Monitoring the Value of Mineral Exports

In the mining sector royalties and income taxes are usually levied on the price of the mineral, multiplied by the volume. The price might be the actual sale price received or the relevant quoted price, if there is one. Consequently, government revenue depends on mineral products being priced and measured accurately.

This practice note aims to increase policy-makers' knowledge of the process of determining the value of exported minerals. The focus is determining the value (or quality) of mineral exports, not the quantity. While there is a risk that companies may underestimate both, verifying the value of minerals is more complex and requires more technical expertise. Additionally, most governments have some measures in place to verify quantity—for example, draft surveys to calculate the weight of a ship carrying minerals for export—whereas the skills, expertise, and facilities to monitor mineral value are lacking.

Having laid the foundation, this practice note outlines three main policy options for improving government oversight of mineral product export valuation, including:

• direct measurement of mineral value,
• monitoring companies' own mineral export valuation processes, and
• a hybrid approach.

The goal is that policy-makers will be equipped to make informed, risk-based decisions on how best to monitor the value of mineral exports.