11 August 2014
Bezant Resources Plc
("Bezant" or the "Company")
Potential Changes to Mining Tax Laws in the Philippines
Bezant (AIM: BZT), the AIM listed copper-gold exploration and development company operating in the Philippines and Argentina, notes the recent proposal regarding potential adverse changes to the Mining Tax Laws in the Philippines.
For approximately the last two years, the Philippines Government has been undertaking an extensive review of all aspects of its domestic mining industry covering, inter alia, licence ownership, development pathways and financial and social obligations (the "Mining Review"). This review forms part of the Philippines Government's on-going drive to restructure most of the country's major domestic industries.
It has recently been reported in the Philippine press that the Mining Industry Coordinating Council ("MICC"), a civil service body, is putting forward a proposal for a revenue-sharing scheme for mining companies whereby the Philippines Government would receive 55 per cent. tax on a mining operation's adjusted net revenue or 10 per cent. tax on its gross revenue, plus a percentage of windfall profit, whichever is higher. In order for MICC's proposal to become law, MICC must submit its proposal to the President of the Philippines who must then put an appropriate bill to, firstly, Congress and secondly to the Senate for their approval. To date, the MICC has not confirmed that its proposal has been formally submitted to the Philippines President and there is no fixed time period by which the Philippines President would thereafter be required to pass the proposed bill via Congress and the Senate for approval.
The Chamber of Mines of the Philippines ("COMP") has expressed its opposition and concerns with respect to the abovementioned tax proposal. Bezant is currently working with certain other major operators in the Philippines mining sector to seek to consult with the MICC and the Philippines Government in order to outline how such a revenue-sharing scheme would potentially adversely affect inward investment for the Philippines. As the Mining Review was nominally initiated as part of a private sector-wide plan to liberalise the Philippines' domestic economy (the majority of the country's GDP stemming from remissions from workers overseas), Bezant's Board believes that the current MICC proposal is seemingly at odds with this objective.
Shareholders should note that any changes to the Mining Tax Laws in the Philippines have yet to be confirmed and there can be no certainty as to the final form and timing of any such changes. A further announcement will be made as and when appropriate.
Bernard Olivier, Chief Executive Officer, commented:
"We firmly believe that both the community and country in which a mining project is located should benefit from any future mining activities that are conducted in a responsible and sustainable manner. However, the tax structure and fiscal regime of the host country should be of a reasonable nature and internationally competitive in order to attract and maintain the requisite foreign investment.
The proposed revised tax structure for the Philippines mining sector is already having a negative impact on our ongoing discussions with interested parties regarding the potential sale or JV of our flagship Mankayan Project. Accordingly, we fully support COMP in its opposition to MICC's proposal and concur with its view that the proposed revised tax regime is neither equitable nor internationally competitive."
For further information, please contact:
Bernard Olivier Chief Executive Officer, Bezant Resources Plc Laurence Read Non-Executive Director, Bezant Resources Plc James Harris / Matthew Chandler / James Dance Strand Hanson Limited James Maxwell N+1 Singer or visit http://www.bezantresources.com |
Tel: +61 40 894 8182 Tel: +44 (0)20 3289 9923 Tel: +44 (0)20 7409 3494 Tel: +44 (0)20 7496 3000 |
Notes to Editors:
Presidential Executive Order No. 79 was issued on 6 July 2012 with the objective of institutionalising and implementing reforms in the Philippine mining sector and providing policies and guidelines to ensure environmental protection and responsible mining in the utilisation of mineral resources. Section 9 of the Executive Order created the Mining Industry Coordinating Council ("MICC") as an intra-government agency.
MICC was given wide ranging powers and functions to propose reforms related to the mining industry and ensure continuing dialogue and coordination among all industry stakeholders.
Bezant currently holds a Mineral and Production Sharing Agreement ("MPSA") in respect of its flagship Mankayan copper/gold project situated in the Mankayan-Lepanto mining district of the Philippines. An MPSA specifies a two per cent. excise tax on gross sales of production, as well as regular corporate income tax and payments for indigenous people affected by mining operations. Income tax is either the higher of Regular Corporate Income Tax ("RCIT") of 30 per cent. of taxable income or Minimum Corporate Income Tax ("MCIT") of 2 per cent. of Gross Income.
