Maputo — The Mozambican government has not yet received any information about the sale by the Anglo-Australian company Rio Tinto of its coal assets in the western province of Tete.
Cited by the Maputo daily “Noticias”, the Minister of Mineral Resources, Esperanca Bias, said “Formally I don't know the amount paid to Rio Tinto in this deal, but you can be sure that any sum involved will be taxed”.
Approached by the independent weekly “Savana”, Bias's ministry sent a series of written answers, also stressing that the government “has not yet received any final communication about the completion of the transaction, nor its terms and conditions”.
Nonetheless, the Ministry considered the sale of assets as “a normal process in business operations. Rio Tinto itself resulted from a series of mergers and acquisitions, some of which occurred in this country, such as the acquisition of Riversdale Mining in 2011”.
“Operations of this nature”, the Ministry continued, “are always intended to improve the position of the company concerned on the market, and to channel its investments to areas it regards as strategic priorities”.
The government's concern, it added, “is to ensure continuity in the mine's operations, and to ensure that no damage occurs, which could happen were the mine to be paralysed for a significant period”.
Rio Tinto sold out to International Coal Ventures Ltd (ICVL) of India. With this acquisition, the Ministry said, ICVL took over the contractual position of Rio Tinto “guaranteeing all its contractual obligations to the state and to the workers”.
Rio Tinto announce d in late July that it had sold the open-cast mine at Benga and its other coal assets in Tete to ICVL for 50 million US dollars. Rio Tinto had acquired these assets as a result of its takeover of Riversdale, for which it paid 3.9 billion dollars.
The Riversdale deal went sour within two years. Rio Tinto was obliged in 2013 to write down the grossly overvalued Riversdale assets by 3.5 billion dollars.
Now Rio Tinto has pulled out altogether. The sales price of 50 million dollars is so low (12 per cent of what it paid for the assets), that it has raised suspicions. Unnamed economists cited by “Savana” wondered whether there was any hidden exchange of assets between Rio Tinto and ICVL.
Or possibly Rio Tinto has dumped into ICVL's lap the ongoing dispute about the capital gains tax which should have been paid when Riversdale was acquired. The chairperson of the Mozambican Tax Authority (AT), Rosario Fernandes, has made it clear that this matter is far from closed.
The sums involved could be very large. If the entire 2011 Riversdale purchase is subject to capital gains tax at the standard rate of 32 per cent, that would net the Mozambican treasury 1.25 billion dollars.