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Mineral Pricing

The Challenge

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

However, pricing is not always straightforward. It may be complicated by the different stages of mineral beneficiation, the lack of publicly quoted prices for some minerals, and any adjustments based on the quality or grade of the product, as well as deductions for transport and insurance costs.

These factors can be even more complicated in the case of related-party sales, where there is an incentive to set artificially low prices to reduce taxable income in the mining country and shift profits offshore.

Unless governments are confident that the values declared by companies are accurate, suspicion and doubt will continue to erode trust between government and industry, which in turn affects companies’ social licence to operate. And if the value is being under-reported, governments can lose millions in tax revenues.

Our Response


The IGF-OECD practice note, Determining the Price of Minerals: A Transfer Pricing Framework provides practical and meaningful guidance for developing countries to accurately delineate the transaction and price of mineral sales to support revenue collection in the mining sector. To complement this practice note, we have published applications of this framework to specific minerals. Bauxite and lithium are available below, with additional minerals to be published over time.


This practice note aims to increase policy-makers knowledge of the process of determining the value of exported minerals and support informed, risk-based government decisions on how best to monitor the value of mineral exports.