ABSTRACT
The mining firm does not know the future price it will receive for output, costs it will face for inputs, or tax and regulatory regime it will be presented with by government, any more or less than a manufacturing firm does. The reason for profits taxation for mining companies usually being different from general profits taxation is twofold. First, the profits taxation is generally intended to capture part of the rents generated by mining, which other companies are not assumed to enjoy to the same extent. Second, the peculiar characteristics of mining suggest that some form of special treatment should be given to capital investment in mining, either by special depreciation or capital-expensing rules, or in some other way. On the more general point of achieving firm conformation to government objectives, it should be noted that it is probably unrealistic to try to achieve this solely through taxation.
