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Tanzania threatens to shut down mining firms over delayed talks

DAR ES SALAAM Tanzania (Xinhua) -- Tanzanian President John Magufuli has threatened to shut down foreign gold mining companies if proposed negotiations aimed at ending long-standing disputes continued to be delayed.

The disputes between the government and the mining firms center on royalties, which President Magufuli says Tanzania has been denied its due payments for a very long time.

Recently, the government and Barrick Gold, the largest shareholder of Acacia Mining, agreed to hold talks seeking to end the long standing dispute over royalties Acacia allegedly owes on gold exports but the talks have not been held to date.

Magufuli had in mid June this year during his meeting with Barrick Gold executive chairman, John Thornton in Dar es Salaam agreed to initiate formal talks to resolve the dispute between the government and Acacia mining.

This follows after two presidential committees revealed that Tanzania had lost over 45 billion U.S. dollars in royalties since the company started to operate in the country in the 1990’s.

Addressing a public rally at Kakonko in Kigoma region soon after he had laid the foundation stone for the construction of a 50-kilometer road from Nyakanazi to Kibondo, Magufuli said Tanzania has been losing billions of dollars in exports of copper concentrates which mining companies were taking abroad for smelting.

"The current war against economic crime is aimed at benefiting poor citizens who have had their minerals stolen by few wealthy people in the name of investors," he said.

Magufuli added:

"It is therefore unfair for the mining firms continue to benefit while our people have no medicines, electricity and struggle to get clean and safe water."

Magufuli asserted that the gold mining firms should consider the imminent talks as a priority or else he will not hesitate shutting down the mines.

The president said the government may resolve to give the mines to local investors so long as they paid appropriate taxes.

"This country wasn’t supposed to be poor; it has been endowed with minerals which were stolen through export of copper concentrates," said Magufuli, appealing to Tanzanians to support him in his fight against economic crime, which he said was the toughest undertaking ever.

He said that if the country was getting its appropriate royalties since the mining companies started their operations, Tanzanians would have better social services, with improved infrastructure across the country.

In June this year, Magufuli met with John Thornton, Chairman of Barrick Gold Canada, parent company of Acacia Mining, to discuss the mineral sand saga after Magufuli received two reports on the exports of copper concentrates.

Magufuli said the meeting was successful and Barrick had "repented" for what had happened and they were now ready to compensate Tanzania for the loss that the country had incurred over the years.

In March this year, Magufuli formed two committees which probed the technical aspects of the gold concentrates and the economic and legal frameworks around the exports.

Early this month, the National Assembly approved laws aimed at forcing mining companies to renegotiate their contracts.

Magufuli has already assented the laws.

Acacia Mining said recently that it was seeking an adjudicator to resolve its dispute with the government.

Acacia, Tanzania’s largest miner, said in a statement that notices of arbitration were served on behalf of companies that own its Bulyanhulu and Buzwagi mines, hit by an export ban.

And the South African-based Anglogold Ashanti, owners of the Geita Gold Mine (GGM) in the Lake Zone, also announced intention filing for international arbitration over legislative changes in Tanzania which entitle the government to re-negotiate all existing mineral development agreements.

Among the changes passed by parliament and swiftly signed into law by President Magufuli on July 5 is a provision for the government to take ownership of a minimum 16 per cent stake in all operative mining companies at no cost, with the right to buy shares equal to half the business.

A host of mining companies operating in Tanzania requested share trading suspensions on July 3 following the emergence of the terms of legislation.

             

 

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