Kazakhstan's miners, planning USD 16.5 billion drive to double metals output by 2015, are urging the government of Central Asia's largest economy to abandon plans for export tariffs that they say could harm productivity.

The Association of Mining and Metallurgical Enterprises which unites Kazakhmys, ENRC and more than 60 other Kazakh metal firms would favor a profit based tax.

Mr Nikolai Radostovets ED of AMME said that "The experience of many countries shows that, where there is no domestic demand, export tariffs have negative consequences a decline in production and in the end, sales. We are now at the negotiating table. It's a very serious issue."

Mr Radostovets said that “A tax on excess profits would be a more effective way to regulate Kazakh producers of copper, chrome, zinc, steel and precious metals. Export tariffs would simply confiscate working capital.”

He said that “Civilized countries levy taxes on excess profits and such an effective mechanism exists in Kazakhstan. An export levy would be unnecessary as Kazakhstan has no large domestic metal-processing industry to protect. Most of the country's metals are exported. He added that were we to have the companies to process our metal in large quantities, an export tariff might be justified.”

Mr Karim Masimov PM of Kazakhstan said that "Mineral resources belong to the people of Kazakhstan and I believe the budget should collect a portion of these royalties in the form of a customs tariff."
Metals and their ores account for about one fifth of exports from Kazakhstan, where almost 2% of the population works in the metallurgical sector. The government has unveiled plans to tax exports in 2011 after restoring a levy on oil shipments.

Kazakhstan, which aims to channel income from oil and metals sales to diversify its resource dependent economy, has shown a willingness to compromise before. It abandoned plans two years ago to introduce an export tariff as the economic crisis struck.

(Sourced from Alibaba.com)