Trona industry tax cut passed

On 27 September 2006, the US Senate passed a bill to cut federal royalty paid by Wyoming trona companies from 6% to 2% for the next five years.
According to officials, the legislation will help to ke…

On 27 September 2006, the US Senate passed a bill to cut federal royalty paid by Wyoming trona companies from 6% to 2% for the next five years. According to officials, the legislation will help to keep Wyoming“s soda ash industry competitive in the world market. There are four companies operating in south-west Wyoming that have been cutting jobs in recent years in the face of intense international competition. According to industry officials, the royalty reduction of 4% will save the industry about USD 5 million annually, also enabling companies to invest in new equipment to help increase production and improve job stability. The Senate bill was sponsored by Sen. Craig Thomas, R-Wyo, who said, on 29 September 2006, “This legislation fortifies the Wyoming soda ash industry“s position against global competitors in Asia. “Maintaining a strong soda ash industry is critical to the economy in south-west Wyoming,” he added. The bill was praised by Sen. Mike Enzi and Rep. Barbara Cubin, both of Wyoming, also sponsored by Cubin in the House. Enzi called the bill“s passage a tremendous victory and an “equalizer” that will ensure fair trade exists in the global soda ash market. Wyoming“s four soda ash producers have lost approximately 700 jobs since 1997. This situations, say industry officials, is caused by competition from Asian producers, including China, which has increased as these countries have increased production with the help of government subsidies and lax environmental rules. Tim Morrison, site manager for OCI Chemical Inc., located about 20 miles west of Green River, said that the royalty break was great news for Wyoming producers. “This will help us continue to invest, and that“s great,” he said. “We really appreciate the help of the delegation and their work on this.” Morrison added that the industry needs to continue to invest in new equipment to become more efficient. “What you worry about if you“re not ultra-competitive, you“ll end up losing ground against overseas competitors”, he said. “And that“s really what this is trying to do … give us an equal playing field with the Chinese, primarily.” Wyoming receives half of the royalties collected on soda ash production in the state, and this royalty reduction will cost both the federal and state governments revenue. Federal mineral royalties are used mainly for education and highway funding. As per industry figures, the four Green River companies paid about USD 100 million in 2005 in federal, state and local taxes and fees. About 16 million tons of trona, which is refined into soda ash, is mined by Wyoming producers annually. The four Green River companies account for about 33% of the world“s soda ash production, which employs about 2,300 people.