Bloomberg News

Russian Copper Tax May Cost Producers $500 Million

July 21, 2010

Russia’s copper producers may lose as much as $500 million a year if the government levies a 10 percent export duty on the metal, Nomura International Plc said.   Russia, whose three major copper producers are OAO GMK Norilsk Nickel, Ural Mining & Metallurgical Co. and Russian Copper Co., exported 507,200 metric tons of the metal last year, according to the Federal Customs Service. The government may introduce the 10 percent tax next year, Ilya Trunin, the Finance Ministry’s head of tax and customs, said in Moscow today.   The ministry also proposed to raise taxes on nickel exports next year to between 5 percent and 7.5 percent at $12,000 to $20,000 a ton. The duty will rise to 30 percent of the difference between the market price and $20,000 a ton when nickel trades above that level, according to the proposal.

Prices are unlikely to surpass the threshold of $20,000 a ton, Vladimir Zhukov, a Nomura analyst in Moscow, said by e- mail.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Maria Levitov in Moscow at mlevitov@bloomberg.net.

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net.


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