Energy and Minerals Minister Sospeter Muhongo
Tanzania is reviewing mining contracts to ensure the government gets a bigger share of revenues, its mining and energy minister said.
The Minister for Energy and Minerals, Prof Sospeter Muhongo told parliament that Africa’s fourth largest gold producer is talking to miners to get higher taxes and royalties for its 45 million people following growing public demand for more benefits from the country’s natural resources.
“The discussions are on changing some provisions of these contracts to generate more revenues for the state,” Muhongo said late on Thursday.
He said as part of the reviews, African Barrick Gold had agreed to start paying a service levy from July, equivalent to 0.3 percent of turnover, significantly higher than an annual payment of $200,000 agreed in the mining contracts.
The Tanzanian focused miner, a unit of the world’s largest gold miner Barrick Gold Corp, in 2012 also agreed to pay higher royalties following contract reviews.
Muhongo said the government had launched talks with other mining companies in Tanzania for similar contract reviews.
Other major mining companies operating in the country include AngloGold Ashanti, AI M-listed miner Petra Diamonds Ltd and Richland Resources Ltd.
The minister added the government would take new natural gas legislation to parliament in November as part of plans to put in place legal and regulatory frameworks to govern its fast-growing energy sector.
Analysts said delays in approving gas legislation could stifle future investments in East Africa’s No. 2 economy, which has made big gas discoveries offshore.
“By April 2014, some 46.7 trillion cubic feet of gas had been discovered in the country … of which 83 percent is in deep-sea offshore blocks and 17 percent onshore,” Muhongo said.
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