Madagascar Reviewing Mining Policy, Seeks Increase in Royalties

   By Devon Maylie 
 

CAPE TOWN--Madagascar's mining ministry is in the process of reviewing its mining policy and will seek to raise taxes paid by foreign companies, the country's mining minister said Tuesday.

Companies currently pay a 2% royalty but that could be raised to between 5% to 10%, Daniella Randriafeno told Dow Jones on the sidelines of the Mining Indaba conference in Cape Town.

"People feel they don't get [the] benefit from mining and that could lead to labor unrest," Ms. Randriafeno said.

"We need mining to spur growth. We want to make sure these resources aren't a curse for us...we know companies will be scared and may leave but [we] think they will come back."

The minister said a new law may not be passed before next year because it wouldn't go to parliament until after May elections.

Currently Rio Tinto PLC (RIO) and Sherritt International Corp. (SHERF), among other foreign companies, are developing projects in Madagascar.

Write to Devon Maylie at [e-mail]

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