Mining sector contribution to GDP rises to 10 percent

The mineral sector accounted for 7.2 percent of the gross domestic product (GDP) in 2020/21 but President Hassan said such a contribution reached 10 percent last financial year.

“When appointing Dr Bitekio as the minister for Minerals, I directed him to ensure the sector contributes 10 percent to the GDP by 2025, but he broke the record and achieved it last year. That is why I changed his appointment so that he can also transform the energy sector,” she said.

In another development, she directed the minister for Minerals, Anthony Mavunde, to have a mineral database by 2030 that will enable Tanzania to identify potential areas for mining to benefit the country.

Speaking about small-scale miners who will benefit from the Stamico equipment, she said the government was aware of the challenges facing small miners due to the lack of a database that makes them mine by luck and therefore fail to access loans.

“The research will improve geological information in the country, especially as currently only 16 percent has been surveyed, causing us to get less revenues and depend on loans for development,” she said.

She noted that they have launched five mining equipment for small miners and expect to increase more next year.

“It is my hope that the equipment will bring development to small miners who currently depend on renting for their activities,” she said.

According to her, the government appreciates the mineral sector contribution that has created employment for the people and the youth while also contributing to the economy.

She noted that during her visit to Lindi and Mtwara, she was encouraged by the decision to build a salt industry in the region and put up a demonstration farm to empower the women.

She called on the Tanzania Bankers Association to look into providing loans to small miners, especially in surveyed areas.

The minister for Minerals, Mr Antony Mavunde, said for the mineral sector to have a huge contribution to the national economy, it was vital to do research and have data on rocks with minerals.

 “For this to be possible, we need a high-resolution airborne survey that will give us the data to improve the survey,” he said, adding that the sector currently contributes 50 percent of foreign earnings.

He noted that the Bank of Tanzania had started to purchase minerals through the refineries but was faced with the challenge of a shortage because the majority of minerals were sold outside the country in raw form.

However, he had formed a committee that came up with a resolution to empower small-scale miners with loans through the BoT Guarantee Scheme, which would increase production and refinery.

The mining equipment brought to small-scale miners includes stone crushers, coal crushers, and briquette plants.

On his part, Tanzania Bankers Association (TBA) Chairman, Mr Theobald Sabi, said the banks were empowering the small-scale miners.

 “TBA will be working closely with Stamico and other stakeholders to build a strong foundation for lending to small-scale miners,” he said. However, he noted that they would first have to identify areas with potential minerals because lack of data is among the biggest challenges why small miners could not be lent.

 Stamico’s managing director, Dr Venance Mwasse, said that the achievements of the corporation are a result of strategies and reforms.

“We have today launched mining equipment that has just been released from the port, worth Sh9.2 billion,” he said, adding that the state entity continues to develop and formalise small-scale miners and simplify their work.

“Three years ago, we were only able to collect Sh1.3 billion from our local sources, but currently we have upped our revenues to Sh68 billion and ended our dependency on the government. We are even issuing dividends and have already paid Sh8 billion to the government,” he said.

Meanwhile, the president of the Federation of Miners Association of Tanzania (Femata), John Bina, called on the government to waive tax on mining equipment.

 He said that a majority of small-scale miners could not renew their licences during Covid-19 because the business was slow and therefore revenues dropped. “We call on you, Madam President, to forgive us and forge forward with new licences,” he said.

He noted that Femata had plans to start its own bank.