UPDATE 2-Argentina says scraps some mining export tax breaks

(Adds details, Xstrata comment)

By Helen Popper

BUENOS AIRES Dec 5 (Reuters) - Argentine authorities said on Wednesday they had scrapped tax exemptions for mining companies, meaning some now face export duties of 5 percent or 10 percent.

It was not immediately clear which projects would be subject to the higher taxes, but the Argentine mining chamber (CAEM) said four companies had already been asked for the new payment on Tuesday.

"The Mining Secretariat has rolled back the authorizations that some mining companies and projects had benefited from," customs director Ricardo Echegaray said in a statement. "The tax exemption is no longer in effect."

No one at the Mining Secretariat or customs could immediately be reached to give further details.

Major mines in Argentina include the primary copper mine Alumbrera that is 50-percent owned by Swiss-based Xstrata Plc (XTA.L), Barrick Gold Corp's (ABX.TO) Veladero, and the Cerro Vanguardia gold mine, run by AngloGold Ashanti (ANGJ.J).

In a statement on Tuesday, the mining chamber said four firms had been asked to make the extra payment, including Minera Alumbrera Ltd.

However, Xstrata spokeswoman Emily Russell said: "No requests have been made to Alumbrera."

"We've been protected in the past by a tax stability agreement and the Argentine government has so far been very good at maintaining that agreement and we hope it will continue to do so," she added.

In Tuesday's statement, the mining chamber said the export duty charge ran counter to the country's mining legislation, something denied by the customs director Echegaray.

Argentina's mining industry has taken off in recent years, largely due to high global metals prices. Lower costs following the peso's sharp devaluation in 2002 and an attractive tax regime introduced in the 1990s have also attracted investors.

Mining investment has soared to about $2.9 billion this year from $220 million in 2003, according to the Mining Secretariat.

Under current mining legislation, capital goods imports for mining projects are tax exempt and value-added tax payments made during exploration can be claimed back. Royalties paid to provincial authorities are capped at 3 percent.

In recent weeks, speculation has grown that the center-left government of outgoing President Nestor Kirchner would announce a change to mining export tax rules.

Last month, Kirchner's government increased export duties on gasoline and petroleum products, as well as grains and oilseeds as part of its efforts to tame rising prices for such goods in the local market and boost state coffers.

Those export tax hikes are aimed at bolstering state income as President-elect Cristina Fernandez de Kirchner, Kirchner's wife, prepares to take office on Dec. 10. She has pledged to preserve the fiscal surplus. (With additional reporting by Cesar Illiano; Editing by Marguerita Choy)