconsistency in the level of transparency – from some companies providing no health and safety statistics to others providing full, detailed reports to the market,” Goldsmith stated.

“After a hiatus, the future is looking bright again for the industry. Although 2009 saw overall revenues decline, a drop in net profit and a decrease in cash flow in the industry, none of the top 40 companies were subject to bankruptcy or voluntary administration provisions. On the other hand, there were no significant transactions completed during the year – pointing to a potential missed opportunity for those that may have had the available financial resources.”

He stated that despite capital expenditure of over US $200 billion over the past three years, production for most mining companies remained flat.

“Despite approximately US$200 billion of capital expenditure over the past three years, production remained flat across most commodities,” stated Goldsmith.

Labels: MINING, WINDFALL TAX

posted by MrK @ 2:02 AM