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African barrick goldmine to raise royalty on tanzania gold

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by KiuyaJibu, Dec 15, 2011.

  1. KiuyaJibu

    KiuyaJibu JF-Expert Member

    Dec 15, 2011
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    ABG to raise royalty on Tanzanian gold - Ministry25 times viewed. Thursday, 15 Dec 2011Reuters reported that African Barrick Gold Plc has agreed with the Tanzanian government to raise the royalty rate it pays on gold exports.

    ABG, which has four mines in Africa's fourth largest gold producing country agreed to an increase in royalties to 4% from 3% and 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 announced the deal in newspaper advertisements which also said talks were proceeding with Anglogold Ashanti Limited which owns the Geita gold mine and Resolute Tanzania Limited which owns the Golden Pride mine, with a view to those two companies also paying the new royalty rate.

    A mining official familiar with the talks however said that the government statement was premature and that several details of the deal were yet to be agreed. Tanzania had begun major reforms of its mining sector following growing criticism over the industry's relatively minor contribution to economic growth. It forecasts the contribution of the mining sector to gross domestic product will grow to 10% by 2025 from 3.8% last year.

    The ministry said that 7 gold producing mines in Tanzania had paid 341.57 billion Tanzanian shillings in royalties between 1998 and last year. It said large scale gold mines in the country had invested some USD 2.92 billion during the period.

    The minerals ministry said that the mines posted total output from 1998 to 2010 of 12.56 million ounces of gold. The total gold produced during the period and its byproducts of silver and copper was worth USD 7.53 billion.

    The ministry said that ABG's Tulawaka gold mine was expected to pay USD 32 million corporate tax calculated from 2008 after successful negotiations on the payment of new taxes based on the country's 2010 mining legislation. Two other gold mines owned by Anglogold Ashanti and Resolute Tanzania had already started to pay corporate tax.

    The Tanzanian government has urged ABG to sell at least 10% of its shares on the Dar es Salaam Stock Exchange after the mining company cross listed on the local bourse on December 7th 2011.

    (Sourced from Reuters)

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