China revises resource tax rates on metals

China's implementation of its resource tax law alters mining tax rates on some ferrous and non-ferrous metals from today.

The law officially took effect today following Beijing's announcement a year earlier. The law is designed to link taxation to prices of the resources rather than the quantity. The new scheme is expected to better reflect market dynamics.

The resource tax rate for ferrous metal minerals, including iron, manganese, chrome, vanadium and titanium is raised to 1-9pc from 1-6pc previously, while the rate for nonferrous metals such as zinc, lead, tin and nickel is lifted to 2-10pc from 2-6pc. The rate for copper changes to 2-10pc from 2-8pc.

China will reduce its resource tax on molybdenum to 8pc from 11pc but will roll over the rate for tungsten at 6.5pc. The tax rate for bauxite will be cut to 2-9pc from 3-10pc previously.

The government has cut the resource tax rates on medium and heavy rare earths elements, including dysprosium, terbium, gadolinium and yttrium by 7pc to 20pc effective today. It has maintained its 7-12pc resource tax on light rare earths, including praseodymium, neodymium, lanthanum and cerium.

The lower resource taxes, which will in turn reduce production costs and prices of the metals, are expected to ease the financial burden on domestic firms. Most spot markets have been little affected by the tax revisions, which are more likely to weigh on prices in the medium term as it takes some time for the lower mining costs to be factored in downstream products.

The new resource tax rates for other metal minerals are as below: