• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 7 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 11 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 14 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 22 mins Why is Strait of Hormuz the World's Most Important Oil Artery
  • 2 hours Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 10 hours Struggle For Supremacy: Kremlin Condemns Alleged U.S. Ultimatum To Turkey Over Missile Deal
  • 8 hours Another surprise 'build'
  • 7 hours Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? . . . . China greatest threat next 50 years.
  • 3 hours Apple Bid To Buy Tesla in 2013 For $240 a Share
  • 7 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 6 hours California's Oil Industry Collapses Despite Shale Boom
  • 7 hours IMO 2020 could create fierce competition for scarce water resources
  • 7 hours IMO2020 To scrub or not to scrub
  • 15 hours Solar Cheaper than Coal
  • 12 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 8 hours Global Warming Making The Rich Richer
Alt Text

As Diesel Dies, One Commodity Is Crashing

Platinum futures plunged to 14…

Alt Text

Investors Return To Plowing Money Into Commodities

Commodities are trending once again…

Alt Text

Miners Are Looking To Ramp Up Lithium Production

Lithium prices have withstood all…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

Bad News For Miners: Cash Strapped Governments Up Royalties

Governments in resource-rich nations worldwide are still scrambling to adjust to lower commodities prices. With officials in a number of countries making significant moves this week to fix their finances — one way or another.

The trend toward government sales of resource assets continued. With Russia publishing guidelines for a planned sale of a 19.5% stake in state-owned oil and gas firm Rosneft.

But not all governments have assets to sell to raise cash. And some countries are looking to fill their coffers by raising royalties on mining projects.

One of those is Indonesia. Which announced Sunday that it is going ahead with an across-the-board rise in royalty rates for all metals produced in the country.

A spokesman for Indonesia’s Energy Ministry told reporters that royalties on gold will rise most significantly — jumping to 3.75%, from a former 1%. Silver will rise to 3.25%, from 1%, and nickel will jump to 2%, from a former 0.9%.

The good news for miners is that royalties on copper — one of Indonesia’s key mining products — are only rising slightly. To 4%, from a former 3.75%.

At the same time, officials in the Philippines are looking to use a similar strategy to boost revenue. With that country’s senate introducing a bill Monday to raise mining royalties to 10% of gross revenues.

The measure would reportedly apply to all types of mines. With the bill also specifying that the government could take a 55% share of adjusted revenues — if such an amount was greater than the 10% off-the-top royalty. Related: Trump vs Clinton: How Will Energy Fare?

These rates look significantly more onerous than the Philippines’ current fiscal regime. Where the government receives 50% of mining profits, after expenses are deducted.

The news wasn’t completely bad for miners on the royalty front this week however. With the government of Saskatchewan, Canada saying it is “slowing” a review of potential royalty hikes for the potash sector.

The review had been announced last year as part of the provincial budget. With the aim of increasing the government’s take from the potash sector.

But officials acknowledged that with fertilizer prices falling (just this week it emerged that international suppliers are signing deals at 10-year low prices), this is a bad time to raise rates. With Economy Minister Bill Boyd saying, “We don’t think that any changes in the royalty structure would be a good idea given where we’re at in the marketplace.”

That’s a refreshing recognition of realities in the sector by officials. Watch to see which way other resource-intensive nations go for royalties and other taxes –up or down — as they try to fix their finances.

Here’s to the royal treatment.

By Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News