Vale among mining companies to be audited by Guinea’s mining ministry

Wednesday, 08 February 2012 01:44:44 (GMT+2)

According to business media reports, Guinea's mining ministry will perform audits of companies operating mines in their country which could result in some companies' licenses getting revoked. One of the companies to come under scrutiny is Brazilian-based iron ore giant Vale SA--accusations include not following the law when procuring a mining license from English-based natural resource company BSG Resources, Ltd. In April 2010, Vale purchased the Simandou North Blocks 1 and 2--previously owned by Rio Tinto Plc.--and the Zogota project in Simandou South for US$2.5 billion.

In addition to the audits, Guinea's mining ministry will be revising fiscal demands on miners that were adopted in a new mining code by the government in September 2011. One change will be to lower taxes on the mining sector through royalties or export duties. Other changes brought about by the new code include increased state participation, an increase in custom duties from 5.6 percent to 10 percent and additional requirements for mining permits that limit the validity of a number of existing concessions.

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