ICMM publishes tax principles for a sustainable mining industry alongside ICMM members’ social & economic contribution in 2023
- More investment in mining is needed for the energy transition and to optimise the benefits of mining for host citizens.
- ICMM members paid corporate income tax and royalty payments of US$54.2bn in 2023, employed 561,800 people, paid US$ 39.1bn in wages and related payments and US$187.2bn to suppliers. Community and social investment totalled US$1.4bn.
- ICMM has identified tax policy principles and six tax design elements for tax systems that encourage sustainable mining investment and provide a foundation for constructive dialogue between the mining industry and governments.
London, UK – Today, ICMM has disclosed the social and economic contribution made by ICMM members to host countries during the 2023 reporting period. A briefing paper, also published today, examines tax policy principles and tax design elements to support governments and mining companies to collaborate on responsible mine development and optimising the benefits of mining for local communities.
ICMM Members’ 2023 Tax Contribution
In 2023, ICMM members reported Corporate Income Tax (CIT) and royalties of US$54.2bn and decrease of 0.7% from 2022. This number includes $38.8 in CIT, down 3.6% from 2022 and US$15.5bn in royalties paid, up 5.1% from 2022. Since 2013, ICMM members have reported US$325.6bn in total CIT and royalty payments. When compared to total adjusted profits of US$888.8bn reported over the same period, this translates to US$36 out of every US$100 of profit earned by members being paid in CIT and royalties.
Collectively, ICMM members reported having 561,800 employees, and disclosed wages and related payments of US$ 39.1bn (2022 - US$37.3bn), payments to suppliers of US$187.2bn (2022 – US $166.2bn) and community and social investment totalling US$1.4 bn (US$1.5bn) in 2023.
ICMM members believe that transparently disclosing corporate income tax and royalty payments, employee wages, payments to suppliers and their community investment provides important context for understanding the economic contribution mining makes. The data helps companies to demonstrate accountability, enabling communities and civil society to hold governments to account for how revenues are used.
The report is also intended to inform global conversations on investment in the mining sector, financial return on resource extraction, and global taxation policy. To this end, ICMM has published a second report that explores global taxation policy.
Unlocking Prosperity: Tax Principles for Sustainable Mining
It is estimated that by 2030, the required investment to meet demand for the minerals and metals needed for the global energy transition will be between US$360-450 billion.[1] Investment in mineralrich countries will be critical, supported by stable tax environments that help countries unlock their economic potential and drive wider development.
ICMM’s Unlocking Prosperity: Tax Principles for Sustainable Mining briefing paper, sets out tax policy principles and six tax design elements that support responsible mine development and optimise the benefits of mining for host citizens. This includes royalty payments, corporate income tax, deductions and incentives, international competitiveness, fiscal stability and administration and transparency.
These principles and design elements have been applied to three scenarios across Latin America, Africa and Canada, US and Australia to show how, by using different tax levers, governments can foster productivity and an effective investment environment. The findings emphasise that there is no ‘one-size fits all’ approach to tax policy. The report does not prescribe specific tax regimes of a reform agenda but rather an analysis of different leading practice tax policy design elements and the possible social and economic gains and costs of applying them.
At a time when public finances globally are stretched thin, I’m very proud that the mining industry stands tall in our contributions to our host countries’ national wealth. ICMM members are often amongst the biggest employers, largest purchasers from local businesses, and the most significant taxpayers where we operate, all while producing the materials that make modern life and the energy transition possible.
“These contributions to host countries are made possible by investments in projects that are long-term, involve significant upfront capital investment, and often face several unforeseen risks. For these reasons, it is vital that governments design fiscal regimes that encourage responsible mining investments for the common good, and this paper provides important perspectives in that regard.
This analysis couldn't be more timely, as the mining and metals industry navigates a complex landscape of challenges and opportunities. The race for minerals and metals required for the energy transition is accelerating, and so, too, are a range of government incentives and restrictions. It is critical that mining companies forge strong relationships with governments – together they can be a powerful force for change. We believe this report will foster a knowledgeable and productive discussion on developing tax systems related to mineral resources and extraction activities. Getting the balance right for mutually beneficial outcomes has never been more critical.
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Notes
1. https://www.iea.org/reports/energy-technology-perspectives-2023/mining-and-materials-production
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Notes to Editor
- The 2023 Tax Contribution Report can be downloaded here
- ICMM’s Unlocking Prosperity: Tax Principles for Sustainable Mining can be downloaded here
About ICMM
ICMM stands for mining with principles. We bring together a third of the global metals and mining industry, along with key partners to drive leadership, action and innovation for sustainable development, ultimately delivering a positive contribution to society. Through collaboration, ICMM member companies set the standard for responsibly produced minerals and metals in a safe, just and sustainable world.
