Royalties, which vary 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.
TIRANA, July 23 – The rapid development of the oil and mining industry in the past five years, recently emerging as Albania’s top exporter has also increased their share to total government revenue. A study conducted by Open Data research centre shows mining royalty, the key tax levied on oil and mining companies, increased its share to total government revenue to 2.61 percent, up from a mere 0.54 percent in 2009.
Royalties, which vary 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 Ku谶a heavy oilfields under a 25-year concession contract with the Albanian government.
A study carried out by Open Data research centre shows that Albanian oil exports reached around 1 million tonnes, worth 56.7 billion lek (Euro 396 million) in 2012, up from 41.7 billion lek in 2011 (Euro 291 million) in 2011 and a mere Euro 13 million in 2005 just before the signing of the first concession contracts in Albania’s oil sector.
However, due to the poor quality of Albania’s crude oil and lack of processing industry, Albania meets almost all of its oil needs with imports. The Albanian oil is exported and mainly processed as bitumen, which is used in road reconstruction.
Mining has also attracted a series of foreign investments to Albania including Canadian, Austrian, Turkish and most recently Chinese ones.
The AlbChrome Bulqiza mine concessionaire has recently undertaken a $20 million well drilling investment in the country’s biggest chromium mine in an effort to extract 2.1 million tons of chromium from this well, says the energy and industry ministry.
Balfin Group, owned by Albanian businessman Samir Mane, is the biggest operator in the Bulqiza mine. In early 2013, Balfin acquired the ACR Albanian subsidiary of Austria-based DCM Decometal which had been operating the Bulqiza chromium mine since 2007 for an undisclosed amount. The mine had been previously managed by Italy’s Darfo.
The Bulqiza mine employs 660 people and currently has an annual output of 82,000 tonnes of the lumpy ore and fines, at a grade of 40-45 percent chromite.
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.
