Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The gold-rich African nation of Tanzania has introduced a 30% corporate tax for mining companies in operation for more than five years, stating that the move is justified by rising precious metal prices on the international market.
According to a Reuters report energy and minerals minister Sospeter Muhongo informed parliament on Friday that Tanzania’s gold export earnings surged 31% last year to $1.879 billion from $1.436 billion the year before on rising international prices.
Muhongo also stated that the government had ordered audits of all large-scale gold mines in the country to ensure their payment of corporate taxes.
The tone of the government on the issue appears very firm, with Muhongo ordering mining companies in operation for more than five years to start paying their corporate taxes ‘without any excuses.’
‘If they claim they are still making losses and can’t contribute to the national economy through taxes, they should shut down their mines and leave because minerals do not rot,’ said the minister.
Tanzania is Africa’s fourth biggest gold producer, and major gold mining companies currently operating in the country include Africa Barrick Gold Plc, with four mines; AngloGold Ashanti Ltd. and Resolute Mining Ltd.
