APPLICATION, 10 Acquatella Lat Am Mining Sector, 10_Acquatella_LatAm_MiningSector.pdf, 2.0 MB

Latin American Mining Sector: Review of Current
Trends and Prospects.
Jean Acquatella PhD
Energy and Natural Resources Unit
2013
United Nations ECLAC
Economic Commission for Latin America and the Caribbean
Santiago, Chile
UNECE – IAEA UNFC Workshop, 9-12 July 2013, Santiago, Chile
2013
CONTENTS
1. Production, Reserves, Exploration investments.
2. Increase of Mining Rents during the 2003-2012 price
cycle, and State participation ( %, govt. take ).
3. How did governments share in mining wealth?
4. Analysis and comments.
–
–
–
Different responses of mining and oil sector to price boom.
Fiscal treatment of mining.
Discussion of prospects.
In Latin America the productive structure remains
concentrated in primary sectors
LATIN AMERICA AND THE CARIBBEAN: EXPORT STRUCTURE BY TECHNOLOGY INTENSITY, 1981-2010 a
(Percentages of the total)
Source: ECLAC, on the basis of United Nations Commodity Trade Database (COMTRADE).
a Cuba and Haiti not included. Data for Antigua and Barbuda refer only to 2007, and data for the Bolivarian Republic of Venezuela only to 2008; data for Honduras
do not include 2008; data for Belize, Dominican Republic, Saint Kitts and Nevis, Saint Lucia, Suriname and Grenada (exports only) do not include 2009.
FDI trends reinforces productive specialization
in primary sectors ( except. Mexico and Brazil)
LATIN AMERICA AND THE CARIBBEAN: FDI BY DESTINY SECTORS AND REGION 2007-2012 a/
(Percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures.
a/ Estimate
Resource
Export
Dependence
(2007 peak year for
mineral/oil prices
before global
financial crisis)
Fiscal
Dependence
on Resource
Revenues
Latin America’s Metal Exports as % of total Exports
increase during 2002-2011
LAC Mineral Exports / Total LAC Exports (%)
LAC countries share (%) in world production of metals:
2000 - 2012
Metal
Bauxite
Aluminum primar.
Copper mine
Copper refined
Gold [Ton]
Silver [Ton]
Tin mine
Tin refined
Iron [Mton]
Molibdenum mine
Nickel mine
Nickel refined
Lead mine
Lead refined
Zinc mine
Zinc refined
2000
26
2005
27.5
2010
21.5
2012
19.6
8.9
43
25.1
14.4
38.5
26
14.9
7.5
46.5
23.7
18.1
41.8
21.2
18
5.5
45.2
21.5
19.2
48.7
19.5
16.6
4.4 Brasil, Argentina, RBVenezuela
44.6
Chile, Perú y México
19.0
Chile, México y Perú
21.4 Peru, México y Colombia
47.7
México, Perú y Chile
20.5 Perú, E.P Bolivia y Brasil
13.7 Perú, EP Bolivia y Brasil
26.1
35.2
14.1
10.7
14.7
8.4
19
7.3
26
37.3
15.1
13.4
14.6
7.2
21
7.9
22.6
31.8
12.9
11.6
14.5
7.4
21.7
7
21.1 Brasil, México, RB Venezuela
23.8
Chile, Perú y México
11.7 Brasil, Cuba y Colombia
8.6 Brasil, Colombia y Cuba
11.6 Perú, México,EP Bolivia
5.0 México, Brasil y Argentina
19.4 Perú, México, EP Bolivia
7.4
México, Perú y Brasil
Top 3 producers
Brasil, Jamaica y Suriname
Source: World Bureau of Metal Statistics, Gold Fields Mineral Services, Intierra Raw Material Database , UNCTAD
.
LAC countries share (%) in world production of metals:
2000 - 2012
Metal
Bauxite
Aluminum primar.
Copper mine
Copper refined
Gold [Ton]
Silver [Ton]
Tin mine
Tin refined
Iron [Mton]
Molibdnum mine
Nickel mine
Nickel refined
Lead mine
Lead refined
Zinc mine
Zinc refined
2000
26
2005
27.5
2010
21.5
2012
19.6
8.9
43
25.1
14.4
38.5
26
14.9
7.5
46.5
23.7
18.1
41.8
21.2
18
5.5
45.2
21.5
19.2
48.7
19.5
16.6
4.4
44.6
19.0
21.4
47.7
20.5
13.7
Brasil, Argentina, RBVenezuela
26.1
35.2
14.1
10.7
14.7
8.4
19
7.3
26
37.3
15.1
13.4
14.6
7.2
21
7.9
22.6
31.8
12.9
11.6
14.5
7.4
21.7
7
21.1
23.8
11.7
8.6
11.6
5.0
19.4
7.4
Brasil, México, RB Venezuela
Top 3 producers
Brasil, Jamaica y Suriname
Chile, Perú y México
Chile, México y Perú
Peru, México y Colombia
México, Perú y Chile
Perú, E.P Bolivia y Brasil
Perú, EP Bolivia y Brasil
Chile, Perú y México
Brasil, Cuba y Colombia
Brasil, Colombia y Cuba
Perú, México,EP Bolivia
México, Brasil y Argentina
Perú, México, EP Bolivia
México, Perú y Brasil
Source: World Bureau of Metal Statistics, Gold Fields Mineral Services, Intierra Raw Material Database , UNCTAD
.
LAC countries share (%) in world production of metals:
2000 - 2012
Metal
Bauxite
Aluminum primar.
Copper mine
Copper refined
Gold [Ton]
Silver [Ton]
Tin mine
Tin refined
Iron [Mton]
Molibdnum mine
Nickel mine
Nickel refined
Lead mine
Lead refined
Zinc mine
Zinc refined
2000
26
2005
27.5
2010
21.5
2012
19.6
8.9
43
25.1
14.4
38.5
26
14.9
7.5
46.5
23.7
18.1
41.8
21.2
18
5.5
45.2
21.5
19.2
48.7
19.5
16.6
4.4
44.6
19.0
21.4
47.7
20.5
13.7
Brasil, Argentina, RBVenezuela
26.1
35.2
14.1
10.7
14.7
8.4
19
7.3
26
37.3
15.1
13.4
14.6
7.2
21
7.9
22.6
31.8
12.9
11.6
14.5
7.4
21.7
7
21.1
23.8
11.7
8.6
11.6
5.0
19.4
7.4
Brasil, México, RB Venezuela
Top 3 producers
Brasil, Jamaica y Suriname
Chile, Perú y México
Chile, México y Perú
Peru, México y Colombia
México, Perú y Chile
Perú, E.P Bolivia y Brasil
Perú, EP Bolivia y Brasil
Chile, Perú y México
Brasil, Cuba y Colombia
Brasil, Colombia y Cuba
Perú, México,EP Bolivia
México, Brasil y Argentina
Perú, México, EP Bolivia
México, Perú y Brasil
Source: World Bureau of Metal Statistics, Gold Fields Mineral Services, Intierra Raw Material Database , UNCTAD
.
LAC metal reserves as % of world reserves:
2000 - 2012
120
CHL
ARG
BRA
BOL
100
BRA
80
60
40
20
BOL
BRA
JAM
GUY
SUR
CHL
VEN
PER
ARG
CHL
PER
MEX
MEX
PER
CUB
BRA
PER
BRA
BOL BRA
VEN
MEX
BRA
CUB
COL
DOM
VEN
CHL
PER
BRA MEX
MEX
0
2000
2010
2012
Source: USGS Geological Service data, with elaboration from DRNI – ECLAC.
PER
CHL
MEX
BOL
CHL
BRA
PER
MEX
CHL
PER
PER
MEX MEX
BOL BRA
CHL
PER
MEX
BOL
MEX
Regional share (%) in total world investment in Mining
Exploration
2000
2010
2012 MM US$
5.7%
11.0%
10.5% $
Latin America
29.5%
32.0%
28.6% $ 210.0
North America
12.6%
15.3%
19.9% $ 146.0
Oceania
18.6%
14.4%
16.5% $ 121.0
Africa
18.6%
14.2%
14.4% $ 106.0
Asia
15.0%
13.0%
10.2% $
Total
100.0%
99.9%
Investment by Region
Europe
Total [MMUS$]
$
86.0 $ 562.0
100.0%
$
735.0
Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on official figures, and data
from Trends in Worldwide Exploration
77.0
75.0
Annual investment in Mining Exploration increases in Latin America
from 0.56 Billion US$ to 3.1 Billion US$
2003 - 2010
Major countries capturing the new investments in Mining
Exploration within Latin America.
Country shares as percentage of total Mining Exploration Investment
in the region (%)
2013
CONTENTS
1. Production, Reserves, Exploration investments.
2. Increase of Mining Rents during the 2003-2012 price
cycle, and State participation ( %, govt. take ).
State participation (govt. take) in Mining Sector Rents
during the 2003-2012 price cycle
500
PRIMARY COMMODITY PRICE INDEX, 2003-2011
(January 2003=1)
450
400
350
300
250
200
150
100
50
0
Petróleo, gas natural y carbón
Metales
Different performance : sector rents and % State appropriation, investment and
production dynamics are different across sectors and countries.
Mining Sector : Economic Rent
Refined cooper prices London Metals Exchange and
average production costs LAC * ( USD cents per lb.)
400
International Price
350
Net profits (appropriated by mining industry)
300
250
Tax payments (appropriated by States)
Factor payments beyond extraction phase
200
(labor, sale costs, debt service.)
Extraction Cost
At mine head.
150
100
50,000
45,000
50
40,000
35,000
0
30,000
1990
1992
1994
1996
Precio Cu (BML)
1998
2000
2002
2004
2006
2008
2010
25,000
Costo de producción (promedio América Latina)**
20,000
15,000
10,000
5,000
*
Source : based on data from COCHILCO
Average production costs refers to direct and indirect mining costs, interest payments
and depreciation , minus proceeds from sale of indirect products, (C3, according to
Brook Hunt terminology), ** Costs for period 1992-1996 reflect only Chile..
** World Bank ( WDI) World Development Indicators Database
Mineral Rent ( % GDP)
0
Mining sector Economic Rent for selected countries
(Millions US$, year 2009)**
Mining Sector Rents increase in Latin America vs. world
Mining Sector Rent: 1990-2003
rises 4 x to 2004-2009
100,000
0.54% GDP regional avg.
2.08 % GDP regional avg.
LAC
Mining Sector Rent by region, 1990-2009
(US$ Millions 2005)
90,000
80,000
East
Asia &
Pacific
70,000
60,000
50,000
40,000
East
Asia &
Pacific
30,000
LAC
North
America
20,000
10,000
0
1990-1992
Norteamérica
1999-2001
Asia del Este y el Pacífico*
2003-2005
2007-2009
America Latina y el Caribe
Source:ECLAC based on, World Development Indicators. Statistic: Mineral Rent ( % GDP) defined as international price – unitary cost of
production for a basket of 10 minerals.
Mining Sector profitability reaches unprecedented levels
in Latin America
LAC: Profitability over assets 500 largest companies , 2010
(% profit/assets)
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), sobre la base de información estadística de América Economía, diciembre 2011
(http://www.americaeconomia.com/).
Extractive Sector combined rents (% GDP )
in individual countries.
35
Latin America (selected countries ): Mining and Hidrocarbon ( Oil/Gas) rents
(% GDP)
30
25
20
15
10
5
x 3 renta
x 10
0
1990- 2004- 1990- 2004- 1990- 2004- 1990- 2004- 1990- 2004- 1990- 2004- 1990- 2004- 1990- 2004- 1990- 20042003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009 2003 2009
Bolivia
(Est.Plur.de)
Brasil
Chile
Colombia
Ecuador
Hidrocarburos
Honduras
Minería
México
Perú
Venezuela
(Rep.Bol.de)
Fuente: Banco Mundial
Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), sobre la base de información del Banco Mundial, World Development Indicators.
Nota: *El dato del año 2009 de Asia del Este y el Pacífico corresponde al año 2006.
País
Argentina
Bolivia
Brasil
Chile
(GMP-10+CODELCO)
MINING
SECTOR RENTS
(% GDP)
OIL& GAS
RENTS (% GDP)
199020042003
2009
0.05 x8 0.48
0.30
2.28
0.64 x4 2.24
19902003
3.30
6.32
1.03
x3 17.29
20042009
9.85
x428.87
x3 3.06
0.31
0.28
6.47
Chile (sólo minería
privada GMP-10)
Colombia
Ecuador
Guatemala1/
Guyana
Honduras
Jamaica
México
Nicaragua
Perú
República
Dominicana
Suriname
Venezuela, RB
América Latina
Australia
Canadá
Estados Unidos
Sudáfrica
0.17
0.01
n.d.
5.62
0.25
3.43
0.14
0.07
0.79
0.69
7.26
0.32
0.54
1.17
0.2
0.0
0.9
x5 0.91
x3
x2
x9
0.03
n.d.
5.34
0.69
1.67
0.34
0.63
7.16
1.96
5.07
x4 0.83
2.08
4.12
0.69
0.08
2.47
4.97 x.4 7.11
13.00 x2 24.22
0.54
1.08
4.83
x.5 7.71
1.61
1.99
4.08
26.89
3.61
x231.00
7.11
Fuente: Elaborado sobre la base de datos de COMTRADE, UNCTAD, Banco mundial y CEPAL.
Oil/Gas rents are larger in absolute
MINING
OIL& GAS
terms,
but
FISCAL
REVENUE
REVENUE (% total
(% total Fiscal
Mining
sectorFISCAL
rents
are
growing
Fiscal
revenue)
revenue)
much faster.
19902003
20042009
n.d.
2.2
8.1
Relative performance
35.1
Mining vs. Oil/Gas:
1990-2003
2004-2009
11.5
8.2
27.4
9.0
1.4
13.1
Economic weight of Oil & Gas (% GDP)
0.9
2.1larger than 9.4
continues
to be
Mining Sector.14.2
30.7
29.4
n.d.
0.3 rents are increasing
But
Mining Sector
much faster ( high profitability).
0.05
0.5
Oil & Gas Sector facing investment lags
30.0to rising
35.8
and reduced profitability, due
Production costs.
2.9
13.4
4.4
3.8
56.3
44.9
Fiscal Impact of increase in Mining Rents.
País
Argentina
Bolivia
Brasil
Chile
(GMP-10+CODELCO)
OIL& GAS
RENTS (% GDP)
19902003
0.05
0.30
0.64
20042009
0.48
2.28
2.24
19902003
3.30
6.32
1.03
20042009
9.85
28.87
3.06
19902003
20042009
n.d.
2.2
6.47
17.29
0.31
0.28
8.1
x4
35.1
1.4
x9
13.1
0.9
x2
2.1
Chile (sólo minería
privada GMP-10)
Colombia
Ecuador
Guatemala1/
Guyana
Honduras
Jamaica
México
Nicaragua
Perú
República
Dominicana
Suriname
Venezuela, RB
América Latina
Australia
Canadá
Estados Unidos
Sudáfrica
MINING
FISCAL REVENUE
(% total Fiscal
revenue)
MINING
SECTOR RENTS
(% GDP)
0.17
0.01
n.d.
5.62
0.25
3.43
0.14
0.07
0.79
0.91
0.03
n.d.
5.34
0.69
1.67
0.34
0.63
7.16
0.69
7.26
0.32
0.54
1.17
0.2
0.0
0.9
1.96
5.07
x4 0.83
2.08
4.12
0.69
0.08
2.47
4.97
13.00
0.54
7.11
24.22
1.08
0.05
4.83
7.71
1.61
1.99
4.08
26.89 x2 31.00
3.61
7.11
Fuente: Elaborado sobre la base de datos de COMTRADE, UNCTAD, Banco mundial y CEPAL.
0.3
n.d.
2.9
x10
x4
OIL& GAS
FISCAL REVENUE (% total
Fiscal revenue)
1990-2003
2004-2009
11.5
8.2
x2.5
=
27.4
9.0
9.4
30.7
x1.5
=
14.2
29.4
30.0
=
35.8
4.4
=
3.8
56.3
-0.2
44.9
=
0.5
13.4
2013
•
•
•
Mining Rents increase during the 2003-2011 price cycle.
How did governments perform?
State share (%) in Mining Rents during 2003-2011:
State share in sector rents
Countries included the analysis
• Metals Mining Sector
– Bolivia, Chile, Colombia, Guatemala, Honduras, Perú
• Oil and Gas Sector
– Brasil, Ecuador, Colombia, México, y Venezuela
Countries selected based on availability of information: in particular
disaggregated fiscal revenue payments at sector level.
Chile
Taxes and other fiscal revenue paid by Mining companies* , relative to Mining
Sector rent. absolute values (US$ millions each year)
40,000
35,000 M
35,000
30,000
25,000
20,000
14,000 M
15,000
10,000
5,000
35%
8% >
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Ingresos tributarios totales (Gobierno central)
Rentas mineras totales
Tributación y aportes totales de la minería (sin impuesto específico)
Impuesto específico declarado por GMP-10
Fuente: Elaboración propia sobre la base de datos de COCHILCO, CEPAL, Banco Mundial, FMI y Banco Central de Chile.
Notas: * Los ingresos tributarios son del Gobierno Central. Los datos fueron tomados de CEPAL y del Banco de Chile.
** La tributación y aportes totales de la minera incluye los dividendos de CODELCO y los excedentes de ENAMI.
Chile
Taxes and fiscal payments by Mining Companies as percentage
of total Mining Sector Rent each year (%)
45%
TOTAL
40%
35.7%
35%
30%
CODELCO
22.1%
25%
20%
GMP-10
15%
13.6%
10%
<5%
5%
0%
1994
1995
1996
1997
1998
Aportes de las empresas privadas
1999
2000
2001
CODELCO
2002
ENAMI
2003
2004
2005
2006
2007
2008
2009
Tributación minera total (incluye royalty)
• In 2004-2009 , total fiscal revenue from mining reaches 35.7% of total sector rent.
• Fiscal contribution from State company CODELCO is 22% ( 2/3 of total ), even though CODELCO
only controls 1/3 of total cooper production.
• Fiscal revenue contribution of Private Mining Companies reaches 13.6 % of sector rent.
• In 1994-2004 Private Mining fiscal contribution is less than 5 % of sector rent except for 1996-98.
Perú
Taxes and other fiscal revenue paid by Mining companies* , relative to Mining
Sector rent. absolute values (US$ millions each year)
25,000
20,000
15,000
12,000 M
10,000
5,000
3,500 M
14.2%
2.9% >
0
1998
1999
2000
2001
Ingresos tributarios
2002
2003
2004
Tributación minera total
2005
2006
2007
Rentas mineras
2008
2009
2010
Regalías
Fuente: Elaboración propia sobre la base de datos de Superintendencia Nacional de Administración Tributaria (SUNAT), Banco Mundial y FMI.
Notas: * Los ingresos tributarios son los del Gobierno Central. Incluyen: Impuestos a la renta, a la producción y consumo, a la importación y otros ingresos
como impuesto a las transacciones financieras, temporal a los activos netos, a las acciones del Estado, etc. ** Los impuestos pagados por las empresas
mineras incluyen el 100% del impuesto a la renta minera.
Peru
Taxes and fiscal payments by Mining Companies as percentage
of total Mining Sector Rent each year (%)
40
35%
35
29%
30
25
20
19.5%
15
10
5
0
2004
2005
2006
Tributación + Regalías
2007
Tributación
2008
2009
Regalías
• State rent appropriation has been decreasing from 35% in 2004 to 19.5% en 2009.
• Fiscal contribution from Mining Companies during peak price year ( 2007) reached 29% of sector rent.
• In 2007 the contribution of Mining to total Fiscal Revenue in Perú peaked at 19.4%.
Guatemala
Taxes and other fiscal revenue paid by Marlin Gold Mine, relative to Mining
Sector rent. absolute values (US$ millions each year)
400
350
300
250
200
150
100
50
0
2005
2006
Rentas mineras totales
2007
2008
Impuestos sobre la Renta
2009
2010
Regalías Gob/Mun
Fuente: Elaboración propia sobre la base de datos de http://goldcorpguatemala.com/, Instituto de Desarrollo Global y Medio Ambiente, FMI y World Bureau of
Metal Statistics.
Guatemala
Taxes and fiscal payments by Mining Companies as percentage
of total Mining Sector Rent each year (%)
20
18
16
14
12
12 %
10
8
6
4
2
0
2006
2007
Total de aportes mineros al fisco
2008
Impuestos sobre la Renta
2009
2010
Regalías Gob/Mun
Fuente: Elaboración propia sobre la base de datos de http://goldcorpguatemala.com/, Instituto de Desarrollo Global y Medio Ambiente, FMI y World Bureau of
Metal Statistics.
Honduras
Taxes and other fiscal revenue paid by Mining companies* , relative to Mining
Sector rent. absolute values (US$ millions each year)
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Estimación
10 %
0
2000
2001
2002
Rentas mineras
2003
2004
2005
2006
Impuestos a la renta (estimación propia)
2007
2008
2009
Regalías
Fuente: Elaboración propia sobre la base de datos de la Secretaría de Finanzas de Honduras, Banco Central de Honduras, Banco Mundial y CEPAL.
Nota:
* Estimación propia según el impuesto empresarial del 10%, sobre las cifras de rentas mineras del Banco Mundial.
Mining : State appropriation of sector rent 1990-2003 vs. 2004-2010
State participation in sector rents, and fiscal contribution of mining as % of total fiscal revenue
País
Bolivia (datos CEPAL)
Bolivia (datos PIEB)
Bolivia (sin COMIBOL, datos PIEB)
Chile (cobre, GMP-10+CODELCO)
State participation (%) Mining sector rent
(anual avg. for period)
Before
2004
(*)
2004-2009
Total period
(*)
21.8
35.7
(*)
57.7
34.6
32.1
Chile (CODELCO with dividends)
17.1
22.1
Chile (10 largest private mining GMP-10)
3.9
13.6
Colombia
Guatemala
Honduras
48.9
37.1
12.2
10.0
Perú
Australia (minería metálica)
Canadá
10 largest Mining multinationals
Taxes paid globally (% gross rents.)
10.3
(*)
17.9
27.4
26.1
33.6
Fiscal contribution Mining Sector (%)
total fiscal revenues
(anual avg. for period)
Before
2004
0,9
2004-2009
Total Period
3,0
8.2
37.5
2,6
2.2
1.3
23.0
21.0
6.6
30.4
18.7
11.1
1.5
14.3
8.0
0.05
0.4
0.5
0.4
2.9
14.2
10.1
1.9
10.1
(*)
20.2
38,6
33.2
Fuente: Elaborado sobre la base de datos de COMTRADE, Banco mundial y CEPAL. Calculado como el promedio de los porcentajes
de participación anuales (utilizando precios nominales). Los datos PIEB para Bolivia se tomaron del estudio de Rolando Jordán
(PIEB, 2010). (*) No se pudo calcular el porcentaje de participación en estos períodos por errores estadísticos.
Mining Sector 2004-2011
• Rents multiply x 4
• State appropriation < 33%
(benchmark int’l)
• Guatemala, Honduras < 13% of total
rent appropriated by State
• Private concesion regimes, State
participation the exception.
• Use of traditional fiscal instruments (
corporate income tax and royalties)
Need
to introduce PROGRESSIVE INSTRUMENTS i.e.
Resource Rent Taxes (RRT) etc.
• Price cycle generates investment
boom, growing production.
• POLICY CHALLENGE: How to achieve
more progressive fiscal regime?
Under current contract rules.
Mining Sector 2004-2011
• Rents multiply x 4
• State appropriation < 33%
(benchmark int’l)
• Guatemala, Honduras < 13% of total
rent appropriated by State
• Private concesion regimes, State
participation the exception.
• Use of traditional fiscal instruments (
corporate income tax and royalties)
Need
to introduce PROGRESSIVE INSTRUMENTS i.e.
Resource Rent Taxes (RRT) etc.
• Price cycle generates investment
boom, growing production.
• POLICY CHALLENGE: How to achieve
more progressive fiscal regime?
Under current contract rules.
Oil&Gas sector
• Rents multiply x 2
• State appropriation 45-65%
• Aparent “Regressivity” of rent
appropriation during boom???
• State Oil companies are the rule.
• Use of progressive fiscal
instruments for rent capture
( windfall taxes, contratos PSC,
participación directa)
• Price cycle does not generate
investment boom
• Decreasing production
/consumption ratios and reserves
• Rising production costs.
• POLICY CHALLENGE: How to
mobilize required investment to
meet energy demand???
2001 – 2011 international metal price cycle broke the previous trend
of decreasing real prices between 1980 – 2000.
Persistency of current price cycle???
Fiscal competition between Mining exporting countries:
reduction of Corporate Income Tax rates 1980 – 2010
Remarkable rise of Chile as major world producer of Copper
1946 – 2010 Mine Copper production by major producing countries
(Thousand Tons per year )
6000
Chile
5000
4000
3000
USA
2000
Peru
1000
0
1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010
Chile
Peru
China
U.S.A.
Indonesia
Australia
Source: own elaboration with World Bureau of Metal Statistics, and UNCTAD data.
2013
CONTENTS
1. Production, Reserves, Exploration investments.
2. Increase of Mining Rents during the 2003-2012 price
cycle, and State participation ( %, govt. take ).
3. How did governments share in mining wealth?
4. Analysis and comments.
–
–
–
Different responses of mining and oil sector to price boom.
Fiscal treatment of mining.
Discussion of prospects.
2013
Prospects
1. Correction of expectations and rationalization of
announced investments projects
–
–
–
–
Cost increases, in particular energy costs.
Expectations of downward adjustments in world metal prices.
Impact of European financial crisis.
Increasing number of socio-environmental conflicts.
2. Social impact of increased rents?
–
–
–
–
Earmarked use of Mining and Oil/Gas fiscal receipts?
Indirect: Improved fiscal balances enable increased social
spending?
Indirect: Improved macroeconomic stability, debt reduction? vs.
currency appreciation?
Increased investment in Mining and Oil/Gas associated with
increasing socio/environmental conflicts in the region.
Oil prices rise, but investment in drilling activity falls.
Production/consumption ratio and reserves fall.
Oil Price boom, but production costs also rise.
Price WTI -Cost investment - - Costo operation -- . --
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Mundo
ALC
Mundo
ALC
Mundo
ALC
Mundo
ALC
Mundo
0
ALC
0
Mundo
500
ALC
50
Mundo
1000
ALC
100
Mundo
1500
ALC
150
Mundo
2000
ALC
200
Mundo
2500
ALC
250
Mundo
3000
2010
Upstream investment lag in LAC is worrisome and jeopardizes the region net
exporting position as supplier of oil & gas in world markets.
Fuentes: Baker and Hughes 2012, BP 2011, AIE 2011, IHS CERA 2012
Nota: Datos sin escala
Oil drills in activitiy
3500
300
ALC
Indice 2000=100
350
World drilling activity rises in response to price boom, not so
in LAC ( exceptions Brazil and Colombia)
Net Fiscal position has
historically been a deficit:
-Low saving rate
-Low tax burden
2005 - 2009
Fiscal
Dependence
on Resource
Revenues
Resource
Export
Dependence
(2007 peak year for
mineral/oil prices
before global
financial crisis)
Lower tax burden
relative to other regions.
Within Lat. America
resource exporters tend
to lower tax burdens.
Back to business
as usual after 2009?
2005 - 2009
Reserves / Production ratio is falling accross the region,
except in Venezuela ( shows decreased investment in upstream
exploration)
Lat. Am. w/o Venezuela
Lat. America
80
Gas Reserves fall 4x
70
60
VEN
50
Oil Reserves fall 2.5 x
VEN
40
1995
30
2000
2005
20
2009
2010
10
Total ALC
Total ALC s/Venezuela
Fuente: Comisión Económica para América Latina y el Caribe (CEPAL), sobre la base de BP2011.
Petroleo&GasNatural
Petróleo
Gas Natural
Petroleo&GasNatural
Petróleo
Gas Natural
0
Mineral and Metal price index after 2009
Source: World Bank commodity indexes 2011
Mining Sector 2004-2011
• Rents multiply x 4
• State appropriation < 33%
(benchmark int’l)
• Guatemala, Honduras < 13% of total
rent appropriated by State
• Private concesion regimes, State
participation the exception.
• Use of traditional fiscal instruments (
corporate income tax and royalties)
Oil&Gas sector
• Rents multiply x 2
• State appropriation 45-65%
• Apprent “Regressivity” of rent
appropriation during boom???
• State Oil companies are the rule.
• Use of progressive fiscal
instruments for rent capture
( windfall taxes, contratos PSC,
participación directa)
Need
to introduce PROGRESSIVE INSTRUMENTS i.e.
Resource Rent Taxes (RRT) etc.
• Price cycle generates investment
boom, growing production.
• POLICY CHALLENGE: How to achieve
more progressive fiscal regime?
Under current contract rules.
• Price cycle does not generate
investment boom
• Decreasing production
/consumption ratios and reserves
• Rising production costs.
• POLICY CHALLENGE: How to
mobilize required investment to
meet energy demand???
Increasing socio-environmental conflicts to project
development
Economic sector impacted
3% 3% 2%2%
AGRICULTURA
PESCA
GANADERIA
90%
COMERCIO
TURISMO
Elaborado con la información del Observatorio de Conflictos
Socio-Ambientales en América Latina (OLCA)
2013
Thank you very much!!!!
ANNEXES
Jean Acquatella Ph.D.
Energy and Natural Resources Unit
United Nations ECLAC
Economic Commission for Latin America and the
Caribbean
Santiago, Chile.
Jean.acquatella@cepal.org