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Commodity Trading: Understanding the tax-related challenges for home and host countries

Minerals and metals are, and will remain, the material foundation for all societies. 

Mining, minerals and metals are particularly important to emerging economies, both as a source of income for government and as input to build infrastructure of all types to provide basic consumer goods such as vehicles, refrigerators and other appliances. In the near future, the necessity to shift to fossil fuel-free energy will increase the demand for minerals and metals considerably.

There is also a legal aspect of natural resources, including minerals and metals, that is increasingly highlighted and appreciated. Commodity markets are global, and the trade in minerals and metals is growing. A growing share of mining takes place in developing countries, while a major part of demand for minerals and metals originates in China and in the industrialized countries.

In order to understand the role of metal trading companies and the potential tax risks their activities create, it is necessary to present some basic facts about the mineral and metal markets, including which minerals and metals are most important, where they are produced and the key steps from mining to refining.