Dar es Salaam. Gold mining companies will now pay four per cent of their profit to the government as service levy compared to the 3 per cent they were previously paying following an amendment of the Mining Development Agreements (MDAs) it signed with mining firms in 1999.
The amendment of MDAs signed with the Ministry of Energy and Minerals back in 1999 started yesterday with Geita Gold Mine which is to comply with the Mining Act amended in 2010.
Section 8 (4) gives the minister powers to prescribe a standard model form of a Mining Development Agreement for all projects exceeding $100 million.
The move is in response to widespread calls from the public for a change in the amount mining companies pay the government as service levy, according to the Minister for Energy and Minerals Prof Sospeter Muhongo.
and what was remaining was to document the agreements.
“Before the signing the companies were paying in protest because there was no written agreement showing them to do so but now it is now formalized” he said adding “We will soon sign the agreements with Barrick Gold and this will be after the finalization of our negotiations”
Professor Muhongo said the mining sector generally, the vision of the Government of Tanzania is to have a strong, vibrant, well-organized private sector led, large and small scale mining industry conducted in a safe and environmentally-sound manner which contributes over 10 per cent of gross domestic product.
The move is also an implementation of the mining Act of 2010 which requires gold mining companies to pay 4 per cent of their profit and increases the rates of royalties levied by the government on the gross value of minerals.
The Act indicates that (copper, gold, silver, and platinum) be levied at 4 percent.
It shows that other minerals, including building materials, salt, all minerals within the industrial minerals group 3percent (Section 87).
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