African Barrick Gold plc
Update on 2011/12 Tanzanian Budget
The Tanzanian Minister for Finance presented the 2011/12 Budget to Parliament
yesterday in Dodoma. Amongst the range of initiatives and measures put
forward, there were several of relevance to our business in Tanzania. Chief
amongst these were:
- The proposal of a special escrow account to deal with indirect tax
payments from the mining industry in order to facilitate the timely repayment
of fuel excise duties. We have been working with the government and the
Tanzania Revenue Authority to find a solution to this administrative issue and
the new process should improve our working capital management going forward.
- Further measures to address the power shortage in Tanzania through
supporting investment in an additional 160MW of generating capacity, as well
as a commitment to help secure financing for the state utility TANESCO for the
longer term development of the national network.
- Contrary to media reports earlier in the day, no other measures were
announced addressing the tax status of mining companies in Tanzania. As
previously communicated, the tax treatment of our existing operations is, and
will continue to be, that set out in the respective Mineral Development
Agreements.
Commenting on these developments, ABG CEO Greg Hawkins commented, "Today's
Budget speech is illustrative of the Tanzanian government's ongoing commitment
to promoting a balanced investment environment for mining businesses operating
here in Tanzania. We have put considerable effort into achieving a workable
framework for dealing with the issue of fuel excise duty recovery and it is
encouraging to see this articulated in the solution proposed today. This
builds on the increased level of governmental engagement we have seen
following the recent unfortunate events at North Mara as well as in dealing
with the replacement of the SAG mill motor at Buzwagi, which is now installed
and fully functional. Although the replacement took slightly longer than first
expected with a short-term production loss of around 15,000 ounces we remain
confident this will largely be recovered over the balance of the year. ABG
continues to focus on optimizing our current operations and further expanding
the business in Tanzania. We will be doing this in partnership with the
government for the benefit of all our stakeholders."
Update on 2011/12 Tanzanian Budget
The Tanzanian Minister for Finance presented the 2011/12 Budget to Parliament
yesterday in Dodoma. Amongst the range of initiatives and measures put
forward, there were several of relevance to our business in Tanzania. Chief
amongst these were:
- The proposal of a special escrow account to deal with indirect tax
payments from the mining industry in order to facilitate the timely repayment
of fuel excise duties. We have been working with the government and the
Tanzania Revenue Authority to find a solution to this administrative issue and
the new process should improve our working capital management going forward.
- Further measures to address the power shortage in Tanzania through
supporting investment in an additional 160MW of generating capacity, as well
as a commitment to help secure financing for the state utility TANESCO for the
longer term development of the national network.
- Contrary to media reports earlier in the day, no other measures were
announced addressing the tax status of mining companies in Tanzania. As
previously communicated, the tax treatment of our existing operations is, and
will continue to be, that set out in the respective Mineral Development
Agreements.
Commenting on these developments, ABG CEO Greg Hawkins commented, "Today's
Budget speech is illustrative of the Tanzanian government's ongoing commitment
to promoting a balanced investment environment for mining businesses operating
here in Tanzania. We have put considerable effort into achieving a workable
framework for dealing with the issue of fuel excise duty recovery and it is
encouraging to see this articulated in the solution proposed today. This
builds on the increased level of governmental engagement we have seen
following the recent unfortunate events at North Mara as well as in dealing
with the replacement of the SAG mill motor at Buzwagi, which is now installed
and fully functional. Although the replacement took slightly longer than first
expected with a short-term production loss of around 15,000 ounces we remain
confident this will largely be recovered over the balance of the year. ABG
continues to focus on optimizing our current operations and further expanding
the business in Tanzania. We will be doing this in partnership with the
government for the benefit of all our stakeholders."
