Canada-based Olympus Pacific has announced to invest an additional $25 million in gold mining projects in Vietnam, $75 million less than its commitment last year.
Olympus Pacific is the only foreign investor that is permitted to mine and export gold in Vietnam. It has two operating projects in Bong Mieu, the central province of Quang Ngai and an exploration project in Tien Thuan, Binh Dinh province.
The firm has invested around $80 million in the above projects and last year it stated it would invest an additional $100 million in Vietnam. However, this plan nearly failed due to difficulties that arose from the regulations to impose 10 percent tax rate on material gold for export, which took effect on January 1, 2011. The investor reduced its investment from $100 to $25 million.
Olympus Pacific’s CEO David Seton told Bloomberg that because of tariff changes, the firm has to be more careful with its investment.
Seton said that the $25 million will be invested in developing mines, upgrading factories and completing waste treatment systems. These changes will help Olympus Pacific to raise its output from 45,000 ounces of material gold in 2010 to 75,000 ounces this year.
The investor said it will ask the Ministry of Finance to cut taxes on exporting material gold while also seeking partners to refine gold to reduce exports of raw gold.
The Ministry of Finance’s Tariff Policy Department has recently met with related enterprises to discuss the new relations on export taxes on gold and raw ores.
“After the new regulations took effect, we have continued to collect opinions and listen to feedback from enterprises to make necessary amendments. However, regulations on raw gold export tax will not change in the coming time,” said an official from the Tariff Policy Department.