AngloGold to study new Tanzanian mining laws

JOHANNESBURG (miningweekly.com) – AngloGold Ashanti on Wednesday said it would, in the context of its existing mine development agreement with the government of Tanzania, analyse new laws that may impact on its operations and take steps from there.

The company operates the Geita mine, which produced 489 000 oz of gold in 2016, in Tanzania.

The Tanzanian Parliament on Monday enacted the Natural Wealth and Resources Bill 2017 and the Natural Wealth and Resources Contracts Bill 2017, allowing the government to force mining companies to renegotiate contracts.

The Bills cover natural resource contracts and sovereignty and would amend existing laws to allow the government to renegotiate or dissolve contracts with multinational companies.

The country also amended mining and tax laws, which will make it mandatory for the State to own at least 16% of mining projects, while also raising export royalties.

The new law also raises royalties for gold, copper, silver and platinum exports to 6% from 4%, while increasing the royalty on uranium exports from 5% to 6%.

Further, the law allows government to reject a company's valuation if it believed the price was too low, with government entitled to buy the consignment of minerals at the price quoted.

The Bills, which were first tabled for comment on June 29, would now be sent to President John Magafuli for his assent. Once assented to, the country’s Ministry of Energy and Minerals will gazette the date on which the new laws will take effect.

In the aftermath of the tabling, a slew of Australian mining companies operating in the country have suspended share trading on the ASX, including Volt Resources, Strandline Resources, Magnis Resources, Graphex Mining, Black Rock Mining and OreCorp.

Meanwhile, Acacia Mining, which has been in a tax dispute with the country’s government since the start of the year, on Tuesday said notices of arbitration have been served in Tanzania on behalf of Bulyanhulu Gold Mine Limited (BGML) and Pangea Minerals Limited (PML), which hold its Bulyanhulu and Buzwagi mines.

Acacia said the notices referred the current disputes between Tanzania’s government and each of BGML and PML to arbitration, which is in accordance with the dispute resolution processes agreed to by local government.

The Tanzanian government accused the gold miner of failing to pay billions of dollars in taxes. This follows after two Presidential committees determined that the company underdeclared its mineral exports.

Acacia, however, believes the committees overstated the value of concentrates it had exported.