Product Sharing Agreements (PSA) in the Russian Mining Industry
Article from: OGEL 1 (2005), in Production Sharing Contracts
If one disregards all so-called transaction costs caused by switching to a product sharing regime, the product sharing agreement (PSA) is a splendid opportunity to overcome tax, license and other challenges present now in the mining industry. A few words about the essence of the Russian model of the PSAs. Produced product is divided into two parts: the first one is a compensatory product used to cover mining and primary processing costs; the second is the profit part, which remains after deducting the costs of production Royalty (mining tax), of course, is being withheld first. The ...