Tanzania to table mining laws

Tanzania will this October table mining laws which will allow it to take stakes in mines, Minerals & Energy Minister William Ngeleja said.

The legislation will give government power to acquire a stake of between 10 percent and 15 percent in strategic gemstone mining, Ngeleja said at a seminar on mineral resources development in Dar es Salaam today.

“This will not be something automatic; it will very much depend on the government’s decision on whether a particular gemstone is strategic in government’s view or not,” he said.

Tanzania is Africa’s third-largest gold producer, after South Africa and Ghana, and holds the only known deposit of tanzanite, a precious gemstone. Barrick Gold Corp., the world’s largest producer of the metal, and third-ranking AngloGold Ashanti Ltd. are among companies with mines in the country.

A panel appointed by the nation’s president in 2007 suggested higher royalty rates and fewer tax breaks to help boost revenue from Tanzania’s mineral wealth. Mining companies want government to reconsider, saying this will lower profits.

“We do not want to enact prohibitive tax laws; we want them to be attractive to investors but where there are shortcomings we will definitely address them, Ngeleja said, declining to provide more detail.

Tanzania’s mining legislation hasn’t been reviewed for 12 years, he said. Government intends addressing compensation to those who will be required to leave areas identified for mining activities, and wants to introduce laws to enforce local procurement of goods and services.

“We want investors in the mining industry to buy locally those things which can be found in our local market, but also we will make sure that the local market meets the required standards,” he said.

Source: Bloomberg