Report on payments to governments for the year 2021

30 June 2022

Polymetal issues the report on payments to government for the year ended 31 December 2021.

INTRODUCTION

This Report provides an overview of the payments to governments made by Polymetal International plc and its subsidiary undertakings (hereinafter referred to as “Polymetal”) for the year 2021 as required under the UK’s Report on Payments to Governments Regulations 2014 (as amended in December 2015). These UK Regulations enact domestic rules in line with Directive 2013/34/EU (the EU Accounting Directive (2013)) and apply to large extractive companies, whose securities are publicly listed on a UK-regulated stock market, that are involved in the exploration, prospection, discovery, development and extraction of minerals, oil, natural gas deposits or other materials. This Report is also intended to satisfy the requirements of the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom. 

BASIS OF PREPARATION

Legislation

This report is prepared in accordance with The Reports on Payments to Governments Regulations 2014 as enacted in the UK in December 2014 and as amended in December 2015.

Reporting entities

This Report includes payments to governments made by Polymetal. Payments made by entities over which Polymetal has joint control or significant influence are excluded from this Report.

Activities

Payments made by Polymetal to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals are disclosed in this Report. It excludes payments related to refining activities made to the refineries owned by the government agencies and any payments which are not directly attributable to the production and exploration activities.

Government

Government includes any national, regional or local authority of a country, and includes a department, agency or entity that is a subsidiary of a government.

Project

Payments are reported at project level except that payments that are not attributable to a specific project are reported at legal entity level. Project is defined as operational activities which are governed by a single contract, or licence agreement, and form the basis for payment liabilities with a government. If such agreements are substantially interconnected, those agreements are to be treated as a single project.

“Substantially interconnected” means forming a set of operationally and geographically integrated contracts, or licence agreements that are signed with a government giving rise to payment liabilities. Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.

License agreements are aggregated for the purposes of reporting as a single project only when those legal agreements have substantially similar terms and are both geographically and operationally integrated.

Payments

The information is reported under the following payment types:

Income taxes

These are taxes paid by Polymetal on its income and/or profits in accordance with legislation enacted in the applicable jurisdiction. Payments are reported net of refunds. Value added tax, personal income taxes, social taxes, property taxes are excluded.

The maximum income tax in Russia is set at a rate of 20% and is allocated between federal budget and the budgets of the relevant constituent regions. In 2021 and 2020 the following proportion was applied: 3% allocated to the federal budget, whereas 17% allocated to the regional budgets. From 1 January 2017 Omolon Gold Mining Company LLC and Magadan Silver JSC are entitled to the decreased statutory income tax rate of 17% for the operations held in the Special Economic Zone of the Russian Far East, as well as decreased mining tax rate (paying at 60% of the standard mining tax rates). In return for obtaining this tax relief the members of the regional Special Economic Zone are obliged to invest 50% of their tax savings each year in the Special Economic Zone Development Program. From 1 January 2016 Svetloye LLC was subject to tax relief as a participant in a Regional Investment Project and was entitled to decreased mining tax rates and the statutory income tax rate of 0% up to 2021.

In Kazakhstan income tax is set at a rate of 20% and there is no allocation for regional or local income taxes in this country.

Mining tax

Mining tax is a royalty payable in Russian Federation and Kazakhstan, which is calculated based on the value of the precious metals extracted in the period. In Russia this value is usually determined based on the realised selling price of precious metals or, in case if there were no sales during the period, cost of production of metals extracted. In Kazakhstan the value is determined based on the market price whether or not there were sales during the period.

Mining tax in Russia is levied at federal level, and then is reallocated between federal and respective regional budgets based on the following proportion: 40% of total tax collected is transferred to the federal budget, 60% to regional budgets. Mining tax and royalties in Kazakhstan are levied at republican level.

Licence fees

These are fees and other sums paid as consideration for acquiring a licence for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to access to extractive resources, are excluded.

Rental fees

The land in the Russian Federation and Kazakhstan on which the Group’s production facilities are located is owned by the state. The Group leases this land through operating lease agreements.

Other payments

Other payments include enviromental emission fees, and also payments made and social commitments in accordance with subsoil contracts attributable to the Kyzyl project and investment in the Special Economic Zone Development Program of Omolon Gold Mining Company LLC and Magadan Silver JSC.

Cash and in-kind payments

Payments are reported on cash basis. No in-kind payments were made during years ended 31 December 2021 and 31 December 2020.

Materiality Level

Any payment, whether made as a single payment or as a series of related payments, below GBP 86,000 within a financial year is excluded from this Report.

Payments made to governments by joint ventures or associates of the Group in proportion to the company’s interest in the respective venture or associate are insignificant to this Report based on materiality level set.

Exchange Rate

Relevant payments are made by Polymetal in Russian Rubles and Kazakh Tenge and for the purpose of this Report are translated to the US Dollar based on the foreign exchange rate at the relevant monthly average rate.

PAYMENTS PER GOVERNMENT

 

 

 

 

 

 

 

 

FOR THE YEAR 2021

 

 

 

 

 

 

 

 

 

Government 

000’$

Income tax

Mining tax

Rental fees

Licence fees

Other

Total

 

 

 

 

 

 

 

 

 

 

Kazakhstan

 

 

 

91,712

41,870

-

-

10,8081

144,390

Russia

123,407

92,965

4,734

175

18,7552

240,036

Total

 

 

 

215,119

134,835

4,734

175

29,563

384,426

 

 

 

 

 

 

 

 

 

PAYMENTS PER

PROJECT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entity

000’$

Project

Country/ Government

Region

Income tax

Mining tax

Rental fees

Licence fees

Other

Total

 

 

 

 

 

 

 

 

 

 

Bakyrchik Mining Venture LLC

Kyzyl

Kazakhstan

n/a

73,975

27,325

-

-

7,4081

108,708

Varvarinskoye JSC

Varvara

Kazakhstan

n/a

10,919

1,540

-

-

523

12,982

Komarovskoye Mining Company LLC

Komar

Kazakhstan

n/a

6,818

13,005

-

-

2,877

22,700

Gold of Northern Urals CJSC

Voro

Russia

Svedlovskaya oblast’

8,617

4,985

138

-

-

13,740

Saumskaya Mining Company LLC

Saum

Russia

Svedlovskaya oblast’

2,880

1,481

-

-

-

4,361

Svetloye LLC

Svetloye

Russia

Khabarovskiy Kray

-

5,389

443

-

-

5,832

Magadan Silver JSC

Dukat

Russia

Magadanskaya oblast’

49,270

24,172

694

-

10,3602

84,496

Mayskoye Gold Mining Company LLC

Mayskoye

Russia

Chukotka Autonomous Okrug

4,886

18,605

-

-

-

23,491

Omolon Gold Mining Company LLC

Omolon

Russia

Magadanskaya oblast’

29,001

14,285

534

175

8,0082

52,003

Albazino Resources Ltd

Albazino

Russia

Khabarovskiy Kray

29,626

24,821

1,225

-

251

55,923

GRK Amikan LLC

Veduga

Russia

Krasnoyarskiy Kray

(873)3

(773)3

294

-

-

(1,352)3

South-Verkhoyansk Mining Company JSC

Nezhda

Russia

Yakutia

-

-

305

-

136

441

Kutynskaya Mining Company LLC

Kutyn

Russia

Khabarovskiy Kray

-

-

1,101

-

-

1,101

Total

 

 

 

215,119

134,835

4,734

175

29,563

384,426

Notes:
(1) In accordance with a memorandum with East-Kazakhstan Oblast Administration (local Kazakhstan government) Polymetal participates in financing of certain social and infrastructure development project of the region. During the year ended 31 December 2021 Polymetal paid $4,598 thousand under this programme.
(2) Includes payments under Special Economic Zone Development Program of $7,930 thousand for Omolon Gold Mining Company LLC and $10,325 thousand for Magadan Silver JSC.
(3) During the year ended 31 December 2021 GRK Amikan LLC received reimbursement of income and mining taxes from tax authorities that were paid during previous periods.

PAYMENTS PER GOVERNMENT

 

 

 

 

 

 

 

 

FOR THE YEAR 2020

 

 

 

 

 

 

 

 

 

Government 

000’$

Income tax

Mining tax

Rental fees

Licence fees

Other

Total

 

 

 

 

 

 

 

 

 

 

Kazakhstan

87,813

39,241

-

3,668

8,7711

139,493

Russia

158,843

86,066

2,588

1,220

12,6682

261,385

Total

 

 

 

246,656

125,307

2,588

4,888

21,439

400,878

 

 

 

 

 

 

 

 

 

PAYMENTS PER

PROJECT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entity

000’$

Project

Country/ Government

Region

Income tax

Mining tax

Rental fees

Licence fees

Other

Total

 

 

 

 

 

 

 

 

 

 

Bakyrchik Mining Venture LLC

Kyzyl

Kazakhstan

n/a

55,177

29,396

-

3,668

6,9971

95,238

Inter Gold Capital LLC

Kazakhstan

n/a

118

-

-

-

-

118

Varvarinskoye JSC

Varvara

Kazakhstan

n/a

28,707

-

-

-

605

29,312

Komarovskoye Mining Company LLC

Komar

Kazakhstan

n/a

3,811

9,845

-

-

1,169

14,825

Gold of Northern Urals CJSC

Voro

Russia

Svedlovskaya oblast’

27,298

10,016

-

-

497

37,811

Svetloye LLC

Svetloye

Russia

Khabarovskiy Kray

-

2,504

354

592

-

3,450

Magadan Silver JSC

Dukat

Russia

Magadanskaya oblast’

38,962

16,995

665

628

7,1762

64,426

Mayskoye Gold Mining Company LLC

Mayskoye

Russia

Chukotka Autonomous Okrug

13,975

17,288

-

-

-

31,263

Omolon Gold Mining Company LLC

Omolon

Russia

Magadanskaya oblast’

41,148

13,427

262

-

4,7942

59,631

Albazino Resources Ltd

Albazino

Russia

Khabarovskiy Kray

36,239

23,980

703

-

201

61,123

GRK Amikan LLC

Veduga

Russia

Krasnoyarskiy Kray

1,221

1,856

285

-

-

3,362

South-Verkhoyansk Mining Company JSC

Nezhda

Russia

Yakutia

-

-

319

-

-

319

Total

 

 

 

246,656

125,307

2,588

4,888

21,439

400,878


Notes:
(1) In accordance with a memorandum with East-Kazakhstan Oblast Administration (local Kazakhstan government) Polymetal participates in financing of certain social and infrastructure development project of the region. During the year ended 31 December 2020 Polymetal paid $4,576 thousand under this programme.
(2) Includes payments under Special Economic Zone Development Program of $4,492 thousand for Omolon Gold Mining Company LLC and $6,465 thousand for Magadan Silver JSC.


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Polymetal International plc (together with its subsidiaries — “Polymetal”, the “Company”, or the “Group”) is a top-10 global gold producer and top-5 global silver producer with assets in Russia and Kazakhstan. The Company combines strong growth with a robust dividend yield.
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, “FORWARD-LOOKING STATEMENTS”. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS “TARGETS”, “BELIEVES”, “EXPECTS”, “AIMS”, “INTENDS”, “WILL”, “MAY”, “ANTICIPATES”, “WOULD”, “COULD” OR “SHOULD” OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY’S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY’S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY’S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED.
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Investor Relations Contacts

Tel. +44.20.7887.1475

Evgeny Monakhov

Tel. +7.812.313.5964

Kirill Kuznetsov
ir@polymetalinternational.com

You are downloading Integrated Annual Report . Please note that some ESG data are available in Sustainability Performance Data 2021 (GRI and SASB) that outlines our key non‑financial performance information for financial year 2021.

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