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Tanzania asks Tancoal Energy to charge coal transport royalty

The Tanzanian mining commission ordered Tancoal Energy Ltd. to start asking the customers receiving coal from the company's Tancoal mine to pay royalties covering transportation costs, according to a Sept. 2 release.

The agency threatened to stop issuing coal transportation permits after Sept. 15 if the royalty is not implemented.

Tancoal was asked to charge a 3% royalty and a 1% clearance and inspection fee on the cost of transport from Tancoal mine to plants for both domestic and export customers.

The company noted that the price of its coal will increase by US$2.94 per tonne to largest domestic customers and US$8.23 per tonne to largest export customers.

Tancoal, owned 70% by Intra Energy Corp. Ltd. and 30% by the National Development Corp., is discussing the matter with the government and customers to find a solution.

In August 2018, Tanzania's ministry of minerals requested a royalty payment of US$1.1 million from Tancoal and threatened not to reissue permits for coal transportation if it did not comply.