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Madagascar proposes higher minerals taxes, seeks 20% interest in mining projects

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Madagascar proposes higher minerals taxes, seeks 20% interest in mining projects

Madagascar is looking to double its royalties on nickel, cobalt, precious metals and gemstones to 4% from 2%, Reuters reported Dec. 10, citing a draft mining law that also proposes for the government to take an at least 20% interest in any marketable mining production.

The bill, confirmed by the country's Mines Minister Fidiniavo Ravokatra, includes a jump in mining royalties for raw precious stones to 8% from 2%, a 6% royalty over rough industrial stones, and a 3% royalty over cut industrial stones.

The law will also require holders of industrial-scale mining licenses to pay 2 billion Malagasy ariary, or about US$542,000 according to the newswire, while 200 million ariary would be payable by holders of research licenses.

Ravokatra called the increase "fair" and noted that discussions are ongoing with mining operators and exporters.

The newswire said it was not able to get a comment on the proposed increase from Ambatovy Minerals SA, which operates a nickel mine in Madagasar; Rio Tinto, which mines ilmenite through its unit QIT Madagascar Minerals SA; or the Toliara mineral sands project owner, Base Resources Ltd.

As of Dec. 10, US$1 was equivalent to 3,688.90 Malagasy ariary.