Page 132 - RusRPTSept21

in Russia, the government could more actively adopt mitigation measures. The main risk facing RusHydro is building generation assets in the Russian Far East without a guaranteed ROIC, which would result in massive impairments. The worst-case scenario would be direct state financing via cash injections in HYDR’s equity without a guaranteed ROIC, which would dilute the stakes held by existing shareholders.
9.1.11 Metallurgy & mining sector news
Russia's president Vladimir Putin said that mineral extraction tax (MET or NDPI) will be hiked for metal miners as of January 1 2022, Vedomosti daily wrote on August 7 citing the televised address on Rossiya 24 channel.
As followed by bne IntelliNews, in the previous months regulatory pressure has been building up on the metals sector, boosted by record-high prices, resulting in the adoption of one-off six-month export duties.
Putin reminded that Russian metals majors are "trying to maximise the profits" by exporting amid high global prices, which leads to higher prices domestically and spills over to such sectors as construction through higher cost of materials.
He reminded that the government has already introduced a one-time export duty increase and said that "it seemed to him" that MET will also be hiked as of January 1 2022.
Previously the Ministry of Economic Development estimated that the metals and mining sector posted RUB570bn profit in 1Q21, soaring 3.5-fold year on year, and could reach up to RUB2.3 trillion for 2021 overall.
Vedomosti linked the announcement to previous unconfirmed reports of "fine tuning the tax system" by the government to raise an extra RUB400bn annually, out of which RUB100bn could have been tapped through higher MET in the metals sector.
As analysed by bne IntelliNews, Russia is raising taxes for the first time in twenty years, with a progressive personal income tax introduced in 2020, and revisions of offshore double taxation treaties taking dividend tax to a 15% rate.
TMK reported its 2Q21 IFRS results on August 25. TMK’s overall pipe sales were up 60% q/q to 1,130kt, with the acquisition and consolidation of Chelpipe responsible for much of the increase. Seamless pipes sales grew
132 RUSSIA Country Report September 2021 www.intellinews.com