Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A day after news of an onerous new mining royalty and taxation regime in Peru, Namibia, the world’s biggest miner of offshore diamonds and a top four uranium producer, drops plans for a huge jump in the corporate tax rate for miners and mineral export levies.
Deputy Finance Minister Calle Schlettwein said on Wednesday, the country has withdrawn a proposal to increase the tax on non-diamond miners to 44% from 37.5% and will instead propose a windfall tax when international prices for the commodities are high.
Namibia was one of 25 countries around the world that recently announced their intentions to increase their take of the mining industry’s profits or impose ownership and other restrictions.
London-listed Rio Tinto Plc and Australian miner Paladin Energy currently produce uranium while another four projects are in various stages of completion. De Beers has a 50-50 diamond joint venture with the government. Diamond miners are currently taxed at 55%.
Bloomberg reports Namibia will also defer removing the zero-rating for value added tax on mineral exports and cut a proposed levy on exports from 5% to between 0% and 2% depending on the industry.
According to a survey released last week by consultants Ernst & Young, resource nationalism jumped to the top of the list of concerns at the world’s top miners.
Image is of an derelict house in the town of Kolmanskop, southern Namib desert, a thriving diamond mining town at the start of the last century that was abandoned in 1954 and is currently a favourite photographers’ and film location.
