Polish treasury min calls for review of mining tax

Tuesday, Jan 3, 2012

WARSAW (Reuters) - Poland's new mining tax, which is to mainly fall on Europe's No.2 copper producer KGHM , is out of sync with global standards and should be reviewed to reflect production costs, the treasury ministry said.

Last month, the finance minstry published its proposed mining tax bill, to be discussed by government this month. The levy is to raise 1.8 billion zlotys ($524.2 million) this year and subsequently rise to 2.2 billion. ($1 = 3.4340 Polish zlotys)

(sourced Reuters)

Expert group to meet to review royalty on minerals in India

Thursday, 20 Oct 2011

ET reported that an expert group of the Mines Ministry will hold its first meeting this week to review the royalty rates due for revision next year for all major minerals other than coal, lignite and sand.

The 17 member study group which will submit its report in six months, will not only take into account the present Act governing royalty but also the new draft mines law Mines and Mineral Bill which is likely to be tabled in the winter session of Parliament.

A Mines Ministry official said "The first meeting of the Study Group constituted under the chairmanship of Additional Secretary (Mines), Mr Sanjay Srivastava regarding revision of royalty rates and rates of dead rent for minerals (other than coal, lignite and sand for stowing) has been convened here on October 21."

There are 51 minerals prescribed in the second schedule of the MMDR Act 1957 and the rates vary from mineral to mineral. The royalty on iron ore is 10 per cent at present.

Mr S Vijay Kumar Mines Secretary had said earlier that the group will not only review the royalty rates based on existing Act but will also recommend royalty as per the new mines Bill and the mechanism for its computation.

He said that the committee will also recommend royalty as per MMDR Bill, 2011 taking into account the liabilities on the lease holder.

The proposed new Mines law provides that the coal miners share 26% of the profit and others an amount equivalent to royalty amount with the project-affected people.

The next upward revision in royalty rates is due in August 2012. Rates are revised every three years and the last revision was done with effect from August 13 2009.

(sourced Economic Time)

China to vet inward M&A deals for national security

Sat Feb 12, 2011 12:25pm GMT
Feb 12 (Reuters) -

* Foreign M&A deals in China subject to additional checks
* New rules come into effect in March
* Beijing may block deals that it deems to harm security
BEIJING, Feb 12 (Reuters) - China will launch a state-level investment review body to check that merger and acquisition deals struck by foreign firms in one of the world's fastest-growing economies do not endanger "national security", China's State Council, the cabinet, said on Saturday.

The new regulation, which will come into effect in March, is set to install a new red-tape barrier for doing business in China, the world's second largest economy where double-digit growth has attracted more than $105 billion in foreign direct investment last year.
Foreign investments in military, agriculture, energy and resources, key infrastructure, transport systems, key technology sectors and "important equipment manufacturers" may be subject to reviews, according to a statement published on the central government Internet portal, www.gov.cn.

The review will be conducted by a "foreign investment security review board" under the cabinet. Members of the board will come from the National Development and Reform Commission, the Ministry of Commerce and other agencies on ad hoc basis.
The new body could enable China to turn the tables on some countries that have previously blocked its investments on national security grounds.
China suffered the biggest knock to its deal-making confidence in 2005, when state-controlled oil firm CNOOC Ltd withdrew an $18.5 billion bid for U.S. oil firm Unocal after the Senate moved to block it on national interest grounds.

But Beijing, which introduced an anti-trust law in 2008, has also blocked deals that do not conform with its national plans in the past.
China rejected Coca-Cola's $2.4 billion bid for China's top juice maker Huiyuan , in 2009 and buyout giant Carlyle's $375 million bid for Xugong, China's biggest construction equipment maker, in 2008.
The government wants to consolidate many heavy industries such as steel into the hands of a few big players, and it has blocked several foreign attempts to buy into its huge steel sector, by far the world's biggest.

In 2007, it blocked ArcelorMittal from gaining a majority stake in China Oriental Group and in 2009 it forced Russia's Evraz Group to abandon an option to take control of Delong Holdings Ltd , a Chinese steelmaker listed in Singapore, in a $1.5 billion deal.

INVESTOR-UNFRIENDLY?
China attracted $105.7 billion in foreign direct investments in 2010, 17.4 percent more than in 2009, but some foreign businesses have complained that the Chinese government is becoming more unfriendly towards investors.
According to the new regulation, Chinese government agencies, trade associations, competitors, suppliers and other related parties are allowed to apply for the start of a review of a foreign-related M&A deal.
The process will include two parts as "general review" and "special review". For those deals failed to pass the "general review", a "special review" will be started that may last up to 60 days.
If Beijing finds a deal that could potentially threaten national security, it can terminate the deal.
"Related departments and units must enhance the sense of responsibility to guard state and commercial secrets... to effectively safeguard national security," the cabinet said in the notice.
The body could be similar to Australia's Foreign Investment Review Board (FIRB), which has held sway over dozens of planned Chinese investments into resources sector in Australia, and which can block deals it deems not to be in the national interest.

The FIRB advises Australia's treasurer, who has the final say. In 2009, the state-owned China Non-Ferrous Metal Mining (Group) Co dropped a $400 million bid for 50.6 percent of Lynas Corp , owner of the world's richest deposit of rare earth minerals, saying the conditions set by the FIRB were too stiff.
Earlier in the same year, Treasurer Wayne Swan forced Chinese metals group Minmetals to withdraw a $1.7 billion bid for OZ Minerals until it revised the deal to exclude a mine situated in a restricted weapons testing area.(Reporting by Zhou Xin and Tom Miles, editing by Miral Fahmy,sourced:reuters)