Tanzania Mining Act Discussed in Arusha

Discussions on the new Tanzania Mining Act and the implementation of Mineral Policy have begun in Arusha with a three-day meeting between stakeholders from the mining sector and various foreign representatives.

At the opening of the session, David Jairo, the Permanent Secretary in the Ministry of Energy and Minerals, indicated that, following a number of amendments to the Mining Act, the country’s mining sector is now currently awaiting major legislative reforms to be enacted.

While journalists were not permitted to attend the discussions, according to a foreword from William Ngeleja, the Minister for Energy and Minerals, the favorable geological environment in Tanzania contains a lot of potential particularly in regards to its rich mineral potential.

According to the statement, the creation of the country’s mineral policy in 1997 was followed by the amendment of fiscal laws for the Tanzania mineral sector and the passing of the mining act in 1998.

The statement went on to indicate that a combination of the mineral policy and the legal and regulatory framework in general is responsible for attracting numerous exploration and mining firms to the country, thus improving the overall industrial sector of the country.

“During the 10 years of implementation of the policy and law over USD 2.5 billion has been invested in the sector,” said Mr. Ngeleja in his statement.

The decision to begin deliberations on possible changes to the Mining Act officially began in November 2007 with a 12-member presidential review committee on mining contracts which recommended in 2008 that the government own a 10 percent stake in all mining companies operating within the country.

The National Assembly later began its discussions on the Committee’s report in October 2008, a move that was quickly followed by a request that the government suspend sales of its shares in mining companies.

This request has served to indicate the stand that any of the government’s shares should be supervised by the State Mining Corporation (STAMICO) and that, in general, no mine in Tanzania should be entirely foreign- owned.

In addition to these findings by the Mining Contract Review Committee, it was also found that the mining royalties on metals should be increased to 5 percent, royalties on diamonds and gemstones should be increased to 7 percent, royalties for cut and polished stones should be instated at 3 percent and that tax relief should be stopped on fuel imports for gold mines.

According to the findings, the calculation of the royalties that are collected from the mining sector should be based on gross value rather than on a bet back value profit and profits that are collected from the proposed fuel tax on mining companies should be spent on building roads.