New mining sector laws just around the corner, says Kikwete THISDAY REPORTER Dar es Salaam THE government will next month table a parliamentary bill for amendment of the countrys mining legislation in line with recommendations of the report of the presidential mining sector review committee chaired by retired Judge Mark Bomani. According to a statement issued by State House, President Jakaya Kikwete notified the new CEO of Barrick Gold Corp, Aaron Regent, about the impending amendments during talks in Dar es Salaam this week. The mining sector review report, which was released in May last year, recommended, amongst other things, that the current royalty rates on gold and diamonds need to be hiked, and limited tax exemptions and incentives should be granted to new investors in the sector. The Bomani committee established that Tanzanias royalty rates on the value of gold and diamond exports from the country were half of those in Ghana and Botswana, for example. The committees report also advised the government to make a number of fiscal reforms to ensure that the country gets a fairer share of earnings from sales of its minerals. A bill to amend the (1998) Mining Act is in its final stages, and will be tabled in parliament soon, the State House statement quoted President Kikwete as saying. The Bomani committee also proposed that mining royalties on metals should be increased to 5 per cent from the existing 3 per cent, while tax relief on fuel imports for gold mines should be abolished. Royalties on rough diamonds and gemstones, such as tanzanite, should be increased to 7 per cent from 5 per cent, and royalties on cut and polished stones should similarly be hiked to 3 per cent from zero. The report further advised that future royalties should be calculated on gross value, and not net back value as is the case at present. Fuel tax should also be levied on mining companies, with the money earned to be used to build roads, said the report. The 12-member mining sector review committee, which began its work in November 2007, also proposed the establishment of a minerals authority charged with the responsibility of supervizing all mining activities in the country. It is envisaged that this new body will replace the current mining advisory committee.
According to the State House statement, Barrick Gold CEO Regent in turn briefed the president on the current security situation at the North Mara gold mine, which was recently invaded by hundreds of local villagers in the area causing damage worth millions of US dollars. The North Mara mine is one of at least four major Barrick Gold projects in Tanzania.