A new Mining law is being drafted by Madagascar that proposes to hike royalties on nickel, cobalt, precious metals, and gemstones to 4% from current 2%. The law also proposes a government stake of at least 20% in any marketable mining production. Madagascar’s mining chamber denounced the proposal pointing out that the changes will impair new investment and endanger existing mining operations in the country.
The new proposal will see Mining royalties rise to 8% from 2% for raw precious stones. Rough industrial stones would attract a 6% royalty rate while cut industrial stones would be taxed at 3%. Speaking about the draft law,Mines Minister Fidiniavo Ravokatra explained that Madagascar has arrived at the suggested rates after studying the royalty rates with other countries and categorised different minerals.
Democratic Republic of Congo also had introduced a new mining code in 2018 raising the royalty rate for precious metals from 2.5% to 3.5%, causing an outcry from miners operating there.
