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A Response to the OECD’s Provision on Activities in Connection with the Exploration and Exploitation of Extractible Natural Resources

2 February 2024


The mining industry plays a vital role in supplying materials for the global energy transition and meeting carbon reduction goals. To support this, new sources for critical metals are necessary. While profits should be taxed as agreed with sovereign states, governments should limit trade barriers to promote investment in the new mines the world needs.

In November 2023, the Organisation for Economic Co-operation and Development (OECD) and the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), opened public consultation on Determining the Price of Minerals – A transfer pricing framework for Lithium.   

In our response, we highlight that the future of resource taxation, including clear tax rules with appropriate and administrable ways to allocate taxing rights to reduce and eliminate double taxation, is extremely important for a responsible mining industry. 

We believe that: 

  • Clarity on transfer pricing is important for both governments and companies. It contributes to responsible mineral resource governance. 
  • While it is helpful to provide specific guidance on the application of Transfer Pricing principles to certain industry sectors, it is important that any guidance be aligned with those principles, and not compromise or bypass critical elements of the analysis that must be completed to appropriately calculate arm’s length prices which are aligned with the OECD Transfer Pricing Guidelines.  
  • From an investment perspective, certainty, and consistency in the application of tax and legal systems governing a mining investment, including Transfer Pricing guidelines, is a critical part of assessing potential risks and rewards before the spend is committed. It is therefore important to have consistent frameworks and guidance such as the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations edition (the “OECD Transfer Pricing Guidelines”) referred to in this response, and the UN Practical Manual on Transfer Pricing for Developing Countries which is equally applicable.