AMN - Progress in Tanzania, but will it be of benefit? – comment by Yolanda Torrisi

After a period of uncertainty which has affected companies operating in Tanzania’s mining industry, some progress has been made with the appointment of a chairman and commissioners for the country’s new mining commission. This development paves the way for the issuance of new mining licences after a lengthy impasse.

Like many others, the Tanzanian government has been seeking bigger revenue from its mineral resources by overhauling the fiscal and regulatory regulations applying to the industry.

These intentions were first announced by new President John Magufuli when he came to office in late 2015 with a series of subsequent statements made in light of his intention to boost revenue from the sector and distribute it to the people.

This has increased uncertainty and scared away investment, not only deterring potential investment but also impacting many of the foreign companies already operating in the east African country.

In July 2017, Magufuli suspended the issuance of all new mining licences until the new mining commission was in place … and this process has taken around nine months to complete.

Idris Kikula, a former vice chancellor of a state university, has been appointed chairman with eight commissioners to serve under him.

Appointment of the commission, coupled with new regulations published in January, mean Tanzania can now resume issuing new mining licences to investors.

The new commission has been given extensive authority to regulate and monitor the mining industry and mining operations. The legislation which led to the creation of the body states that one of its primary objectives is ‘to advise the government on all matters relating to the administration of the mineral sector with the main focus on monitoring and auditing of mining operations to maximise government revenue’.

It must also try to curb smuggling of minerals and tax evasion by mining companies. In this regard, it has powers to suspend and revoke mining exploration and exploitation licences and permits.

The commission will also monitor and audit the quality and quantity of minerals produced and exported by all miners operating in Tanzania, including small-scale operations, to determine their tax liabilities.

This includes auditing capital investment and operating expenditures of large mines and sorting and assessing the values of minerals produced for tax purposes. The encompasses producing indicative prices of minerals referring g to local and international markets in order to assess royalties.

The industry has been through a very uncertain time in Tanzania for the past few years, so it is to be hoped that appointment of the commission will create more certainty and result in the country benefiting more from its bounty of mineral resources.

It is also hoped that the move will not restrict foreign involvement in the sector, as this would stifle the industry and put a severe dent in the government’s aim of generating additional revenue.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com