The Mining Fiscal Regime Simulator is an open-source financial modelling tool designed to assist governments and stakeholders in assessing the economic impacts of various mining tax policies. Developed to promote fair and transparent financial benefits, the tool allows users to simulate the outcomes of different fiscal regimes on mining projects, helping to evaluate how changes in taxes and royalties affect government revenue and project viability.

Organisation behind the tool

The tool is maintained by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), in collaboration with the Applied Resource Policy Lab. The IGF works with over 75 governments to strengthen legal and policy frameworks for mining governance.

What the tool does

The simulator provides a platform for users to model the lifecycle of mining projects under various fiscal scenarios. Key functions include:

• Simulating the impact of different tax types, such as corporate income tax, royalties, and additional profit taxes.
• Analysing how fiscal changes influence the Net Present Value (NPV) and Internal Rate of Return (IRR) for mining operations.
• Generating comparative data to assist in the design of transparent financial frameworks.
• Providing downloadable data and models for further independent analysis.

Target audience

The primary users include government officials, policymakers, and mining authorities in resource-rich countries. It is also a resource for researchers, civil society organisations, and finance professionals involved in the extractives sector.

Relevance to finance professionals

Finance professionals can apply the simulator to various aspects of mining investment and risk analysis:

• Risk assessment – evaluating how potential changes in local tax laws may impact the financial stability and profitability of mining assets.
• Investment context – conducting sensitivity analysis on project cash flows relative to evolving fiscal regimes in different jurisdictions.
• ESG analysis – assessing the ‘S’ in ESG by examining the fair distribution of financial benefits between private operators and host governments.
• Market/commodity insights – understanding the economic thresholds of mining projects for specific minerals like copper, cobalt, and nickel.