China to slash taxes for domestic iron ore miners
The Chinese authorities plan to slash the total tax rate for domestic iron ore miners by up to 50%
CNFOL.com cites unnamed "authoritative sources" as saying that the Ministry of Industry and Information and Technology (MIIT) is teaming up with the Ministry of Finance and the State Council to work on a proposal which could reduce the tax burden for the country's ore producers by up to a half.
According to the source the current total tax for iron miners of 25% is considered by the authorities to be excessive, and MIIT is seeking a reduction of between 10 and 15 percentage points.
Reuters notes that China's domestic iron ore producers have been unable to compete with international mining giants such as Rio Tinto (ASX:RIO) and BHP Billiton (ASX:BHP) due to burdensome operating costs, compelling local steelmakers to turn to cheaper, higher quality imports.
While the average cost of producing iron ore in China, the grade for most of which is as low as 20%, is between $90 – $100 per ton, higher quality iron ore produced in the nearby OECD nation of Australia costs miners only $30 – $50 per ton to produce.