How does the corporate AMT affect the profitability of the mining industry

1. Higher Effective Tax Rates: The mining industry is one of the sectors most heavily impacted by the corporate AMT. Data shows the mining industry saw some of the largest increases in effective tax rates under the AMT, with rates rising by 4-6 percentage points compared to the regular corporate tax.

2. Reduced Cash Flow: The higher effective tax rates imposed by the AMT reduce the cash flow available to mining companies for investment and operations. This can be particularly challenging for capital-intensive industries like mining.

3. Limitations on Tax Credits and NOLs: The AMT places restrictions on the ability of mining companies to fully utilize tax credits and net operating losses (NOLs) to offset their tax liability. This further erodes the benefits of these tax attributes.

4. Disproportionate Impact: The mining industry is disproportionately affected by the corporate AMT compared to other sectors. Data shows a much higher percentage of mining companies pay the AMT compared to the overall corporate average.

5. Challenges for Exploration Financing: The AMT's impact on high-income individual investors has made it more difficult for mining exploration companies to raise capital through flow-through share financing, which is a critical funding source for the industry.

In summary, the corporate AMT imposes a significant tax burden on the mining industry, reducing profitability through higher effective rates, constrained cash flow, and limitations on tax attributes. This disproportionate impact makes the mining sector one of the most affected by the AMT provisions.