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Mali’s new mining rules end tax exemptions

The regulatory change seeks to bring a “substantial increase” in the contribution of the mining sector

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New Mali mining law removes tax exemption

Mining companies operating in Mali will no longer be exempt from value-added tax during production and will only be protected from fiscal changes for a shorter period.

The regulatory change seeks to redress the “shortcomings” of a 2012 law by bringing a “substantial increase” in the contribution of the mining sector to the economy, the Mines Ministry said in a statement.

However, some industry watchers view the code change as a new instance of so-called “resource nationalism” and will likely spark tensions between the Malian government and mining companies.

Mali is currently Africa’s third-largest gold producer.

The regulation shortens the “stability period” during which mining companies’ existing investments are protected from changes to fiscal and customs regimes.

Changes to regulatory stability clauses have been strongly opposed by international mining companies elsewhere in Africa, most notably in the Democratic Republic of Congo where miners spent months at loggerheads with the government.

Under Mali’s previous law, stability was ensured for 30 years. It was however not made clear what the length of the new stability period would be, but the Economy Ministry said last year that the government aimed to reduce those protections to the lifespan of a mine.

“It’s the reality of the playing field at the moment, a lot of companies in Mali will have looked at what happened in DRC and Tanzania and they will have to be very cautious,” said Warren Beech, partner and head of mining at Eversheds Sutherland in Johannesburg.

Mali’s government had been negotiating with a working group of mining companies to draft a new code but said last year that it would move to implement a new law unilaterally if no compromise was reached.

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Uganda and Rwanda revisit trade talks

The meeting was aimed at boosting diplomatic relations between the two East African neighbours

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Uganda and Rwanda revisit trade talks

Officials from Uganda and Rwanda on Monday met in Kigali following a Memorandum of Understanding signed by the two countries in Angola in August.

The meeting was aimed at boosting diplomatic relations between the two East African neighbours.

The two sides were seen to be at loggerheads for some time earlier this year, culminating in the closure of their borders.

The August MoU included agreements on regional co-operation and security, setting the pace for the improvement of political and trade relations between Uganda and Rwanda.

The two leaders also agreed to “resume as soon as possible the cross-border activities between both countries, including the movement of persons and goods, for the development and improvement of the lives of their population”.

The Ugandan delegation is led by Foreign Affairs minister, Sam Kutesa while his counterpart in Rwanda spearheads the opposite delegation.

Angola and DR Congo played a key role in bringing the Ugandan and Rwandan sides to the negotiating table.

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Egypt resumes Nile Dam talks with Ethiopia, Sudan

Egyptian Foreign Minister, Sameh Shoukry has expressed unease in recent days over delays in negotiations

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Egypt resumes Nile Dam talks with Ethiopia, Sudan

Egypt says Ethiopia has “summarily rejected” its plan for key aspects of operating a giant dam. The country is building on the Nile, while dismissing Ethiopia’s own proposal as “unfair and inequitable”.

The comments, made in a note circulated to diplomats last week, show the gap between the two countries on a project seen as an existential threat by Egypt, which gets around 90% of its freshwater from the Nile. 

The note distributed by the Egyptian foreign ministry, a copy of which was seen by reporters, points to key differences over the annual flow of water that should be guaranteed to Egypt and how to manage flows during droughts. 

It comes as Egypt, Ethiopia and Sudan met on Sunday and Monday for their first talks over the hydroelectric dam in more than a year. A spokesperson at Ethiopia’s foreign ministry, Nebiat Getachew, said on Monday the meeting had so far produced no agreements or disagreements, and gave no immediate response to the Egyptian claims. 

Egyptian officials were not immediately available for comment, but after the talks, an Egyptian water ministry statement carried by local media said the meeting had been limited to procedural, rather than substantive issues. 

Egyptian Foreign Minister, Sameh Shoukry has expressed unease in recent days over delays in negotiations. 

The $4 billion Grand Ethiopian Renaissance Dam (GERD) was announced in 2011 and is designed to be the centrepiece of Ethiopia’s bid to become Africa’s biggest power exporter, generating more than 6,000 megawatts. 

In January, Ethiopia’s water and energy minister said that following construction delays, the dam would start production by the end of 2020 and be fully operational by 2022.

The dam promises economic benefits for Ethiopia and Sudan, but Egypt fears it will restrict already stretched supplies from the Nile, which it uses for drinking water, agriculture and industry.

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Tanzanian mining firms to pay royalty fees on mineral production

The Tanzania Mining Commission set a deadline of September 15 to enforce the directive

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Tanzanian mining firms to pay royalty fees on mineral production

Mining companies in Tanzania risk being denied transport permits to ferry their products if they have not adhered to section 18 of the country’s Mining Act of 2010 (and revised in 2017), which requires all producers pay royalty fees on the gross value of minerals produced.

The Tanzania Mining Commission set a deadline of September 15 to enforce the directive.

The issue came up when Tancoal Energy Ltd. claimed that the law was punitive and would make its products expensive. However, the permanent secretary in the Ministry of Minerals, Simon Msanjila, says that the royalty fees have been in effect since 2010 and other companies producing coal and other minerals were already applying it.

“Tancoal have been avoiding paying the fees all these years, despite expanding their coal exports portfolio to include clients outside the country,” said Prof Msanjila. He further added that “it’s about time they start paying as well.”

The law requires every authorised miner in Tanzania to pay royalty fees based on the gross value of their produce. The gross value is the market value of the minerals at the point of refining or sale.

Violation of the directive results in up to two years imprisonment, maximum Tsh10 million fine in the case of an individual, or Tsh50 million fine for a corporate.

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