UPDATE 1-Tanzania laws would allow govt to tear up mining, energy deals

  • Reuters
  • Stock Market News
UPDATE 1-Tanzania laws would allow govt to tear up mining, energy deals
Credit: © Reuters.

(Updates with quotes, context)

By Fumbuka Ng'wanakilala

DAR ES SALAAM, June 29 (Reuters) - The Tanzanian government submitted three bills to parliament on Thursday which would allow it to force mining and energy companies to re-negotiate the terms of their contracts as part of a presidential drive to increase revenue.

The bills, expected to be fast-tracked, will affect multinationals and follow the recommendations of a committee investigating the east African country's gold industry.

The committee called for an urgent overhaul of the country's mining, gas and fiscal codes.

The three bills, which cover natural resources contracts, sovereignty and amend existing laws, would allow the government to renegotiate or dissolve contracts.

International companies plan to build a $30 billion liquefied natural gas (LNG) export terminal in partnership with state-run Tanzania Petroleum Development Corporation.

They include BG Group, part of Royal Dutch Shell RDSa.L , Exxon Mobil (NYSE: XOM ) XOM.N , Statoil STL.OL and Ophir Energy OPHR.L .

The bill on natural wealth and resources reads: "Where the government has served notice of intention to re-negotiate the arrangement or agreement ...and the other party fails to agree to re-negotiate the unconscionable terms or no agreement is reached ...such terms shall cease to have effect and shall by treated as having been expunged."

It defines "unconscionable terms" as anything that is "contrary to good conscience and the enforceability of which jeopardises the interests of the people" of Tanzania.

The parliamentary session has been extended for several days to allow lawmakers to study the bills and approve them, National Assembly Speaker Job Ndugai said.

Tanzania is Africa's fourth-largest gold producer and has made vast natural gas discoveries but remains one of the poorest countries in the world.

Mining companies that could be affected by the proposed law changes include AngloGold Ashanti ANGJ.J , Acacia Mining Plc ACAA.L and Petra Diamonds PDL.L .

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