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Mining firms pay up new royalties

15th May 2012
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Mining companies in the country have complied with the new royalty charge of four percent and paid up by the beginning of this month, Energy and Minerals Permanent Secretary, Eliakim Maswi has confirmed.

The PS told The Guardian that all the mining firms paid under the new revenue formula.

Previously mining companies were paying three percent, but due to the reforms in the industry, royalty was increased to four percent to enhance the sector’s contribution to the country’s economy.

“All the mining firms have agreed and paid the new royalty,” said Maswi.

Tanzania plans to increase the contribution of the mining sector to gross domestic product (GDP) to 10 percent by 2025 from 3.8 percent in 2010. Addressing Shinyanga residents over the weekend after being sworn in as the Minerals Deputy Minister, Steven Masele said the aim of the government is to ensure that every citizen benefits from the country’s natural resources.

“These are God given resources…everyone has to enjoy them,” he said.

He promised to support artisanal miners in the country to boost their production. He said the miners will be given priority and their working environment improved.

Masele assured the miners of being provided with training, promising to support them in accessing mining licenses.

He told the rally that the government will make sure all mining companies support surrounding communities as part of their corporate social responsibility through provision of different social services including construction of dispensaries, water wells and schools among others.
He said that it was unfair for people living near mines to miss important services which can be provided by the companies.

“We don’t want to see people near the mines ignored,” he stressed, adding: “One of my priorities is to ensure that investors pay royalty before being allowed to export minerals. We want the nation to benefit from its resources.”

In January this year,  it was reported that Tanzanians had not started benefiting from the new mining law which raised royalty paid on precious minerals including gold from three to four per cent because mining companies haven’t migrated to the new tax regime.

Only the largest producer of gold in the country, African Barrick Gold, was said to have agreed to start paying the new royalty.

Former minister for energy and minerals, William Ngeleja was quoted as saying the government was negotiating with the mining companies to have them start paying royalty under the new mining law.

“However, there are issues that need to be sorted out because the existing Mineral Development Agreements, signed between the government and the mining firms are still legally binding,” he was quoted as saying, adding: “In such a situation there are no short cuts but to negotiate. The other issue is that the firms are still owed millions in VAT refunds.”

Other companies the government was negotiating with are AngloGold Ashanti (Geita Gold Mine) and Resolute Tanzania Limited (Golden Pride Mine).

African Barrick Gold runs four mines in Tanzania that include Bulyanhulu Gold Mine, Tulawaka Gold Mine, Buzwagi and the problematic North Mara.

SOURCE: THE GUARDIAN
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