The Russian parliament (Duma) has passed the bill on mineral extraction tax (MET) amendment and excise tax on liquid steel application after its third and final reading. The measures will include electric arc furnace producers on special terms.
According to the adopted bill, blast furnace-produced steel products will be subject to tax of 2.7% of average monthly export price of slab sold from southern Russian ports on an fob basis. The tax will not be applied should the price of slab fall below $300/tonne.
Producers using the foundry method and producing less than 1,000 tonnes/month of steel will be exempt from the duty. So will producers in the heavy engineering, defence, electronics and radio-electronics, and shipbuilding sectors, and producing no more than 300,000 t/y of steel, Kallanish notes.
The excise tax for EAF scrap-based producers with no less than 80% scrap in the charge will be applied differently. It will be calculated as a 0.3 factor applied to the difference between fob southern ports export price of billet and cpt Urals Federal District A3 scrap price. This will be minus half of ferroalloy and alloying element costs per tonne of steel.
The MET on iron ore is set at 4.8% and on coking coal at 1.5%. These duties will replace export duties on steel applied since 1 August and expiring on 31 December at 15% and a minimum fiscal value of $54/t for HBI and pig iron and $115/t for steel products.
Major Russian producers estimate these new duties will cost them up to $300 million per year (see Kallanish passim).
