HomeEast AfricaTanzania moving to boost mining revenue

Tanzania moving to boost mining revenue

The pit at Tulawaka
– one of Barrick
Gold’s Tanzanian
operations
 
Dar es Salaam, Tanzania — MININGREVIEW.COM — 24 March 2009 – The government of Tanzania – Africa’s third-largest gold producer – is considering the adoption of most of its mining panel’s recommendations aimed at boosting revenue from the country’s mineral wealth.

Energy and minerals minister William Ngeleja told reporters here that the panel’s recommendations were worth emulating and said: “We are going to take most of them.”

The 12-person review committee set up by Tanzanian President Jakaya Kikwete last year recommended higher royalty rates and fewer tax breaks for companies to help the east African nation boost its mining revenue.

The government is also considering proposals from previous reviews of the mining industry, as well as input from mining companies and civil society groups, Ngeleja added.

“Tanzania’s new mining policy is due to be working and operational by June ahead of the budget,” he said. The changes shouldn’t retroactively affect existing agreements with mining companies nor curb foreign investment in the growing industry,” he added.

“The intended objective we want to achieve is to ensure we have a win-win situation. It’s not to embarrass or to frustrate investors,” he continued. “We don’t want to lose investments we have now.”

The mining panel – chaired by Judge Mark Bomani – proposed that the government own 10% of all mining companies. The royalty on gold output should increase to 5% from 3%, on rough diamonds and gemstones to 7% from 5%, and on cut and polished stones to 3% from zero, according to the report.

It also recommends that tax relief on fuel imports for miners should be replaced with a levy, and the money should be spent on building roads.

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