Chinese Ministry of Finance and the State Administration of Taxation have jointly decided to adjust taxable standards of resource tax on lead/zinc ore, copper ore and tungsten ore as start on August 1, 2007.

     According to a circular on adjustment of resource tax on the abovementioned mineral products jointly issued by the two departments, resource tax on lead, zinc, copper and tungsten ore will rises by a big margin next month, which will be the first adjustment of the tax in more than ten years.

     The taxable standard for lead/zinc ore is changed to 20 yuan/ton for first-class mine from four yuan; 18 yuan/ton for second-class mine from 3.5 yuan; 16 yuan/ton for third class from three yuan; 13 yuan/ton for fourth class; and ten yuan/ton for fifth class.

     The taxable standard for copper ore is adjusted to seven yuan/ton for first-class mine from 1.6 yuan; 6.5 yuan/ton for second class from 1.5 yuan; six yuan/ton for third class from 1.4 yuan; 5.5 yuan/ton for fourth class; and five yuan/ton for fifth class.

     The taxable standard for tungsten ore is adjusted up to nine yuan/ton for third-class mine from 0.6 yuan; eight yuan/ton for fourth class from 0.5 yuan; and seven yuan/ton for fifth class from 0.5 yuan. China has not adjusted the resource tax since it started in 1993.

     The adjustment of the tax is aimed to ease the contradiction between the high prices of resource products and low resource tax, which may play a role in checking the excessive expansion of production of the above sectors, and promoting orderly development of the whole industry.

     The tax adjustment will exert impact on several listed companies including Jiangxi Copper and Yunnan Copper.

     In fact, a new round of reform of resource taxes had already started in 2004. China has adjusted tax standards on such resource products as coal, crude oil, natural gas and manganese ore.

     The country also abolished the preferential policy of 30 percent reduction of resource tax on nonferrous minerals in 2006, and adjusted the resource tax levy on iron ore to 60 percent.

     According to a working plan energy saving and pollutant discharge reduction issued by the State Council, the country will step up issuance of the reform scheme on resource tax, improve levying methods and raise tax burden.