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Extractive Industry: Taxes on deals involving mining assets expected to net Mozambique US$3 billion

Mozambique may collect taxes of US$3 billion by the end of the year, or twice the amount of capital gains tax charged so far on the sale of mining resources, the president of Mozambique’s Tributary Authority (AT), Rosário Fernandes said Wednesday in Maputo.

The president of the AT said that by the end of the year he intended to conclude the process of charging seven international groups who sold either their entire or part of their stakes in coal and natural gas exploration projects in Mozambique.

Since 2012 Mozambique has netted around US$1.3 billion by charging capital gains tax on five deals made between foreign groups, including US company Anadarko Petroleum and Italy’s ENI, which are operators of the Area 1 and Area 4 blocks in the Rovuma Basin, respectively.

The president of the Mozambican Tributary Authority also said that the process of selling mining assets in Mozambique by Australia’s Riversdale Mining to Anglo-Australian group Rio Tinto remained open, as the due tax had yet to be paid.

The sale of assets, in 2011, provided Riversdale Mining with US$3.6 billion, and Fernandes said that, “the process has not been abandoned, and is now subject to a tax dispute of which we are awaiting the results.”

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