Quebec lays out plans to raise mining taxes

Tue May 7, 2013 4:54pm EDT
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* Tax on ore value lower than initially proposed

* Graduated tax on profits to range from 16 to 28 percent

* Seen taking C$770 mln to C$1.8 bln extra over 12 years

May 7 (Reuters) - The Quebec government has laid out plans to extract up to C$1.8 billion (US$1.8 billion) more in taxes from the mining sector over the next 12 years, with measures that include a minimum royalty, arguing that Quebecers need to see greater benefits from mining ventures in the province.

The new taxation plan, less punishing than a scheme the separatist Parti Quebecois had promised in its 2012 election campaign, came as sagging demand and falling metal prices cut into already tight margins in the mining sector.

The plan, posted on the provincial government website late on Monday, would see miners pay the greater of two options: either a royalty on the value of ore, set at 1 percent for the first C$80 million and 4 percent for anything over that, or a graduated tax on profits, ranging from 16 to 28 percent.

The Parti Quebecois had previously proposed a 5 percent royalty on the gross value of all mining output, and a "super-tax" on profits above a certain point.

Dale Coffin, a spokesman for Agnico-Eagle Mines which operates three gold mines in Quebec, said the overall impact on Agnico's operations appeared to be minor, although he noted the company was still reviewing the proposed changes.

"Hopefully this will signal an end to this period of uncertainty, as it is important that stability and investor confidence is restored for the long-term viability of the industry," he said.   Continued...