TAXATION POLICY AND MINERAL INVESTMENT

Over the past several years, the world has witnessed a tremendous incr ease in the number of opportunities for investing in mineral ventures. Worldwide, the demand for funds for mineral investment exceeds the av ailability of such funds. Developed countries and developing countries are actively competing internationally to attract mineral investment. In setting mineral policy, government must recognize the most importa nt factors that mining enterprises and investors take into account whe n considering a mineral investment. These factors include a country's geological endowment, foreign ownership regulations, land tenure rules , taxation and legal framework, and political risk. The development of a sound mineral policy should assign an appropriate weight to each of these factors. This article, which is based on a presentation by the author on the occasion of the 50th anniversary of the University of Mi ning and Metallurgy at Ostrava, Czech Republic, discusses the role of taxation in the formulation of mineral policies and in the investment decision-making process. The article addresses important questions suc h as: What role does taxation play in the investment decision in the c ontext of other factors? How important is taxation in the formulation of a country's mineral policies? The article also examines the charact eristics of an attractive mineral taxation regime, considers the need for fiscal incentives, and compares alternative forms of ''economic re nt'' from the perspective of both the state and the mining enterprise.