Foreign investors' mounting protests over new laws they fear will harm their businesses are shaping up into an acid test for President Jakaya Kikwete's government.

The government has lately come under pressure from companies that have invested in the mining and telecommunications sectors, which are opposed to two separate pieces of legislation they argue could drive them out of business and scare off would-be new entrants.

President Kikwete, who recently ignored pleas from the chief executive officers of mobile phone companies to reject some clauses in the Electronic And Postal Communications Act, and signed it into law, is this week facing similar demands from investors in the mining industry.

On Thursday, the Tanzania Chamber of Mines and Energy (TCME), which represents the major mining companies, issued a press statement in Dar es Salaam denouncing the Minerals Bill 2010, and appealed to President not to assent to it before the amendments they have proposed are effected.

The latest development is likely to put the government on the spot, even as President Kikwete is expected to up the country's drive to woo more investors, as the host of the World Economic Forum (Africa Chapter) in Dar es Salaam next week.

It is also a challenge to the administration as it endeavours to carry out a delicate balancing act between promoting popular national economic interests and fulfilling some of the demands by foreign investors, whose contribution in the last decade has helped to build a fledgling private sector.

The TCME executive secretary, Mr Emmanuel Jengo, confirmed yesterday that they would be launching an official protest to demand amendments to the Mining Bill before it comes law.

Mr Jengo said the chamber was unhappy with the way the government had handled the Mining Bill and vowed to vigorously defend their defend their position.

A manager with one of the big mining firms told The Citizen in a telephone interview that their protest would be lodged with the State House-based Investor Complaints Bureau and the ministry of Energy and Minerals.

"If the government refuses to consider our appeal, this Bill is bound to slow down the mining industry," he said.

Separately, independent sources in the diplomatic circles in Dar es Salaam, also told The Citizen that some of the mining and telecommunication companies had approached their governments to reach out to the Kikwete administration over the new laws with a view to influencing amendments.

Efforts to get a comment from the Swedish Ambassador, who is currently the donor community's spokesperson, failed, as he was said to be too busy to accept media interviews.

Contacted for comment, the Commissioner for Minerals, Dr Peter Kafumu, said he could not comment because the Bill had already been sent to the President for his assent.

However, he added, some of the TCME's concerns could be considered when the ministry draws up the regulations. But he hastened to add that his office had not received any recommendations from the TCME.

The TCME argues that the Bill threatens to undermine investor confidence in the country and curtail future mining projects if effected in its current form.

The Bill, passed by Parliament last week, provides for the raising of mining royalties by one per cent, prohibits foreign investors from gemstone mining, makes it mandatory for mining companies operating to list on the Dar es Salaam Stock Exchange, and allows the government to acquire stakes in mining projects.

"The Bill fails to appreciate that Tanzania's desire to become the preferred destination for mineral exploration and investments demands that it becomes significantly competitive," the chamber said.

The chamber represents companies such as Africa Barrick Gold, the South Africa-based AngloGold Ashanti Limited as well as Australia's Resolute Limited.

Yesterday, a private company's executive supported the concerns being raised by the mining and telecommunication firms, even as independent economists backed the government reforms.

Speaking to The Citizen in Songosongo village in Kilwa district, the Songas Tanzania Limited managing director, Mr Christopher Ford, cautioned the country to tread carefully with its investment policies as the world recovers from the economic crisis.

"(Investment) policies should be crafted in consultation with investors. The goal should be to attract investors and ensure that the country benefits from its natural resources. It should be a balancing act," he said.

He said the investment climate had changed after the global crisis and that policies should reflect that reality.

"Of course, there is improvement which can be done on investment policies, but the changes should not target anyone," he said.

He was commenting on recent sentiments raised by investors in the mining sector over the new mining law, as well as the complaints by mobile phones operators after a law was enacted, forcing them to float their shares on the DSE after three years of operations.

In Dar es Salaam, Prof Tedd Maliyamkono, the co-author of a popular book tilted, "Why Pay Tax", said investors were worried about losing their huge profits.

"The country should not be shaken by investors who usually want reforms that favour only on their side," he said.

Mr Maliyamkono, the executive director of Eastern and Southern Africa University Research Programme (ESAURP), said even countries that had made major steps in the mining sector, such as South Africa and Norway, had revised their policies.

An economist at the University of Dar es Salaam, Dr Haji Semboja, said it was high time investors respected the country's policy reforms as they would benefit both investors and the public.

"They could be right to worry about the future climate, but because they have fiscal guarantees, the new Mining Act will not affect them in the immediate," he said.

He pointed out that there was no problem with the country carrying out policy reforms.

"Initially we were not able to appreciate Tanzania as a resource endowed country, but now we do. The country is able to access financial resources for public investment and steer its own development," he added.