International law firm Clyde & Co. has recently published an alert on a series of changes made to Tanzanian mining laws and regulations in February 2019.
These include changes to the Mining Act 2010 and changes to mining-related regulations, which Clyde & Co highlights and compares the current provisions.
When passed into law, which the firm estimates to be imminent, the Mining Act Amendment Bill will have a significant impact.
The main points to note include:
-the wide definition of “mineral ore”, which encompasses all naturally occurring material in the form of rocks or sediments from which economically viable minerals can be extracted;
-the inclusion of the definition of the term “tailings”, which are materials left over after the extraction of the mineral ore, which suggests a drive to get as much out of the mining sector as possible; and
-the fact that tailings and mineral ores can be traded in Tanzania, thus providing an opportunity to collect more revenue.
Meanwhile, the New Local Content Regulations amends the Mining (Local Content) Regulations that were created in 2018 (the Old Local Content Regulations).
These amendments include the following:
-An indigenous Tanzanian company shall have at least 20% of its equity owned by Tanzanian citizens, against current 51%;
-Period of review of the local content plan extended;
-The requirement to operate a bank account and transact business with a Tanzanian bank.
Clyde & Co. concludes that while the New Local Content Regulations continue to support the spirit of local content reflected in the Old Local Content Regulations and other supporting legislation, it is clear that stakeholders’ views were considered, with the aim of improving investment opportunities, specifically in the mining sector.
Mining and quarrying activities in Tanzania contributed 3.7% to its GDP with USD 1.78bn in 2014, compared to only USD 598m in 2009, representing a value increase of almost 200%.
Based on Tanzania’s Development Vision 2025 plan, the mining sector is expected to account for 10% of the GDP by that year.
