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.
In a bid to boost revenue from the country’s mining industry, President Ali Bongo has launched a new code that seeks to attract investors, Mining Minister Tony Ondo Mba told economic operators in the capital Libreville.
The new code is intended to improve conditions for companies and increase revenue for the state, Mba said.
Adopted by parliament in November, the code came into effect in July. It will reduce corporate tax by cutting fees on mineral exports and extend the time frame of operating licenses from 10 to 20 years, providing a stronger legal framework for mining titleholders and improving traceability and transparency, Mba said. The measure also aims to shift the use of revenue toward social development.
“The new mining code provides for a new fiscal model that allocates 20% of mining tax revenues to local populations for the implementation of community projects,” Valery Nzogue Angone, legal adviser to the finance ministry, said.
Gabon’s economy depends largely on world demand for manganese and oil. As the Central African nation seeks to make its economy less dependent on oil and boost the mining industry’s contribution to gross domestic product, the government is looking at attracting investors into mineral resources including manganese, gold and iron ore.
Crude sales produce about 30% of state revenue, however recent fluctuations in world market prices and slowing production in OPEC’s second-smallest member has affected income. A revised hydrocarbons code that came into effect last month is more fiscally attractive than the previous one, according to Noel Mboumba, Gabon’s petroleum minister.
The adoption of the new code has been delayed as President Ali Bongo, 60, has been spending months abroad recovering after suffering a stroke last year.
(By Eric Mbog Batassi and Katarina Hoije)
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