Senegal expects to earn 15 billion CFA francs ($30 million) in 2013 in taxes on mining revenue as it seeks to boost money it collects from the growing industry in the West African nation.
The revenue tax, which was implemented after President Macky Sall came to power in April, earned the government 10 billion francs this year, according to a budget document handed to reporters at the National Assembly on Dec. 14.
“The mining sector makes a very weak contribution to the budget of the state,” according to the document, which was approved by lawmakers in the capital, Dakar, on Dec. 9.
Mining will boost growth in Senegal’s economy, the second-biggest in the eight-nation West African monetary union, to 4.3 percent next year from 3.7 percent his year, according to the International Monetary Fund. Mineral Deposits Ltd. of Australia mines zircon the country, while Toronto-based Teranga Gold Corp. produces gold at the eastern Sabodala mine. The government earned 3.1 billion francs in 2011 from the Sabodala mine, according to the budget document.
Many of the country’s mining “conventions were badly negotiated,” according to the report. Last month, Energy and Mines minister Aly Ngouille Ndiaye said the government had “started looking at some of these contracts” and were waiting for “recommendations” on whether to adjust the accords.
The eastern region has 600 million metric tons of proven iron-ore reserves, according to the government. Tizir Ltd. a U.K.-based mineral sands miner, expects to start producing 7 percent of the world’s zircon and titanium feedstock next year, when it finishes building a $516 million dredging plant on the coast of Senegal.