...Samia thumbs up mining contribution to GDP
President Samia Suluhu Hassan said the 667 million US dollars (about 1.53tri/-) agreements entered between Tanzania and Australia firms will in the near future transform the country into a hub of mining and beneficiation of graphite and rare earth minerals in the African Continent.
The firms include Evolution Energy Mineral Limited, EcoGraf Limited and Peak Rare Earth Limited from Perth, Australia.
As the world is transitioning to cleaner sources of energy, the minerals are considered as critical and strategic to the economy and national security of both industrialised and developing countries.
They are key to manufacturing and agricultural supply chains, and to the successful deployment of modern technologies in a variety of industries, including telecommunications, national defence, and both conventional and renewable energy.
President Samia revealed this during the signing ceremony held at the State House in the Capital Dodoma on Monday, noting due to the geographical location of Tanzania, the country was bound to benefit enormously.
"Surrounded by eight countries some of which possess the minerals will benefit Tanzania particularly through mineral beneficiation as well as reliable channels of transporting the minerals, thereby, benefiting the country more," said Dr Samia.
She added that "Tanzania should not take the blessing lightly but rather to make people more focused in scrutinizing our partnerships in exploiting the crucial resource."
The Head of State outlined among other benefits including taxes, tariffs, accumulation of jobs, infrastructure, technological advancement, technical expertise and social services delivery coined through corporate social responsibility (CSR).
According to her, people will get an opportunity to work within and outside the country in line with the projects, noting through negotiations with the Australian firms, joint venture companies have been established.
She noted that the achievements recorded so far by the country are attributed to the reforms made by the government, helping to constantly strengthen the sector's contribution to the GDP of the country.
"In 2021 after re-appointing the Minister of Energy and Mineral Dr Dotto Biteko, I directed him to ensure the sector contributes 10 per cent to the GDP," stated President Samia, noting that current prospects show that the target may be achieved before 2025 as per the goal.
Based on the current trend, the president expressed optimism of offsetting the target before the set schedule, applauding the minister, the commission for minerals and negotiation teams and artisanal miners for the job well-done.
However, she cautioned the artisanal miners against smuggling minerals outside the country, urging them to, instead, service the country's factories which were facing shortage of enough raw materials.
Besides, she urged people to explore every opportunity that requires local content in further boosting the country's revenues, urging district and regional authorities to give necessary support to facilitate the project's smooth operationalisation.
In ensuring Tanzanians benefit from the projects, the president cautioned the investors against placing the projects as deposits on stock exchange as a way of generating money, singling it as total sabotage to the country's economy.
For his part, Dr Biteko indicated that the contribution of the mineral sector to the GDP by July to September, last year was 9.7 per cent slightly down to the 10 per cent target.
He observed that the sector has been crucial in generating foreign exchange, adding that the projects will accumulate a foreign capital investment of 667 million US dollars and involve the much-needed minerals globally.
For his part, the Chairman of the Special Negotiation Team, Prof Palamagamba Kabudi, highlighted that the agreements involved three companies including Peak Rare Earth on rare earth elements of Ngwala in Songwe Region through two formed joint venture companies Mamba Minerals Corporation (mining) and Mamba Refinery Corporation (refinery).
He pointed out that the government will accumulate 16 per cent non-dilutable free carried interest shares making Tanzania the only country with such arrangement.
"Initial investment is valued at 439 million US dollars whereby the project will be in Ruangwa- Lindi for 18 years...the value of gross sales will be over 1.86 billion US dollars. As per the distribution, the investor is expected to acquire 389 million US dollars equivalent to 47 per cent and the government 437 million US dollars (equivalent to 53 per cent) economic benefits.
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He said that Evolution Energy Minerals Limited in Chilalo of Ruangwa District through a joint venture company of Kudu Investment will see the government owning 16-per cent shareholding non-dilutable free carried interest, while the investor will acquire 84 per cent shares. Initial investment is valued at 100 million US dollars.
On the other hand, the third project involves EcoGraf Limited dealing with graphite in Epanko of Mahenge District in Morogoro Region through Duma Tanz graphite limited Joint venture company with a shareholding of 16 per cent non-dilutable free carried interest and 84 percent accumulated by investors. The Investment is valued at 127,700 million US dollars.
Prof Kabudi outlined that the signed contracts comprise a framework agreement on economic benefits sharing, shareholders agreement and memorandum and articles of association because of the established companies at Business Registration and Licensing Agency (Brela) as well as a draft joint financial model which will be modified from time to time.
