The News.....from....?Argentina
Argentine export tax return threatens $8.5m in mining investment
Litigation may be filed against the government of Argentina due to the reinstatement of an export duty for mining companies doing business in the country.
Author: Dorothy Kosich
Posted: Thursday , 10 Jan 2008
RENO, NV -
The Financial Times reported Wednesday that a decision by Argentina's government to levy new export duties on mining companies doing business in the country could hurt $8.5 billion in investments over the next three years.
Quoting an unnamed senior mining executive, FT reported that three companies, who did not want to be identified, have sued, claiming that the government is violating a 1993 law guaranteeing no tax regime changes for 30 years.
Last month, Argentine regulators said they had eliminated tax exemptions for mining companies, forcing some to pay export duties ranging from 5% to 10%. The Argentine mining chamber (CAEM) said at the time that four companies had already been asked to make their tax payment. The chamber declared that export duty charges violated the country's mining legislation.
Current mining law states that capital good exports for mining project are tax exempt and that value added tax payments made during exploration programs could be rebated. Royalties paid to provincial authorities are limited to 3%.
Xstrata, Barrick Gold, Yamana Gold and Rio Tinto all have projects in the pipeline in Argentina. They include Xstrata's El Pachon, which would require a $2 billion investment; Yamana Gold's $2 billion Agua Rica project; Barrick's Pascua Lama, a $2.4 billion cross-border gold and silver project encompassing both Argentina and Chile; and Rio Tinto's Rio Colorado potash project. Among the major mines now doing business in Argentina are Xstrata's Bajo La Alumbrera copper and gold mine, Barrick's Veladero gold and copper mine, and AngloGold Ashanti's Cerro Vanguardia gold mine.
The "senior mining executive" told FT that "I wouldn't say that companies would walk away from these projects, but they probably could freeze investment until the situation is clearer." The Financial Times reported that the government had no comment about its policy.
He claimed that Argentina's government hoped the levy could raise as much as $1 billion. Lila Kowalewski, manager of the Argentine Chamber of Miners said a study by the customs authority had estimated the levy would have raised $230 million if it had been in force throughout last year.
So these characters have a property down under, or is it the stock is going "down under"?
Target penny then over board or "walk the plank"!
On Target everytime with a Bullseye