Maravi

(REUTERS) Namibia seeks mineral windfall tax: minister

COMMENT - So gaining government revenue from the mining industry is 'plainly bad business'. As I guess is collecting dividend payments on the shares that you own. And now Rupiah Banda is crying over road accident victims - killed on potholed roads. I guess they could have used the money after all. Let's get serious.

Namibia seeks mineral windfall tax: minister
Tue May 17, 2011 4:45pm GMT
REUTERS/Siphiwe Sibeko

By Servaas van den Bosch

WINDHOEK (Reuters) - Namibia is looking to introduce a minerals windfall tax to enable the state to benefit more from the country's vast mineral resources, Mines and Energy minister Isak Katali said on Tuesday.

The move is the latest by Namibia, home to some of the world's largest uranium reserves, to increase its share of the money made by mining companies. Investors were already worried by its recent decision to grant any future rights to strategic minerals, including uranium, to a state company.

"It is my view that as the custodian of the mineral resources, the state should also benefit in good times beyond normal taxes and royalties," Katali said in his opening speech at the annual general meeting of the Namibian Chamber of Mines.

"In bad times, it is the same government that the industry will look to for measures aimed at protecting and supporting the industry to weather the storm until good times are back again. I am talking about windfall taxes to enable government to achieve this objective."

He then asked the chamber to provide him with proposals for a tax system that would boost state revenue.

Mike Leech, the chamber's president and also the managing director of Rio Tinto's Rossing mine, said he was surprised by the minister's announcement.

"This was just thrown in by the minister, although it has been talked about in the past. We need to sit down and think about this," he told Reuters.

Namibia produces 10 percent of the world's uranium, but with new mines coming on stream, output is expected to quadruple within the next few years.

Two operating uranium miners in Namibia include the Rossing mine and Paladin Energy's Langer Heinrich mine.

Future potential producers include Areva's Trekkopje mine and Extract Resources' Rossing South project.

Earlier this year, a South African minister key in economic policy-making said that Africa's biggest economy was also thinking about overhauling its minerals tax regime to cash in on high commodity prices.

Zambia's President Rupiah Banda, on the contrary, ruled out windfall taxes for mining companies, which have been enjoying record copper prices, saying in March that changing the rules for foreign investors was plainly bad business.

Spot uranium on Tuesday stood at $56.50 per pound, down from a record around $136 in June 2007.

Labels: NAMIBIA, URANIUM, WINDFALL TAX

posted by MrK @ 10:55 PM