Overview

Mineral Resources Administration in the East African Region is done at State Level. Each Sovereign Jurisdiction makes Regulations for Mineral Administration separately and independently is Accordance to the Country’s Laws and Constitution.

Tanzania

In Tanzania the Ministry of Energy and Mineral (MEM) is the Government Arm that Administers and Regulates Mineral resources. According to Tanzania’s constitution the State owns all Mineral Rights underground. However the Government does not play a direct Role in Mineral Exploration or Mining. The role of the Government in the Sector is to act a Regulator, Promoter, Facilitator and Service Provider.

The Ministry of Energy and Mineral’s Mandate is to provide Clear Policy Guidelines, Facilitate and oversee the implementation of those policies. The MEM has various Arms and Bodies that carries out Separate functions of its Mandate. These Include;

  • Policy Planning Unit
  • Administration Personnel Division
  • Geological Survey of Tanzania.

The Government Pursues Regulatory and Fiscal Policies in Accordance to State Mineral & Energy Legislation the “New Mining Act 2010” that was Amended by Parliament in 2010. The Act sets out Clear Guidelines of all aspects of Mineral resources Administration, governance, Management and Royalty| Revenue Collection.

Licensing

The Ministry of Energy and Minerals from its Beurocratic Headquarters in Dar es Salaam processes Mineral Licenses Application. The Department of Minerals Division Commissioner’s office is charge of Issuing licenses although some applications may be done at the Zonal Level form the Zonal Commissioners office.

There are Various Types of Licenses including; Primary Mining Licenses, Prospecting License, Gemstone Mining License, Mining Licenses. Each category of these Licenses is obtained through separate Requisites a set out the New Mining Act 2010.

Downloadable PDF New Mining Act 2010

The New Mining Cadastral Portal

Tanzania’s Ministry of Energy and Mining and Spatial Dimension have developed a mining Cadastre Portal to improve transparency and promote Investment in Tanzania’s Mineral sector. Investors can now view tenement maps and view detailed information. Search functionality is done by using tenement code or Company Name. MEM is currently undertaking a data validation exercise of all tenements in Tanzania’s mining sector.

The project was an Initiative of the World Bank’s “The Billion dollar map for Africa” to upgrade the Mining cadastre information management system to support online transaction and provide an integrated Geo-portal for all stakeholders in the Mining sector to interact with the Ministry via modern web based technologies.

The Ministry of Energy and Mineral manages one of the most complex Mineral Rights Portfolio Globally. With about 40,000 Mineral Rights owned by about 30,000 Companies and individuals managed through government offices spread across the Country.

The Enterprise-ready and integrated solution will drive efficient administration of mineral rights and contracts. The Most Audacious step forward yet by Tanzania’s government to combat the Challenge of Transparency in Mineral Licensing, corruption, Dispute and ownership conflicts – all factors that have been predominant in undermining the Investment Business Environment in the country’s Extractive Sector.

Eimara Africa Resources Offers to make License Application for Prospectors, Exploration and Mining Companies interested in Developing minerals resources in Kenya & Tanzania.

Environmental Regulation.

Before Mining and Exploration companies can obtain a Mining Licenses they are required to undertake a Mandatory Feasibity & Environmental impact study.

The Regulations is set out in the Mining Act 2010 in Coordination with the National Environmental Management Council (NEMC) that oversees the implementation of the Environmental regulations and issues Environmental Certificates for. Projects Cannot Acquire Mining Licenses for Mine Development and Production without Obtaining the ENVIROMENTAL IMPACT ASSESSMENT CERTIFICATE in accordance to Section 92(1) of the Environmental Management Act No. 20   of 2004.

The Technical report requires that a Scoping Study is Undertaken assessing the Environmental and social Impacts of the Projects Area. The Study Examines the Bio – diversity, Topography, Climate, Soil, Hydrology, Geology, Flora & Fauna. The Technicians must state the Projects Potential Affects of these aspects of Environment and compile a Comprehensive Environmental Management Plan Outlining the Solutions to a Sustainable Mine Design in Line with Environmental Regulations Compliance.

Eimara Africa resource offers Technical Assistance to Exploration & Mining Companies to Undertake Feasibity and Environmental Impact studies to Comply with the Environmental Regulations as set in the Mining Act 2010.

 

Fiscal Policy

The Fiscal Terms for the Mining sector is set out the Mining Act 2010 under Section (To confirm the clause). The Policies Implementation is overseen by the Ministry of Energy and Minerals in Coordination with Tanzania Revenue Authority.

The Tanzania Fiscal regime comprises of three types of Taxes – Input, Output and Profit Taxes.

  • Input Taxes: include Import duty, value added tax and Exercise duty.
  • Output Taxes is Royalty (4%) is charged on the netback value of mineral sold at the rate of 4% for Gold and other Minerals and at 5% in Diamonds and Gemstones.
  • Profit Taxes: These Taxes include Corporate tax at 30 % of the net income from Mining activities, withholding tax on paid out dividends and taxes on distribution of branch profits to non –residents at 10%

As a Incentive to Stimulate and promote growth in Mining and Explorations. Under Chapter Tanzania income Law 2004 & the 2012 VAT Act Cap 147 Exploration and Mining Companies are relieved from paying income Tax for their Initial years of exploration till after Production. Import duty, Value added

Investment Incentives

Fiscal Stability Agreements & Mining Development Agreements are some of the Incentives that the Government of Tanzania gives to Foreign Mining companies to Promote FDI in the Mining Sector.

Fiscal agreements are made under Section …of the Mining Act 2010 and are restricted to assurance s of Stability of the Fiscal regime applying to a particular investor at the time the agreement is made. The Agreement covers the life of the mine project. However the Minister agreement must be registered by the Minister for Finance in the Register of Tax agreements.

The other tool for Fiscal Incentive is the Mining Development Agreements (MDAs). These agreements are entered between the Government of Tanzania and Major Mining companies upon opening Major Mining operations. All Mining Companies in Tanzania including Barrick, Anglo Ashanti and Resolute signed MDAs with the GOT, however not all MDAs are identical.

Full Terms Main Terms and Conditions of MDA contain ‘Tax Stability’ Clauses that preclude the raising of taxes among other Factors that incentivize the Investment Business environment.

Still Geology is considered to be Tanzania’s Principal Mining & Investment Stimulant. Especially for Gold, the World Class Lake Victoria Gold Area is the Best in Africa only Surpassed by Barberton in South Africa.

For a Comprehensive Publication on Investments Incentives, Geology and Cost of Doing Business in Tanzania’s Mining & Exploration. Subscribe to Our External Due Diligence Package:

  1. Cost of Doing Business “Investing in Tanzania’s Mining & Exploration

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Investment Guarantee

Tanzania’s Policies emphasizes the importance of the private sector. Foreign and Local investors, including investors in Mining are protected against Nationalization.

Property guarantees are provided under the Multilateral Investment Guarantee Agency (MIGA) to which Tanzania is a Member. Tanzania is also a member of the international Centre for Settlements of Investments Disputes (ICSID), a body affiliated to the World Bank.

In 2000 the World Bank Group Multilateral Investment Guarantee Agency (MIGA) accorded Barrick a USD $115.8 million political guarantee to cover Bulyanhulu Investments against the Risks of transfer, restriction, expropriation war and Civil Disturbance.