EDITOR'S NOTE: Don’t Miss a Beat! Kitco News is launching a weekly Newsletter highlighting our most popular features, articles and videos! Sign Up by clicking on the
Kitco Newsletter Box.

Geita Gold Mine Pays 2.2bn/ - Service Levy to Councils

EMBIN (Emerging Markets Business Information News)

The Minister of Energy and Minerals, Mr George Simbachawene.

THE government has received a record 2.2bn/- service levy from Geita Gold Mine (GGM) Limited , setting a new trend on its revenue collection.

The Minister for Energy and Minerals, Mr George Simbachawene, said the new levy was a 800 per cent increase from what was prescribed in a 1999 contract, which was not more than 200,000 US $ per year.

He said this was a huge positive change on the way the government worked with mining companies. He was speaking at a function to inaugurate the service levy and receive the same from GGM Limited that would be remitted to Geita Town Council and Geita District Council .

"This is a huge step forward and opens a new chapter in government revenue earnings and its capacity to fund development projects.

This has been arrived at after lengthy discussions between the government and GGM Limited ," noted the minister.

Mr Simbachawene said the talks led to the rectification of the mining contract in which, instead of the payment being on a flat rate, it was now calculated as 0.3 per cent of the mine's gross earnings. The US $ 200,000 cess was inclusive of all taxes that was liable to Geita District Council .

The minister noted that the amount was relevant at the time when the government was out to win foreign investors in the mining sector.

"Today GGM will hand over a 2.2bn/- cheque, meaning that Geita Town Council and Geita District Council earnings have gone up by 800 per cent," he said.

Mr Simbachawene said one of the most important aspects of the function was the good relations between the government and the private sector, specifically GGM, adding that the society would now benefit more from the mine.

He thanked AngloGold Ashanti for their understanding and passion for development, but warned the two Geita councils that given the huge earnings, the government and other stakeholders expected more development.

The minister said he expected to see better social services and infrastructure in place, such as education, roads, electricity, water and medical services.

"GGM has honoured its legal responsibility according to the contact, but the councils that receive the funds have to make sure the citizens benefit from this and poverty is substantially reduced," said the minister.

Payment of the new tax comes after long discussions in which councils and individuals were looking to get more from the mine.

Apart from taxes, GGM offers other services such as construction of schools, hospitals and water infrastructure.

(c) 2015 EMBIN (Emerging Markets Business Information News) Provided by SyndiGate Media Inc. (Syndigate.info).
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
kitco news

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y

Interactive Chart