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AngloGold Ashanti now injects $66m into its Tanzania mining operations

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by nngu007, Nov 13, 2011.

  1. nngu007

    nngu007 JF-Expert Member

    Nov 13, 2011
    Joined: Aug 2, 2010
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    Funds will be used to boost gold mine production. Picture: J. Akena By ROSEMARY MIRONDO

    Posted Sunday, November 13 2011 at 10:58

    AngloGold Ashanti, a leading global gold producer, is investing $66 million as it seeks to boost its mining operations in Tanzania.
    The injection of capital will enable the firm to produce between 485,000 ounces and 506,000 ounces of gold this year.

    “The company has been investing heavily in Tanzania since 1999, resulting in the transformation of Geita Gold Mine from a loss making enterprise into a modern and efficient operation over the past two years, which is the basis for the announced corporate tax assessments,” said Gary Davis, GGM managing director.

    Mr Davis said that profits or losses in the sector are influenced by numerous factors and can vary significantly on an annual basis.

    Even though the mining industry has faced heavy criticism that it is not contributing to the country’s economy, Mr Davis says AngloGold Ashanti “is a major contributor to Tanzania’s economy and is subject to normal corporate tax, which is assessed when total net revenues exceed total spending for a given tax year.”

    Recently, the company’s CEO, Mark Cutifani, informed President Jakaya Kikwete that GGM would this year pay corporate tax amounting to $50 million.

    He spoke to the president at Burswood in Perth, Australia on the sidelines of the Commonwealth Heads of State and Government meeting. He said the company had already made an advance payment of $4.8 million.

    “Geita Gold Mine, a subsidiary of AngloGold Ashanti, will pay the remainder of the tax before the end of the year,” said Mr Cutifani.

    According to Mr Davis, regular domestic revenue contributions from Geita Gold Mine include taxes, royalties, excise duty, VAT, and levies totalling more than $350 million to date.

    Annual tax payments for a large and complex business like Geita Gold Mine vary considerably depending on operating conditions, productivity, costs and a range of other factors.

    “One of the most successful ways we have found to maximise community benefits and support development of a vibrant Tanzanian economy is through local procurement,” said Mr Davis.

    He said that they have procured $395 million from Tanzanian manufacturers, suppliers and service providers and are constantly looking for high quality local solutions to meet their procurement needs.