Tanzania's mining firms have three months to comply with law
Tanzanian President John Pombe Magufuli. He has been on crusade that mining companies that have been working in Tanzania have been ripping off the country, mainly by under-declaring the true worth of what they take out of the country. PHOTO | FILE
The new guidelines pushed for the mandatory listing of mining companies on the DSE by August last year as part of measures aimed at increasing transparency and sharing out wealth from the country’s natural resources.
The rules give the government the right to oversee the implementation of these regulations, evaluate and review contracts as see fit.
President John Magufuli has previously complained that the country is not benefiting as it should from its resources.
Tanzania is set to restructure its troubled mining sector after the government gave mining companies three months to comply with new guidelines, which give local mining firms and financial institutions preference.
Part of the regulations state:
“A contractor, subcontractor, licensee or other allied entity shall before the commencement of mining activities submit a plan to the Commission specifying the role and responsibilities of the indigenous Tanzanian company; the equity participation of the indigenous Tanzanian company; and the strategy for the transfer of technology and know-how to the indigenous Tanzanian company,”
“Mining companies will have to open and operate bank accounts in a “100 per cent” Tanzanian-owned banks.
The rules give the government the right to oversee the implementation of these regulations, evaluate and review contracts as see fit.
President John Magufuli has previously complained that the country is not benefiting as it should from its resources.
New laws
Mid last year, Tanzania’s parliament pushed for new laws on its extractives industry: The Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Bill, 2017; the Natural Wealth and Resources (Permanent Sovereignty) Bill, 2017; and, the Written Laws (Miscellaneous Amendments) Act, 2017.
The new guidelines pushed for the mandatory listing of mining companies on the Dar es Salaam Stock Exchange by August last year as part of measures aimed at increasing transparency and sharing out wealth from the country’s natural resources.
President Magufuli signed the Mining Act in July last year and it requires the government to own at least a 16 per cent stake in mining activities. The troubled mining sector generates about 3.5 per cent of the country’s GDP.
The government accused gold mining company Acacia, of tax evasion and under-declaring amount and types of minerals exported. The government banned it from exporting gold/copper concentrates, which account for over 50 per cent of the company’s operations.
Other major foreign-owned mining companies that will be affected by the new legal regulations on local content include the South African AngloGold Ashanti and British mining company Petra Diamonds.
