Barriers to investment in third world mineral industries

This article looks at some of the barriers that have distorted the global flow of capital in the mining industry. The perceived threat of nationalization is discussed and Chile's expropriation of US copper mining companies in 1971 is examined. Political instability, leading not only expropriation but to loss of title, altered tax laws, and voided contracts, is also cited as a factor affecting investor confidence. Finally, inadequate infrastructure is regarded as a further barrier to development of Third World mineral industries.     

Does taxation alter exploration? : The effect of uncertainty and risk

The effect of resource rent taxation on mineral exploration is a controversial issue on which very little research has been carried out. Simple numerical examples are used in this paper to demonstrate that a ‘pure’ resource rent tax, or Brown Tax, can reduce the extent of exploration of a ‘promising’ deposit by a risk averse explorer, but encourage exploration of ‘unpromising’ deposits. This counter-intuitive result is explained in terms of the effect of the tax and of exploration on the costs of risk and uncertainty.     

Establishing an effective production sharing type regime for petroleum

The primary reason for developing a nation's petroleum resources for export is to generate government revenues. The goal of most governments is to maximize the net present value of their petroleum revenues subject to efficient exploration and production practices and depletion considerations. This paper seeks to provide a basis for the determination of an effective tax regime that will achieve this goal. The analysis focuses on 12 standard production sharing contract options applied to four hypothetical exploration environments. A relatively recent Resource Rent Tax option is also examined as an add-on to production sharing contracts or other tax regimes. The results highlight the need for governments to understand and to use: (1) appropriate profit criteria, (2) an understanding of multi-national petroleum corporation behaviour, and (3) a priori geologic information in establishing effective tax regimes for petroleum.     

The new economic order and world mineral production and trade

World mineral production is dominated by the developed countries — the developing countries dominate production of only tin, cobalt, bauxite, and petroleum. This production pattern is largely the result of historical, political, and economic factors, and is not likely to change radically in the next decade. Apart from petroleum, there seems to be little opportunity for the formation of mineral-producer cartels, although there is considerable scope for constructive producer-consumer agreements. Given the pattern of world mineral production and trade, the developed countries would on the whole benefit more than the developing countries from price increases. The most acute present need is for new means of financing exploration and development of mineral deposits in the developing countries, and for means of redressing the worst imbalances between rich and poor nations outside of the commodity arena.     

Imperatives for attracting investment and technology in the Indian mining sector

In India, the mineral resource inventory and the production of a large number of important minerals have registered significant increases during the last few decades. Yet the country continues to be a net importer of many high value and scarce minerals and metals, like gold, diamond, and several base metals. Exploration and development of the resources of these minerals are technology- and capital-intensive. To bring technology and capital through foreign direct investment (FDI) into the Indian mineral sector, it is imperative to lay stress on: accurate resource estimation and categorization, as well as realistic projection of the true values; rationalization of legislative measures based on R&D studies and reorganization of the implementation machinery; conducive tax structure; notification of acts and rules applicable to offshore mineral resources; time-frames for granting licences and leases; encouragement to labor productivity by rationalizing labor laws; reforms in the monetary system to increase market competitiveness of Indian minerals; and judicial reforms. FDI in the Indian mineral sector is important to firm up the knowledge-base of mineral resources and their optimum exploitation.     

Economic and social effects analysis of mineral development in China and policy implications

Mineral development has contributed greatly to China's economic and social development. Many challenges remain, however, including environmental pollution and resource waste in practice, as well as a dearth of systematic theoretical research. The goal of this study is to analyze the economic and social effects of various mineral developments in China from diversified perspectives, so as to provide the basis for the formulation of China's mineral development policy. The input–output effects, industrial linkage effects and income distribution effects of different mining industries are quantitatively analyzed by adopting basic hypotheses of input–output economics, industrial linkage model and income distribution antitheses based on the latest available official data from China Statistical Yearbook from 2004 to 2010 and the 2007 Input–Output Table of China. The empirical results obtained in this study indicate that all mineral development industries, especially coal mining and washing, and petroleum and natural gas extraction industries, have given a strong impetus to the increase of China's fixed asset investment and GDP. Moreover, they have provided a large number of jobs, thereby alleviating ongoing employment pressure, and they have also played a positive role in promoting China's technology investment. The analysis of industrial linkages demonstrates that mining industries are basic to the national economy and produce a significant impetus to its downstream industries, but create weak pull effects in terms of national economic development. From the perspective of income distribution, mining industries play an important role in increasing China's fiscal revenue and per capital income. Hence, China's mineral development policy should (1) encourage additional investment in technology for exploration and development to insure sufficient supply and expand the input effects; (2) attract additional talent to work in remote regions; (3) optimize the industrial structure and promote the industrial transformation in resource regions; (4) adjust the interest distribution between the central and local governments to enable the local regions to become more self-sufficient; and (5) enhance the legal environment so that companies can more readily undertake their social responsibilities voluntarily.     

The forgotten resource curse: South Africa's poor experience with mineral extraction

Studies of the resource curse as it affects African states abound, yet few deal specifically with the experiences of South Africa. The inability of countries to convert natural resource wealth into income and improved development measures remains highly pertinent and is especially apparent in Africa's largest economy. This paper takes a unique approach to study the resource curse by comparing South Africa's political economy with the existing resource curse literature. Using data from international organisations, studies of poverty and qualitative evidence this paper examines South Africa's experience with mineral extraction. It is found that South Africa has experienced many of the symptoms outlined in the resource curse literature including relatively slow GDP growth, gross inequalities, entrenched poverty and the creation of a rentier state. Overall, it is concluded that South Africa has failed to benefit from natural resource wealth and can be classified as a resource cursed state. Not only has mineral wealth failed to benefit much of South Africa's population, sections of society have actually been harmed through the process of mineral extraction. This paper is the first to examine South Africa in light of the current resource curse literature and to conclude that the state far more closely resembles its sub-Saharan African neighbours than its upper-middle income peers.     

Mineral exploration in the USSR and the USA

This article compares non-fuel mineral exploration in the USSR and the USA. It examines the organization of exploration; recent trends in the level and distribution of expenditures; exploration productivity; and planning and decision making. It shows that although the sequence of exploration stages and activities is very similar in both countries, substantial differences overshadow these similarities, largely because of different economic and political systems and mineral endowments. However, the article concludes that we still have much to learn before making a full comparison of Soviet and US exploration.     

Malaysia's tin supply problems

The sharp decline in Malaysia's tin output has become a matter of serious concern. The mining industry has blamed ‘penal’ tax rates for the decline in development, but more important in discouraging new investment and prospecting are difficulties in obtaining new mining leases, and the insecurity created by government plans to restructure asset ownership so as to increase indigenous Malay participation.     

Mineral resources appraisal and policy: Controversies,issues and the future

Political-economic events of the 1970s brought mineral resource appraisal to the focus of national policy. Estimates of and methodologies for mineral resources appraisal were scrutinized, revealing deficiencies in method and data and fostering considerable debate about the credibility of estimates and about preferred methodology. Since credibility can be increased through the acquisition of additional geoscience information, questions regarding methodology have more than one formulation and therefore more than one correct solution, depending upon the expected value of additional information and the conditional losses of relevant policy options. When existing information is meagre and the expected value of information is high, the optimum decision may be to defer all policy options until after the acquisition and analysis of- additional information. Decision theory offers an analytical framework that is sufficiently generalized to provide answers for highly varied circumstances of geoscience and resource information and policy issues. Our ability to perform any such analysis is limited by inaccuracies in both geologists' estimates of undiscovered mineral resources, and in economists' calculations of conditional losses of policy options for each of the relevant states of mineral resources.     

Economic risk and mineral taxation on Indigenous lands

Mining generates risk of environmental and social harm for Indigenous peoples but can also generate substantial revenues for them, creating opportunities for community development in a context where economic and social disadvantage is the norm. Especially as mining revenues should, in part, compensate for mining’s negative social and environmental impacts, it is vital that mineral taxation on Indigenous lands reflect a careful assessment of appropriate tax mechanisms and a matching of these with community priorities. Yet little has been written that could serve as a guide for Indigenous decision makers. This article contributes to an understanding of the issues and choices facing Indigenous communities in designing mineral taxation regimes, by focusing on the question of economic risk. Risk arises as a key variable in choosing or designing a mineral taxation regime in three ways. Different approaches to mineral taxation are inherently more or less risky, in the sense that they are more or less certain to generate tax revenues. A second aspect of risk involves the degree of economic certainty or predictability associated with different types of commodities and projects. Third, the risk tolerance of Indigenous peoples and communities can vary significantly. We show how Indigenous groups can integrate and address these different dimensions of risk, by recognising the ‘risk consequences’ associated with different approaches to mineral taxation and choosing an approach that reflects, as fully as possible, the group’s risk tolerance.     

Australian Mining Symposium 1979

The Sydney Showground was the scene for a major international exhibition of mining and exploration equipment - AIMEX '79. In conjunction with this was held the Australian Mining Symposium, organized by Thomson Publications (Aust) Pty Ltd, and sponsored by the Australian Mining Industry Council. The symposium, entitled ‘Projections for the future in mining and exploration— political, economic and global’, included a number of papers of wide interest, with two or three papers of much narrower technical appeal. Proceedings of the symposium are to be published. Australian Mining Symposium, Sydney, February 1979.     

Environmental regulation of exploration and mining operations in Asian countries

This paper offers a new perspective on the environmental laws in Asian nations affecting the exploration, mining, and reclamation activities of the mineral resource industry: the perspective of the senior government officials in those countries, whose job is to enforce these new environmental laws. The article presents the results of a 1998 survey of national environmental officials in Asia conducted by the Colorado School of Mines and the Metal Mining Agency of Japan. Officials in 10 diverse countries—Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Mongolia, Philippines, Thailand and Vietnam—responded to a detailed questionnaire covering applicable laws, agencies, protected areas, covered mineral activities, financial assurance, environmental impact assessment, public involvement, environmental standards, permit and reclamation requirements.
The survey confirms that Asian nations are part of the global trend towards national government regulatory structures that balance mineral development objectives with environmental considerations. The survey also shows developing regulatory systems (some embryonic, some more mature) utilizing a combination of mining and environmental acts, and often an 'insider' perspective of the national officials administering the laws. While that perspective is not without its biases (not least the rigor of enforcement), it may nevertheless be of use in company planning. The emerging regulatory picture contradicts the conventional notion that it is the 'lower' level of regulation in Asia that is attracting foreign direct investment in mining.     

Public attitudes to nuclear energy: Salience and anxiety

During the last decade there has been a significant increase in public concern about nuclear energy. This paper presents a brief overview of trends and developments in public opinion since the late 1970s. One possible reason for this increased concern is the public's perception of risks. Research has shown a considerable divergence in public and expert assessment of the risks associated with nuclear energy. It will be argued that qualitative aspects of these risks play a crucial role in the public's perception of nuclear energy, and that reactions such as fear and anxiety are the major determinants of attitudes to the building of new nuclear power stations in one's neighbourhood. It is also clear, however, that differences in the perception of these risks do not embrace all the relevant aspects of public acceptance of nuclear energy. Public reaction is also related to more general values and beliefs, and the issue of nuclear energy is firmly embedded in a much wider moral and political domain.     

Indonesia's mineral resources: Performance and prospects

This paper discusses the present position and future prospects of mineral exploration and exploitation in Indonesia. It places the industry within the economic and political context of the country as a whole and considers the development of government policy towards the sector. Although the mineral resources of Indonesia are believed to be vast, the performance of the industry in the past has been erratic. The relative political stability of the last few years, combined with rising prices, has encouraged the opening up of new mines, and has also emphasised the need for more local processing of those minerals that are produced. At present, income from oil provides most of the government revenue and consequently the prospects of this sector are critically important for the nation's future. Increased diversification can, however, be expected in the next few years as the resources of tin, bauxite, nickel, copper, coal and many other products are developed. Given a favourable political and economic climate, Indonesia could be one of the world's major mineral producers by the end of the century.     

The geographic concentration of world mineral supplies

Mineral reserves are unevenly and erratically distributed throughout the world; those countries which were intensively explored in the past — the USA, Canada, the USSR, Australia, South Africa, and a limited number of Asian, African, and Latin American countries — control a large share of many of the industrially important metallic minerals. Current attitudes towards exploration and the mining industry in both the developed and the less developed countries should clearly encourage rather than discourage new exploration. Given an increase in exploration, new reserves may well be found in previously unexplored areas, but any major increase in world mineral supplies will probably come from mining very low- grade deposits and developing new methods of mining and processing non-conventional ores. While it is vital to increase research and development in exploration techniques and mining and processing technology, it is also critical to maintain current levels of consumption and trade by reversing the trend towards trade restriction on the part of some of the less developed countries who are important mineral exporters.     

Compromising sustainable mobility? The case of the Gothenburg congestion tax

Congestion charging is widely considered an effective policy measure to regulate and reduce car traffic demand and associated environmental and health problems in cities. However, introducing restrictive measures to constrain individual choice and behaviour for the common good has often proven difficult. Using a specific case, the Gothenburg congestion tax introduced in 2013, we study the policy process behind the introduction of the tax and assess to what extent green values were compromised along the way. The tax was made possible by co-financing infrastructure investments, including roads, which seemingly contradicts stated goals of reducing car traffic and emissions. We show how the tax was ‘muddled through’ in a top-down political compromise by a grand coalition where different interests could legitimate their support in relation to the achievement of partially conflicting objectives and projects. However, to declare the regulatory goals fully neutralised would be to underestimate the scheme's direct environmental effects and restrictive potential. Finding a compromise with powerful political and economic interests was necessary to get it off the ground. Once launched, however, it can over time regain its restrictive properties and lead to more profound long-term effects.     

Taxation of uranium mining ventures in Saskatchewan: A policy assessment

The basic objective of this paper is to present a policy assessment of the Saskatchewan Uranium Royalty (SUR). This scheme, as enacted on 1 August 1976, was designed to be an integral part of the province's rent appropriation and economic development strategy. Before the tax regime is addressed directly an overview is given of the resource policy environment within which the impost was developed.     

International mining taxation issues and comparisons

This paper presents the quantitative results of recent research on Canada's minerals and metals industry, and its international competitiveness for mineral investment. The information and analysis presented are derived from the work of a Canadian government-industry task force that was created in 1991, under the auspices of the Intergovernmental Working Group on the Mineral Industry (IGWG). Much of this work deals with mining taxation in several Canadian provinces. More importantly, an attempt is made to evaluate the total tax burden that the mining industry must bear, on a project basis, at all levels from exploration through refining operations in many important competitor countries. While the focus of the paper is on an international comparison of mining taxation, some non-tax issues relating to Canada's competitiveness for mineral investment are addressed .     

国际碳税政策实践发展与经验借鉴

碳税作为削减温室气体排放的有效市场经济政策手段,被全球多个国家推进实施并取得较好减排效果。目前,我国碳排放仍处于高位水平,碳减排行动面临严峻挑战。随着欧盟碳边境调节机制的推进,我国碳减排行动面临的国际形势也日趋复杂。因此,跟踪研究国际碳税政策最新实践进展,为我国实现“双碳”目标做好政策能力储备十分必要。本文系统分析了国际上碳税政策的实践进展与经验,将国际碳税政策实践发展分为初始起步阶段、探索发展阶段和深入拓展阶段,并从税制要素的角度全面总结了国际碳税实践的相关经验。根据国际碳税实践经验和我国的实际发展情况,本文提出了我国开征碳税的基本思路,并提出对使用含碳化石能源的单位或个人征收碳税,将碳税纳入环境保护税中实施统一征管等政策建议。