Tanzania threatens to close gold mines
TANZANIA’S President John Magufuli has threatened to close down all gold mines in the country if mining companies delay talks with his government aimed at resolving allegations of tax evasion.
AngloGold Ashanti, which owns Tanzania’s biggest open-pit mine, Geita, also said last week that it was filing for international arbitration after the overhaul of the mining laws.
The announcement by Magufuli, nicknamed “the Bulldozer” for his forceful leadership style, marks a further escalation of a dispute with foreign companies like Acacia Mining over export revenues.
It follows news of the interrogation of Acacia executives, and expulsion of the company’s foreign workers.
“We have asked them to come for talks … they have agreed to come. But if they delay those talks, I will close down all the mines,” Magufuli told a cheering crowd at a public rally in the town of Kigoma.
Magufuli has sent shock waves through the mining community in Africa’s fourthlargest gold producer since his election late in 2015 with a series of actions he says are aimed at ensuring that mining companies pay a fair share of taxes.
The government has accused Acacia Mining, the country’s biggest gold miner, of evading taxes worth billions of dollars by underdeclaring 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.
The company’s decision to seek arbitration came a day after Tanzania passed new laws to increase mining taxes, force companies to re-negotiate their contracts and allow the state to own up to 50% of shares in mining companies.
Barrick Gold, which owns a 63.9% stake in Acacia, agreed last month to hold talks with the government to resolve the tax evasion claims. The talks are yet to begin but officials said they could start soon.
The president said he had taken on multinational companies for the sake of the country. “I have launched an economic war,” he told the crowd at the rally.
In an apparent escalation of the dispute with London-listed Acacia, Tanzania has asked the company’s foreign employees to leave the country, a source with knowledge of the matter said on Friday.
Two senior local staff of the mining firm, Tanzania’s largest foreign investor, were detained and interrogated at an airport last week, two sources said.
In March, the state banned exports of unprocessed gold and copper, a move Acacia later said has been costing it $1-million (R12.9-million) a day in lost revenue.
Acacia said on Friday that “employees in Tanzania have been and continue to be interviewed by government agencies”.
The company declined to comment furt One of the interrogated executives, Deo Mwanyika, listed on Acacia’s website as the company’s vice-president of corporate affairs, was at least initially monitored at his house by secret service agents and has been interrogated since his initial detention. Attempts to contact Mwanyika were unsuccessful.
Gerson Msigwa, the director for presidential communication in Tanzania, couldn’t immediately be reached for comment. Industry, Trade and Investment Minister Charles Mwijage, who tabled the energy ministry’s budget last month after the mines minister was fired, didn’t answer two calls to his cellphone seeking comment. — DDC, Bloomberg and Reuters