Pressure grows for mining tax in Finland

Ministry commissions study on mining tax models in different countries

Environmental problems caused by mining have increased pressure on the government for new legislation. On Tuesday Minister of the Environment Ville Niinistö (Green) called on the government to draft a tax on mines.
“This generation allows the earth to be used. Therefore it would be good from the point ofstungames play games 505 urban crusher view of coming generations to levy some kind of tax, whose revenue would partly go to the local authority and partly to the state”, Niinistö said at a press conference on Tuesday.
“One option would be to directly place [the revenue] in a fund, along the model of Norway’s oil fund.”

The Social Democrats, one of the two main parties in the government, as well as the Christian Democrats, also want a study on a possible mine tax. The Left Alliance is ready to support such a tax.
“The topic is important and worthy of consideration. Personally I take a positive view of the tax”, says Jouni Backman, chairman of the parliamentary group of the Social Democratic Party.

Minister of Economic Affairs Jyri Häkämies (Nat. Coalition Party) has sought to dampen the enthusiasm for a mine tax. However, he did commission a Swedish consultancy firm to do a study on mine tax models around the world. The study by Raw Materials Group is expected by early June.
Häkämies does not rule out the possibility that the tax might be passed in the present government term, but he says that it is not an acute issue. “We need to consider the advantages and disadvantages”, he says.

The current mining law has been in force for less than a year, and all of its possible shortcomings are to be reviewed in the autumn, says Prime Minister Jyrki Katainen, the chairman of the other large government party, the National Coalition Party.
The current mining legislation has come under criticism from MEP Sirpa Pietikäinen (Nat. Coalition Party), who formerly served as Minister of the Environment.

The current mining law was passed during the previous parliamentary term, and it was praised even by the Greens, who were in the government then as well.
“We demanded more stringent requirements in the law, but our voice was not heard”, Niinistö said on Tuesday.
However, he also admitted that the problems that have arisen with the mining sector have come as a surprise to the Greens as well.

Niinistö has previously estimated that the annual revenue from the mining tax could exceed EUR 100 million. On Tuesday he did not want to estimate the size of the tax or other details.
Rising prices of raw materials have prompted many countries to consider a mining tax. Australia implemented a tax on coal and iron ore mining this year. The tax is 30 per cent of profit. Poland also recently decided on a mining tax. The matter has also been raised in South Africa, Chile, the Philippines, and Indonesia.
“Typical of the tax would seem that it targets bulk products which are produced in large amounts. I do not know of a tax that would target all minerals that are mined”, says Riikka Aaltonen, senior inspector of mining at the Ministry of Employment and the Economy.

Supporting a mining tax is Pertti Rannikko, Professor of Environmental Policy at the University of Eastern Finland.
“Exploiting Finnish natural resources is currently too easy and too cheap, and they will be used up rather quickly. The value of the natural resources will remain even if they are not used so frenetically”, he says.

Professor Rannikko says that it would be important that a sufficiently large proportion of the revenue from the tax should remain in the municipality where the mine is located.
“There were great expectations for mining in the north and east of Finland. People there were used to thinking that mines bring prosperity. However, the calculations of labour that would be needed have not corresponded to reality”, he says.
Although Finland’s mining sector has grown fast, it is still relatively small. In 2010 turnover in the sector was EUR 1.16 billion. Mining companies feel that the tax might kill the whole business.

Source: http://www.hs.fi