December 10, 2019 / 12:25 PM / 7 months ago

Madagascar to raise minerals taxes, take 20% stake in mining projects

ANTANANARIVO (Reuters) - Madagascar plans to increase its royalties on nickel, cobalt, precious metals, and gemstones to 4% from 2% at present, a draft mining law showed on Tuesday, the latest African country to push for greater government revenue from mining activities.

The bill, seen by Reuters and then confirmed by Mines Minister Fidiniavo Ravokatra in a statement to reporters, also proposes a government stake of at least 20% in any marketable mining production.

Mining royalties would rise to 8% from 2% for raw precious stones. Rough industrial stones would fetch a 6% royalty rate while cut industrial stones would be taxed at 3%.

“It is fair that royalties and rebates are increasing,” Minister Ravokatra said. “This is still a bill but discussions with mining operators and exporters are continuing.”

Madagascar has compared its royalty rates with other countries and categorized different minerals, the minister said.

Democratic Republic of Congo introduced a new mining code last year increasing the royalty rate for precious metals from 2.5% to 3.5%, causing an outcry from miners operating there.

Reporting by Lovasoa Rabary; Writing by George Obulutsa; Editing by Helen Reid and David Evans

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