PRESS STATEMENT

11 June 2014
MINING COMPANIES ARE NOT TAX CHEATS
Recently, report !n t"e #e$!% co&ere$ tor!e 'ro# Glo(%l )!n%nce Inte*r!ty +G)I, report
!#pl!c%t!n* #!n!n* co#p%n!e !n '!n%nc!%l #%lpr%ct!ce-
.e /!" to co##un!c%te to t"e *ener%l pu(l!c t"%t t"e %lle*%t!on $!recte$ %t t"e #!n!n* !n$utry
"%&e no !ot% o' trut"- 0%!c%lly t"e G)I report, /"!c" /% rele%e$ !n M%y 2014, e1pl%!n !ll!c!t
'!n%nc!%l 'lo/ purporte$ly t%*e$ (y corpor%te (u!nee !n *ener%l, (ut t"e #e$!% c"oe to
%l!*n !t /!t" t"e #!n!n* !n$utry %lone- T"e C!t!2en ne/p%per 'or !nt%nce re&e%l t"%t t"e
*o&ern#ent #!e out on %(out 3244 #!ll!on per ye%r !n t%1 re&enue 'ro# #!n!n* co#p%n!e,
(ut t"e '!*ure !n t"e report ! #e%nt to co&er %ll (u!nee !n t"e country- .e '!n$ t"! % /ron*
%n$ unpro'e!on%l 'ro# #e$!% report!n* perpect!&e- .e %lo !#%*!ne t"%t t"e #e$!% "oul$
"%&e ou*"t 'or op!n!on o' t"e #!n!n* !n$utry (e'ore pu(l!"!n* t"e tory to *!&e u roo# to tell
our !$e o' t"e tory, /"!c" ! pro'e!on%lly reco##en$e$ !n or$er to (%l%nce t"e tory-
T"e report !tel' %r*ue t"%t t"e &%t #%5or!ty o' !#port o&er6!n&o!c!n* tr%n%ct!on %re 'uel
!#port- M!n!n* co#p%n!e "%&e not"!n* to $o /!t" t"!- H!tor!c%lly %n$ to6$%te, none o' t"e
#!n!n* co#p%n!e oper%t!n* !n t"e country "%$ %ny rel%t!on"!p or rel%te$ !n %ny /%y to %ny o!l
#%r7et!n* co#p%ny loc%lly %n$ o&ere% 'uel uppl!er- )or t"! re%on t"ere "% (een no
#ot!&%t!on or (u!ne ene to (uy 'uel %t !n'l%te$ pr!ce 'ro# unrel%te$ ent!t!e 'or t"e purpoe
o' !n'l%t!n* cot %n$ re$uc!n* corpor%te t%1e- It ! our un$ert%n$!n* t"%t TRA ue
!ntern%t!on%lly %ccepte$ &%lu%t!on #et"o$ %n$ yte#8 %n$ !t ! t"ere'ore /ell 7no/le$*e%(le
to %e %ppropr!%te pr!ce /"en !t co#e to !#port%t!on o' %ny *oo$, o!l !#port !nclu$e$- In
t"! re*%r$, t"e co##!!oner 'or cuto# %n$ e1c!e ! e#po/ere$ un$er cuto# l%/ to #%7e
%ny rele&%nt pr!ce %$5ut#ent !n t"e e&ent o' #!pr!c!n* o' !#port pr!or to cuto# cle%r%nce
%n$ t"! "% not"!n* to $o /!t" t"e #!n!n* co#p%n!e or t"e !n$utry % % /"ole-
)urt"er#ore, /"en !t co#e to !#port%t!on o' 'uel, #!n!n* co#p%n!e $o not t"e#el&e !#port
'uel $!rectly 'ro# o&ere% 'uel uppl!er, (ut procure loc%lly (%e$ on t"e %ppl!c%(le #%r7et
r%te- It /oul$ (e !#port%nt to note t"%t, % 'ro# ye%r 2012, t"e country9 'uel !#port proce !
centr%lly controlle$ t"rou*" !n*le ourc!n* !-e- 0ul7 Procure#ent Syte# /"!c" ! #%n%*e$ (y
Petroleu# I#port%t!on Cooper%t!on +PIC, %n$ re*ul%te$ (y E.:RA- M!n!n* co#p%n!e (uy
'uel loc%lly u!n* t"e Set Platts Fuel Rates %ppl!c%(le !n t"e #ont" o' upply- )uel !#port%t!on
%n$ upply ! one o' "!*"ly re*ul%te$ (u!nee !n t"e country $ue to !t n%ture, en!t!&ene
%n$ !t !#p%ct to t"e econo#y- T"ere'ore, t"e co##ent #%$e (y t"e report t"%t #!n!n*
co#p%n!e !n'l%te t"e!r 'uel !#port%t!on cot u!n* #!6!n&o!c!n* pr%ct!ce ! *roly #!le%$!n*
%n$ $!tort!n* t"e %ctu%l proce on t"e *roun$- T"e report #%y !n$ee$ "%&e c%pture$
#!!n&o!c!n* !n T%n2%n!%9 (u!nee, (ut t"ere ! no e&!$ence t"%t t"e #!n!n* !n$utry ! p%rt o'
t"e *%#e, %lo con!$er!n* t"%t our #e#(er #otly procure *oo$ %n$ er&!ce 'ro# uppl!er
!n Sout" A'r!c%, C%n%$% %n$ Autr%l!%8 %n$ not #%!nly 'ro# S/!t2erl%n$ %n$ S!n*%pore % t%te$
!n t"e report-
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T"e report %lo %lle*e t"%t T%n2%n!% $oe not "%&e e''ect!&e yte# !n pl%ce 'or t%1 !n'or#%t!on
e1c"%n*e /!t" ot"er countr!e- It ! our un$ert%t!n* t"%t %#on* ot"er 'oru#, T%n2%n!% !
%lre%$y % #e#(er o' A'r!c% T%1 A$#!n!tr%t!on )oru# +ATA), !nce ye%r 2010, (%e$ !n
Jo"%nne(ur*, Sout" A'r!c%- ATA) pro&!$e #e#(er t%te /!t" &%lu%(le pl%t'or# /"!c"
%llo/ 'or T%1 A$#!n!tr%t!on Aut"or!t!e !n A'r!c% to e1c"%n*e !n'or#%t!on !n repect o' cro
(or$er tr%$e to enure t"%t #e#(er countr!e %re *ett!n* t"e!r '%!r "%re o' t%1e- In %$$!t!on to
t"!, ATA) "% (een pe%r"e%$!n* t"e 'or#ul%t!on %n$ cre%t!on o' Tr%n'er Pr!c!n* Gu!$el!ne
rele&%nt 'or t"e A'r!c%n cont!nent % /ell % %!t!n* on $e&elop#ent o' pol!c!e %n$ 'r%#e/or7
to !#pro&e t%1 %$#!n!tr%t!on !n A'r!c%-
Co*n!2%nt o' t"e nee$ to %$$re uc" en!t!&e !ue, T%n2%n!% "% recently l%unc"e$ Tr%n'er
Pr!c!n* Re*ul%t!on /"!c" /ere G%2ette$ !n )e(ru%ry, 2014 to e''ect!&ely #%n%*e t"ee 7!n$ o'
tr%n%ct!on- )urt"er, !t ! our un$ert%n$!n* t"%t T%n2%n!% t"rou*" TRA u(cr!(e to % nu#(er
o' cre$!(le pr!c!n* or*%n!2%t!on /"!c" pro&!$e re%$!ly %&%!l%(le %r# len*t" pr!ce 'or %ll #%5or
co##o$!t!e6!nclu$!n* 'uel 'or cuto# purpoe-
T"e Mutu%l A$#!n!tr%t!&e A!t%nce Con&ent!on #ent!one$ !n t"e report ! not t"e ole
reput%(le 'oru# /"!c" T%n2%n!% #%y (e !*n%tory (ut e1!t!n* 'r%#e/or7 $o pro&!$e u''!c!ent
!n'or#%t!on rele&%nt to t"e Re&enue %ut"or!t!e to %!t on t"e &%lu%t!on o' *oo$ upon
!#port%t!on-
.e con$e#n !n t"e tron*et ter#, #!n!n* co#p%n!e (e!n* l%(ele$ % t%1 c"e%t- Our #e#(er
p%y %ll t%1e %n$ p%y#ent % re;u!re$ (y l%/8 %n$ %re u(5ecte$ to t"orou*" %u$!t (y T%n2%n!%
M!ner%l Au$!t A*ency +TMAA,, TRA +Sep%r%tely (y <%r*e T%1 P%yer =ep%rt#ent, Pot6
cle%r%nce Au$!t =ep%rt#ent %n$ T%1 In&et!*%t!on =ep%rt#ent,, CAG %n$ T%n2%n!% E1tr%ct!&e
In$utr!e Tr%np%rency In!t!%t!&e +TEITI,- M!n!n* co#p%n!e %re l!te$ !n #%5or toc7
e1c"%n*e /"!c" nece!t%te t"e #ot stringent co#pl!%nce %n$ et"!c%l (u!ne pr%ct!ce /"!c"
%re %u$!te$ %n$ #on!tore$ 'ro# t!#e to t!#e- It ! t"ere'ore *roly !n%ccur%te %n$ !n'l%##%tory
to t%te t"%t #!n!n* co#p%n!e %re t%1 c"e%t !nce %ny #%lpr%ct!ce %n$ non6co#pl!%nce o' t"e
t%1 l%/ ! not only contr%ry to our corpor%te culture %n$ (et pr%ct!ce (ut per"%p #ore
!#port%ntly, %ny !n%ppropr!%te %n$ unet"!c%l (e"%&!our /oul$ "%&e (een e%!ly p!c7e$ (y
rele&%nt %ut"or!t!e +t%te$ %(o&e, %n$ t"e l%/ /oul$ "%&e t%7en !t coure-
T"e %r*u#ent t"%t t"e !#port $uty e1e#pt!on on 'uel #!*"t "%&e #ot!&%te$ #!!n&o!c!n* !
!ncorrect- M!n!n* oper%t!on re;u!re u(t%nt!%l %#ount o' electr!c!ty- T"e current pe%7 $e#%n$
o' %(out 200M. c%nnot (e 'ully uppl!e$ (y TANESCO, "ence re;u!re#ent o' e1pen!&e
!n$epen$ent po/er *ener%t!on u!n* 'uel % %n %ltern%t!&e- It "% to (e note$ t"%t #!n!n*
co#p%n!e "oul$ "%&e /!"e$ to 'ully ut!l!2e electr!c!ty 'ro# t"e n%t!on%l *r!$- A nu#(er o'
#!n!n* oper%t!on +/"!c" %re connecte$ to t"e n%t!on%l *r!$, %re loc%te$ !n re#ote %re%, /"!c"
u''er 'ro# e&ere electr!c!ty !nt%(!l!ty %n$ poor ;u%l!ty po/er upply- It ! 'or t"! re%on t"%t
t%1 e1e#pte$ 'uel ! 'un$%#ent%lly ue$ 'or ut%!ne$ po/er *ener%t!on- M!n!n* co#p%n!e,
TANESCO %n$ t"e M!n!try o' Ener*y %n$ M!ner%l %re /or7!n* on t"e po!(!l!t!e o' *ett!n*
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'ull ener*y re;u!re#ent- 0ut t"! ! '%r re#o&e$ 'ro# t"e $e&!ou %n$ #%l!c!ou u**et!on t"%t
t"e #!n!n* !n$utry !n T%n2%n!% ! $eeply !n&ol&e$ !n t%1 %&o!$%nce pr%ct!ce-
T"e #!n!n* !n$utry ! "!*"ly c%p!t%l !nten!&e /!t" lon* p%y(%c7 per!o$- <%r*e c%le #!n!n* !n
T%n2%n!% ! o&er % $ec%$e ol$8 /!t" %(out > l%r*e #!n!n* co#p%n!e %n$ % nu#(er o' 5un!or
pro$uc!n* co#p%n!e /"o %re our #e#(er- Currently, t"e !n$utry contr!(ute ?->@ o' t"e
G=P- T"e country9 &!!on o' r%!!n* #!n!n*9 G=P contr!(ut!on to 10@ (y 202A /!ll (e
re%l!2e$ /"en %ll 7ey pl%yer 5o!n "%n$ %n$ po!t!&ely upport *ro/t" o' t"e !n$utry- In t"!
re*%r$, /e !n t"e !n$utry $eeply re%l!2e t"%t uc" B$o *oo$erC or*%n!2%t!on l!7e t"e Glo(%l
)!n%nce Inte*r!ty nee$ to 5ut!'y t"e!r e1!tence %n$ t"ere'ore *ener%te #ore 'un$ (y (e!n* een
to (e "elp!n* A'r!c%n countr!e !n t"e!r ;uet 'or #e%n!n*'ul oc!o6econo#!c tr%n'or#%t!on-
Ho/e&er, !n !t current report, !t ! cle%r t"%t G)I "% croe$ t"e l!ne %n$ t"ere'ore, $eer&e no
'urt"er co##ent 'ro# TCME-
Tanzania Chamber of Minerals and Energy was established in 1994 The main role of the
Chamber as a fo!al "oint for mining se!tor in#estors is to re"resent the !ommon interests of a
growing minerals industry and dealing with issues affe!ting the mining industry in general and
its members in "arti!ular The Chamber e$ists to ensure that "romulgation of "oli!y% legal%
regulatory% and fis!al framewor&s ta&e into a!!ount the interest of the members
Iue$ (y
A#(- A#! Mpun*/e
C"%!r#%n T%n2%n!% C"%#(er o' M!ner%l %n$ Ener*y
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