Tuesday, July 04, 2006

China Royalties on Mines

Yet another reason to put your money in commodities and not into miners, commodity stocks or commodity manufactures.

China to push for royalties on mines

Jul 4, 2006 8:44 AM GMT164

BEIJING (Reuters) - China will forcefully push to levy royalties on miners to help avoid the excessive development of its mineral resources and allow the government to get a share of the revenue, official Chinese media reported on Tuesday.

Beijing was formulating policies, including different royalties rates for mine explorers and developers and rules on mine transfers, the Economic Daily quoted Vice Minister of Land and Resources Wang Min as saying.

China has historically waived royalties on its miners. That has helped fuel excessive mining of coal, for instance, and made the industry the world's most dangerous.

Existing miners would be evaluated and backpayments of royalties would be charged, the paper said.

The plans are in line with Beijing's moves to raise resources tax and environmental charges on minerals, petroleum and natural gas.

China raised the resource tax on coal a year ago and has recently increased taxes on gold mines. In March, Beijing also started levying a landmark windfall tax on its oil producers, using it to compensate weak consuming groups for high oil prices.

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