Russia Considers Measures to Tap Mining Profits Once Export Tax Ends



Ben Bartenstein | Bloomberg

Russia is considering longer-term measures to grab a bigger slice of mining companies’ profits once a temporary export tax finishes at the end of this year, according to people familiar with the matter.

The government last month announced duties of at least 15% on steel, nickel, aluminum and copper exports from August 1 – with varying rates – to help cool surging commodities prices and boost state coffers. It said the move would be temporary and that it would seek to develop more sustainable measures.

Officials are now mulling changes to mineral extraction taxes, with rates likely linked to raw-material prices so that levies rise when the market does, the people familiar with the matter said, asking not to be identified as the information isn’t public. That would probably replace export taxes from 2022, with a final decision taken after parliamentary elections in September. Other options of tapping mining profits may still be discussed, they said.

Countries around the world have taken steps to cool inflation in commodities and other key goods as economies plot a path out of the Covid-19 pandemic. Yet the temporary measures Russia announced in June risk altering exports if companies stockpile metal, and could see costs passed onto consumers. Raising mineral extraction taxes would probably mean producers bear most of the new costs.

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