At a time when gold prices are at the most lucrative in recent times, and are on an upward projectile up to the year 2014, the government of Tanzania has indicated that it will attach a windfall levy on mining companies.
This comes after Morgan Stanley, the global investment and banking company, published a report showing that prices of gold in Q1-2013 will hit $1715, while reaching $1835 by Q4-2013.
The Minister for Energy & Minerals, Sospeter Muhongo has, thereby, advised that the state will impose windfall levy on the private industry involved in the mining of the precious metal.
Gold Mining Tanzania: The larger Picture
Tanzania is one of Africa’s hubs for the yellow metal in a trio that consists of leaders South Africa and Ghana.
The country has reserves that, courtesy of marginal figures, are around 1000 tones. There has been a great increase in the extraction capacity, with the 2002 margins totaling 43.2 tons before picking up to 48 tons a year later, a trend that has remained to date.
2003 was the year that the country exported gold ounces worth $504m, which marked a rise from previous levels by 20 percentage points. At a proportionate 62 percent, the sales provided almost three-quarters of the net export returns, a margin higher by 13% of the preceding year’s sales’ proportion of gross exports.
There have been many mining companies that have come to Tanzania, both local and foreign, to tap new finds. The Pangea Mineral Limited controls the Tulawaka Mine that launched production activities in the mid-2000s.
There has been one new mine per year beginning 1998, through the initiative of prospecting and production companies, the biggest of which being Resolute, Ashanti, AngloGold and Barrick Gold Corporation.
One of the largest mining facilities in Tanzania is Geita Mine, a consortium of AngloGold Ashanti, which is one of the most prestigious mining firms in South Africa and holds its own in the world. The firm has a 50 percent stake at the mine.
With the exponential growth cycle in the market segment of the gold mining sector, projections indicate that the global industry will double its fortunes in the 2012 to 2016 period, with figures already establishing that the production level rose to a 1.55-million production capacity in 2012.