Quebec proposes new mining tax

Quebec has proposed a new mining tax which is a hybrid regime.

The new scheme has two parts. First, a minimum royalty will be applied to all mining companies, regardless of earned profits or not, based on their mined output. Second, a progressive mining tax will also be calculated, based on the profit margin. Companies must pay the higher of the two amounts.

The new tax will generate up to $200 million in 2015 for the province, according to the Globe and Mail. In the next dozen years, cumulative revenues could be up to $1.8 billion.

The Quebec Mining Association said it wasn't a good time to change the rules and some companies may end up delaying their projects.

Canadian-based gold producer Agnico-Eagle Mines, which has three mines in Quebec, told Reuters the overall impact on its operations appeared to be minor. The firm also said it hoped the new plan would restore stability and investor confidence in the industry for the long-term.

Image courtesy Agnico-Eagle