ABG9 Jun 2011 19:49
Tanzania Budget reassures African Barrick
Date: Thursday 09 Jun 2011
LONDON (ShareCast) - Shares in African Barrick Gold rallied after it repeated its assertion that the Tanzanian government has no plans to impose a “super-tax” on the country’s mining industry, pointing out that no such proposals were in the Budget the finance minister presented to parliament yesterday.
Shares in the company, whose gold mines are all in Tanzania, closed sharply lower yesterday, even after it moved to deny media reports that the government was preparing measures to take advantage of strong metals prices. They won back some, though not all, of those losses today.
“Contrary to media reports earlier in the day, no other measures were announced addressing the tax status of mining companies in Tanzania,” the company said.
“As previously communicated, the tax treatment of our existing operations is, and will continue to be, that set out in the respective Mineral Development Agreements.”
African Barrick said that parts of the Budget that affect it include a proposal for an escrow account to deal with indirect tax payments from the mining industry, ensuring that fuel excise duties are repaid on time and more measures to address the power shortage in Tanzania.
“(The )Budget speech is illustrative of the Tanzanian government's ongoing commitment to promoting a balanced investment environment for mining businesses operating here in Tanzania,” said African Barrick chief executive Greg Hawkins.
“We have put considerable effort into achieving a workable framework for dealing with the issue of fuel excise duty recovery and it is encouraging to see this articulated in the solution proposed today.”
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