TIRANA, Feb. 16 – Mining royalty, the key tax government collects from oil and mining companies, registered a significant decline in 2014 as fuel and base metal export prices sharply dropped in the second half of the year.
Customs authorities say they collected 6.26 billion lek (around Euro 44 million) in mining royalties in 2014, down 30 percent compared to 2013, registering the first annual decline after several years of rapid growth.
In its 2015 budget, government approved a decrease by one-third in the royalties applied on chromium products in a bid to encourage investments at home.
Royalties, which range from 4 percent for non-metallic minerals, 6 percent on chromium and copper and 10 percent on oil and gas operations rose to a record 8.5 billion lek (Euro 60 million) in 2013, up 20 percent compared to 2012, having grown by more than five time since 2009, when huge investments were made both in the oil and mining sectors.
Around three-quarters of the royalty is collected by the customs administration and the remaining part by tax authorities which shows the majority of production is destined for export.
In case of exports, 25 percent of the royalty payments go to local government units where companies operate.
Albania’s oil exports in the past eight years increased by more than 30 times, emerging as the key exports, mainly due to huge investments by Canada-based Bankers Petroleum which since 2004 operates and has full rights to develop the Patos-Marinza and Kuçova heavy oilfields under a 25-year concession contract with the Albanian government.
Mining has also attracted a series of foreign investments to Albania including Canadian, Austrian, Turkish and most recently Chinese ones.
Since 2013, the country’s biggest chromium mine of Bulqiza has been taken over by Albanian-owned Balfin Group. The Bulqiza mine employs 660 people and currently has an annual output of 82,000 tonnes of the lumpy ore and fines.
Since 1994, when a new mining law was approved soon after the communist system collapsed, Albanian mines have been explored by private companies under mining permits and concessions.
Albania has around 390 million tonnes of unexplored oil reserves, some 3 billion m3 of natural gas, 740 million tonnes of coals, 32 million tonnes of chrome, and hundreds of tones of other iron-ore and copper reserves, proving the country’s rich mineral reserves despite the small territory it occupies. The findings are revealed in the latest mineral resources map of Albania, an updated version of 1971 and 1989 publications during the country’s communist regime.
