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Tanzania Daily News (Dar es Salaam)
BY FINNIGAN WA SIMBEYE, 31 MAY 2012
Negotiations between the Ministry of Energy and Minerals and mining companies on reviewing royalty paid from minerals are at advanced stage with Tanzania Chamber of Minerals and Energy (TCME) expecting to give its position next week.
A Consultant from Africa Practice, a communications firm which handles TCME media affairs, Teweli Teweli, said the government chose to negotiate with individual companies as per their mining development agreements (MDAs) and not the whole industry through the Chamber.
"As the industry, the Chamber will have its official position by next Wednesday," Mr Teweli said. The former Barrick Gold Corporation Communications Manager, said African Barrick Gold which announced last week that it has agreed to raise royalty paid to the government by a per cent to 4 per cent, was based on lengthy negotiations.
"Other mining companies are also negotiating separately with the government as per their MDAs," Teweli said.
Last week, ABG which is the largest gold miner in the country with four mines at Bulyanhulu, Buzwagi, Kahama and Tulawaka also agreed to pay the royalty based on a new revenue formula.
The formula takes into account the gross sale value of gold sent abroad instead of its net value at point of export. The minerals ministry said in a statement that talks are proceeding with Anglogold Ashanti Ltd, which owns the Geita gold mine, and Resolute Tanzania Ltd, which owns the Golden Pride mine, to accept to pay new royalty rates.
The country started undertaking major reforms of the mining sector in 2010 following the release of Judge Mark Bomani Mining Sector Review Commission report which among other things, suggested the royalty be increased. The ministry said seven gold-producing mines in Tanzania had paid 341.57bn/- in royalties between 1998 and last year. It said large-scale gold mines in the country had invested some $2.92bn during the period.
"The mines posted total output from 1998 to 2010 of 12.56 million ounces of gold," said the minerals ministry, adding that the total gold produced during the period, and its by products of silver and copper, was worth 7.53bn USD. ABG alongside Anglogold Ashanti and Resolute Tanzania have also already started to paying corporate tax.
The government has also urged ABG to sell at least 10 per cent of its shares to local taxpayers through Dar es Salaam Stock Exchange (DSE) after the mining company cross-listed on the local bourse last December. Barrick Gold Corp, the world's biggest gold miner, owns around 74 per cent of the shares in ABG, with the remaining stake held by external investors.
Negotiations between the Ministry of Energy and Minerals and mining companies on reviewing royalty paid from minerals are at advanced stage with Tanzania Chamber of Minerals and Energy (TCME) expecting to give its position next week.
A Consultant from Africa Practice, a communications firm which handles TCME media affairs, Teweli Teweli, said the government chose to negotiate with individual companies as per their mining development agreements (MDAs) and not the whole industry through the Chamber.
"As the industry, the Chamber will have its official position by next Wednesday," Mr Teweli said. The former Barrick Gold Corporation Communications Manager, said African Barrick Gold which announced last week that it has agreed to raise royalty paid to the government by a per cent to 4 per cent, was based on lengthy negotiations.
"Other mining companies are also negotiating separately with the government as per their MDAs," Teweli said.
Last week, ABG which is the largest gold miner in the country with four mines at Bulyanhulu, Buzwagi, Kahama and Tulawaka also agreed to pay the royalty based on a new revenue formula.
The formula takes into account the gross sale value of gold sent abroad instead of its net value at point of export. The minerals ministry said in a statement that talks are proceeding with Anglogold Ashanti Ltd, which owns the Geita gold mine, and Resolute Tanzania Ltd, which owns the Golden Pride mine, to accept to pay new royalty rates.
The country started undertaking major reforms of the mining sector in 2010 following the release of Judge Mark Bomani Mining Sector Review Commission report which among other things, suggested the royalty be increased. The ministry said seven gold-producing mines in Tanzania had paid 341.57bn/- in royalties between 1998 and last year. It said large-scale gold mines in the country had invested some $2.92bn during the period.
"The mines posted total output from 1998 to 2010 of 12.56 million ounces of gold," said the minerals ministry, adding that the total gold produced during the period, and its by products of silver and copper, was worth 7.53bn USD. ABG alongside Anglogold Ashanti and Resolute Tanzania have also already started to paying corporate tax.
The government has also urged ABG to sell at least 10 per cent of its shares to local taxpayers through Dar es Salaam Stock Exchange (DSE) after the mining company cross-listed on the local bourse last December. Barrick Gold Corp, the world's biggest gold miner, owns around 74 per cent of the shares in ABG, with the remaining stake held by external investors.
