Quebec mining royalties reached a record high of $304 million last year. The Quebec Treasury had expected only about $133 million from the mining royalties in the budget last March. The amount is also higher than the $289 million collected over the last 10 years.
The spectacular increase in mining royalties in the Canadian province is in part due to the changes in the royalty regime that the government made and in part from the increased production volume of mines operating in the province. The royalty rate has been hiked from 12% in 2009 to 14% in 2010. The royalty rate for next year will be 16%.
The province expects the revenue generated from the mining industry royalties to average $365 million annually over the next four years giving the treasury a total of $1.4 billion. This is higher than the estimated $327 million which it would have earned had the royalty rate not been increased.
The higher volume of mining material being extracted along with the higher prices these are being sold for also accounted for the more than 50% increase in the royalties. Quebec is one of the 10 largest producers in the world in the mining sector. There are close to 30 mines operating in Quebec producing gold, iron, titanium, asbestos, copper, zinc, and silver along with 158 exploration companies and fifteen primary processing industries. Most of these mineral resources have seen their prices rising in the last few years steadily.
Only 40% of the mineral potential of Quebec is currently known. In 2003, the value of mineral exploitation reached Quebec 3.7 billion Canadian dollars.