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Mozambique’s Tax Authority is monitoring the natural resources sector to ensure it collects the capital gains taxes due to it. This was affirmed by Tax Authority President Amelia Nakhare late last month. She was addressing a promotion ceremony for tax officials, at Boane, in Maputo province.
She cited two major transactions in particular. One is the sale by Vale Mozambique, local subsidiary of Brazilian miningmajor Vale, of stakes in the Moatize coal mine and Nacala Logistics Corridor to Japan’s Mitsui. Moatize is in Tete province, while the Nacala Logistics Corridor (CLN) links Moatize and Tete, through Malawi, by railway to the port of Nacala in Nampula province.
The second transaction involves Italian energy group Eni and US giant Exxon Mobil. Eni is negotiating the sale of a natural gas block in the Rovuma basin (in Cabo Delgado province) to the American group.
The Tax Authority expects to collect capital gains on both these transactions – but not only on these. Nakhare stated that there were many other possibilities for the collection of this tax. She pointed out that there was a team within the authority dedicated to identifying where capital gains taxes could be collected from other deals.
Nakhare’s comments were quite independent of, and indeed preceded, the announcement in Sydney, Australia, by global mining group Rio Tinto, that it was cooperating with the US Securities Exchange Commission’s investigation into the miner’s multibillion-dollar impairment on its then Mozambique coal business. The announcement was made in a statement to the Australian Securities Exchange.
“In response to press reports regarding a US Securities Exchange Commission (SEC) investigation, Rio Tinto confirms that it is cooperating with inquiries from the relevant authorities,” said the company in its statement. “As the SEC investigation, which started in April, 2013, remains ongoing, it would be inappropriate to comment further at this time.”
In 2011, the company bought junior miner Riversdale Mining for $4-billion, primarily to acquire the Benga coal project, in Mozambique. In 2012, Rio Tinto recorded an impairment of $2.9-billion on the Benga project and sold it in 2014 for just $50-million.
This statement follows the company’s announcement in October that it had reported itself to Australian, UK and US authorities over possible bribery regarding the Simandou iron-ore project in Guinea in 2011. The Simandou project was cancelled by the company in July, on the grounds that it was not economically viable, because of the lack of transport infrastructure to carry the iron-ore to the coast and the cost of creating such infrastructure.
Back in Mozambique, late last month, President Filipe Nyusi appointed Augusto de Sousa Fernando Deputy Mineral Resources and Energy Minister. Previously, he had been director of the Technical Unit for Project Implementation in the Ministry. He is an electrical engineer by training.
Separately, at the end of last month, Angolan National Assembly President (Speaker) Manuel Piedade stated that his country wanted to learn from Mozambique’s experiences in economic development, especially regarding mining and agriculture. He was addressing the local media in Maputo after a meeting with Nyusi. (source: Miningweekly; edited by Martin Zhuwakinyu, Creamer Media Senior Deputy Editor)