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Russia may cut coal taxes to spur new fields – paper

Russia may halve taxes on coal production from 2009 as it seeks to spur development of new fields to encourage bigger use of coal instead of gas in power generation, a newspaper reported on Wednesday.

Kommersant business daily said the lower house of parliament, the Duma, has revived the idea of amendments to the tax code to cut mineral extraction tax rates on coal. The Duma may debate the amendments in May and if approved, they would come into force from next year. The newspaper said almost all big coal producers, such as SUEK, as well as steel companies would benefit from the new rates, which are likely to fall to 40 rubles ($1.68) per ton of coking coal and 9 rubles per ton of thermal coal. The current rates are set at 4% of revenues from primary product sales, which translates into 24 rubles per ton of thermal coal and 80 rubles per ton of coking coal. (Reuters)