The government’s free carried interest in SOTTA Mining Corporation has risen by 4 percent to 20 percent from 16 percent, marking a significant increase in ownership.

According to a statement shared with the press yesterday, SOTTA is the first mining company in which the government, through the Office of the Treasury Registrar, has expanded its ownership beyond the 16 percent minimum. This increase is attributed to the government’s pro-business policies and strategic investment initiatives.

Under the 2010 Mining Act, as amended in 2017, the government is entitled to acquire at least 16 percent of the shares in any mining company, subject to the type of minerals being mined and the scale of the investment.

Nehemiah Mchechu, the Treasury Registrar, explained that the growth in the government’s free-carried interest is a result of positive engagement with the Australian parent company, Perseus Mining Limited.

"Investors have responded favorably to the business environment fostered by the government, making it easier to negotiate an increase in the free carried interest shares," said Mchechu. He added that this increase will lead to higher dividends for the government as a shareholder.

To further increase its stake in mining ventures, the Office of the Treasury Registrar is currently reviewing existing mining contracts to identify areas for improvement. "We are reassessing the contracts to ensure the government can benefit more from its natural resources," Mchechu noted.

While the government’s minimum stake is set at 16 percent, there is room for this to increase depending on the terms negotiated with investors. However, many investors have limited the free carried interest shares to the 16 percent threshold, prompting the government to reconsider these agreements in hopes of securing greater ownership.

Isaac Lupokela, Chief Financial Officer of SOTTA Mining Corporation, praised the government for its efforts in advancing the mining sector. He made these remarks while briefing President Samia Suluhu Hassan during the closing of the seventh Mining Technology Exhibition in Geita.

Lupokela confirmed SOTTA’s commitment to delivering the Nyanzaga gold mine, a major project valued at approximately $500 million (around 1.4trn/-). Set to span over 15 years, the project is expected to create 1,500 direct jobs for Tanzanians.

"Our investment is a reflection of the favorable policies in place under President Samia Suluhu Hassan," said Lupokela said. 

He also shared that the company has disbursed over 94 percent of the compensation required to begin the project, with the remaining 6 percent awaiting the resolution of a local land conflict.

In addition to the ownership increase, the government has already started benefiting financially from the project. In May, SOTTA Mining paid $16 million (approximately 43.6bn/- at an exchange rate of 2,724/-) in capital gains tax to the government.