Dar set to recover $2.9m debt from TanzaniteOne

Miners inside the Buzwagi gold mine in Shinyanga. Picture: File 

By ADAM IHUCHA Special Correspondent

In Summary

• The debt comprises unpaid royalties, other taxes and social security remittances between 2004 and 2010.

The Tanzanian government may soon recover at least Tsh4.5 billion ($2.9 million) in tax arrears from TanzaniteOne Mining Ltd.

The debt comprises unpaid royalties, other taxes and social security remittances between 2004 and 2010.

Late 2013, Richland Resources, the parent company, announced a placing and open offer to raise funds for capital expenditure and settle all royalty payments.

“In total, the company has raised approximately £2.76 million ($4.5 million) gross via the issuance of 81,060,944 new common shares,” Richland Resources said.

In a circular to shareholders, TanzaniteOne noted that it would settle all known claims for royalty payments for the period between 2004 and 2010 as set out in the group’s consolidated accounts to June 30, 2013.

“The directors plan to use the minimum net proceeds as $0.3 million capital expenditure at TanzaniteOne mine, $2.9 million as contingency for royalties and other Tanzanian taxes as well social security payments and $0.5 million as general group working capital requirements,” reads the circular seen by The EastAfrican.

In mid 2012, the state suspended the renewal of TanzaniteOne’s licence to mine the blue gemstone in Mererani Hills in the north of the country in an effort to recover the debt.

READ: Dar stops Tanzanite exports over debt

TanzaniteOne chairman Ami Mpungwe blamed “technicalities” between his firm and the Tanzania Mineral Audit Agency (TMAA) for the delay in tax compliance.

The company has been making losses, which it blames on illegal miners who allegedly occupy its licence area in Mererani Hills.

In the year ending December 2012, net losses stood at Tsh22 billion ($13.6 million). During the six-month period to June 30, 2013, TanzaniteOne reported revenue of $7.5 million before interest, taxes and depreciation, plus a net loss after tax of $0.56 million.

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