Magufuli says will close all mines if firms delay talks to resolve tax dispute
Saturday July 22 2017
Tanzanian President John Magufuli has said he will close all the mines if mining companies delay negotiations to resolve a dispute over billions of dollars in back taxes which the government say they owe.
President Magufuli on Friday said it would be better to give those mines to Tanzanians to extract, sell the minerals themselves and pay the taxes, rather than giving to "people who call themselves investors with the intention of stealing from Tanzanians.”
“After we discovered that trillions of shillings were stolen, we called them for negotiations and they agreed, but if they will continue delaying, I will close all mines and give them to Tanzanians,” he said.
READ: Acacia agrees to pay higher royalties to Tanzania
However, he admitted that the "economic war" that he had started was not easy.
“God will protect me and Tanzanians will keep praying for me because I am doing this for all Tanzanians.
"I know what I am saying. It’s trillions of shillings which have been stolen,” he said.
READ: Tanzania seeks to reform mining sector for citizens' benefit
ALSO READ: Magufuli fight for mineral revenue splits Parliament
Shockwaves
President Magufuli has sent shock-waves through the mining community in Africa's fourth-largest gold producer since his election late in 2015 with actions he says are aimed at ensuring that mining companies pay a fair share of taxes.
Tanzania has passed new laws to increase mining taxes, to force companies to re-negotiate their contracts and to allow the state to own up to 50 percent of shares in mining companies.
READ: Mining firms react to Tanzania’s new laws
In March, it introduced a ban on exports of copper concentrate or mineral sand for processing abroad, which hit Acacia Mining, the biggest gold miner in the country.
Since the ban, London-listed Acacia, majority owned by Barrick Gold, has nearly halved in value. The company suspended its dividend for the first time in February.
Acacia Mining said on Friday it aimed to reinstate its dividend in early 2018 if Tanzania ended the concentrate export ban. Acacia's shares were down more than 17 per cent on Friday.
Acacia has been having trouble renewing work permits for its international staff in Tanzania, Chief Executive Brad Gordon told Reuters.
""We were having difficulty getting work permits renewed. But no foreign nationals have been asked to leave the country," Gordon said.
The government has also accused Acacia of evading taxes worth billions of dollars by under-declaring export volume and value of its minerals.
Acacia denies the allegations. The company said on July 4 it was seeking international arbitration to resolve the dispute.
READ: Acacia seeks arbitration after Tanzania tears up mining contracts