22 July 2017

Tanzania: Govt Suspends Issuance of Mining Licences

Photo: Africa Finance Corporation
Mining Operations.

FEW weeks after the overhauled mining laws became operational; the government yesterday suspended issuance of mining licences until a Mining Commission is established.

Among major changes, which have been initiated by the law, includes dissolving the Tanzania Minerals Audit Agency (TMAA) and all zonal mine offices.

Energy and Minerals Deputy Minister, Prof James Mdoe revealed this in Dar es Salaam, yesterday, while briefing journalists on the 2010 mineral law, which was amended through the Written Law Miscellaneous Amendments Act of 2017 and is accompanied by major changes.

"From now on wards, companies or individuals intending to export minerals outside the country, will be required to pay a clearing fee of one per cent of the content which has undergone inspection and evaluation," said Prof Mdoe.

According to the PS, this was a transition period before the establishment of the commission, therefore, all the roles which were performed by TMAA and the zonal mine offices, will be carried out under the Commissioner for Minerals.

He cited such responsibilities as collection of royalties on industrial and construction minerals, verifying all payment vouchers and ensuring security in mines. Other roles include supervision of mines, carrying out a review of all gold producers' projects and inspecting airports, ports and borders to control flee of minerals.

In line to terminating the agency and mine offices, the PS said all staff who worked in the offices and are not associated with any allegation whatsoever, will continue to serve as public servants in the ministry.

He further noted that as part of their responsibilities, the workers will receive various payments in accordance to the new law as well as issue extension services to small-scale miners.

The PS went on identifying other changes including the increase of royalties in metallic minerals such as gold, copper and silver from four per cent to six per cent. As for diamond and other expensive gemstones such as tanzanite, ruby and garnets, the increase is also six per cent from the formerfive per cent.

"With the new law in place, a five per cent of the value of minerals will be deducted as withholding tax collected via brokers or dealers buying minerals from small-scale miners and presented to the Tanzania Revenue Authority (TRA)," he said.

Prof Mdoe observed that several challenges have been realised after suspending the offices as some of the stakeholders refuse to cooperate with the remaining staff.

"I would like to call upon stakeholders to give maximum cooperation to the staff for they are still working for the ministry to increase effectiveness, especially in the collection of government revenues in this transition period," noted the PS.

He emphasised that the former TMAA and zonal mine offices staff will be working under the Commissioner for Minerals, therefore, all their working tools including seals, receipt will have the commissioner's tittle.

After shocking revelations, which brought the nation to a standstill, that for over a decade the nation has been losing its revenues to dreadful mineral contracts due to bad laws governing the sector.

Two reports from committees formed by President John Magufuli pushed the Head of State to grant permission to the Parliament to extend their seat ing to overhaul the laws.

This resulted in the Written Laws (Miscellaneous Amendments) Act, 2017, the Natural Wealth and Contracts (Review and Renegotiation of Unconscionable terms) Act, 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Act 2017, that are now in effect.


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