Czech government likely to raise mining levies, revenues to increase by CZK 579 million

Mining companies’ levies are likely to rise by a few percent, as the government is preparing a new regulation to increase charges on some extracted minerals, including coal. Public budgets are expected to receive around CZK 579 million more annually from 2025, according to estimates. Municipalities and regions are expected to receive most of the additional revenue. This follows from a proposal by the Ministry of Industry and Trade (MPO), which the government will consider on Wednesday. Mining companies are likely to pass the higher rates on in their prices.

The proposal to raise the rates divides minerals into three main groups. The largest increase, around three percent in the calculated share of the rate relative to the reference price, is proposed by the ministry for surface-mined coal. It plans to add two percent, for example, to the rates for oil, natural gas, construction materials, high-grade limestone, other limestone and cement-making materials. The smallest increase, one percent, is proposed for so-called silicate materials, which include precious stones, gypsum, kaolin, basalt, feldspar, glassmaking and foundry sand, among others. The ministry says the lower increase is due to the fact that mining these minerals often faces competition from countries where the levy on extracted minerals is waived for these categories, and processing the materials is usually very energy-intensive.

The main aim of the rate changes is to increase public revenue. According to the explanatory memorandum, if current mineral extraction volumes are maintained, total revenue from mining levies should rise by CZK 579 million a year. Municipalities should receive the largest share, taking in around CZK 280 million annually. Approximately CZK 235 million a year in additional revenue should go to regional budgets, while the state budget should receive about CZK 64 million annually. However, the increased revenue will not be reflected until 2025, when charges for the previous year are settled at the new rates.

The rates are unlikely to remain at the same level for long, however. In the explanatory memorandum, the ministry noted that, for example, brown coal extraction is expected to become less economically viable after 2026 than it is now, and that the rates for this mineral will therefore be reviewed again by mid-2025 at the latest.

Mining companies will most likely pass on the higher costs to their customers in the future, so coal for households, for example, could become more expensive. „At present, however, it is not possible to estimate precisely how much or to what extent this will be passed on,“ the ministry said in a report to the government.

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