Tanzania in mining policy shift as it eyes more benefits

Dar es Salaam. The government said on Tuesday that it will no longer issue mining licences to investors who lack comprehensive plans for value addition of minerals within the country.

The policy shift seeks to ensure that Tanzania benefits more from its mineral resources.

Tanzania is a major producer of minerals such as gold, which is seen as a haven investment around the world.

Strategic and essential minerals such as like lithium, tin, helium, nickel, cobalt, titanium, copper, aluminium, niobium and rare earth elements are also found in Tanzania.

Tabling his docket’s 2024/25 budget proposals in Parliament in Dodoma on Tuesday, Minerals minister Anthony Mavunde said the government is seeking to ensure that Tanzania benefits fully from its mineral resources.

“With immediate effect, we will no longer issue mining licences and special mining licences for medium and large-scale operations involving all minerals, including strategic and essential minerals, to any investor who does not have a comprehensive plan to add value to minerals in our country,” said Mr Mavunde, who asked Parliament to approve Sh232 billion for recurrent and development expenditure for the next financial year.

“The aim is to ensure that our country benefits from the abundant mineral resources we are blessed with.”

The mining sector has been growing swiftly in recent years, with its contribution to GDP increasing to 9.1 percent in 2022, up from 7.3 percent in 2021.

According to Mr Mavunde, mining’s contribution reached 10.9 percent in the first three quarters of 2023 compared to 9.5 percent during the corresponding period in 2022.

The government had set a target of ten percent by 2025, President Samia Suluhu Hassan said in her speech to Parliament in 2021.

Value addition is now a government priority as it seeks to create jobs locally and increase the share of benefits from rising mineral prices in the global market.

“The government is determined to oversee value addition for strategic and essential minerals in the country. To achieve this, the government has set aside a special economic zone, the Buzwagi Special Economic Zone, located in Kahama District, covering 1,333 acres, which were previously engaged in mining activities by Barrick Gold,” Mr Mavunde said.

He added that the area will be used to house industries for adding value to minerals and producing various mining products.

The setting up of the industries is expected to create jobs for Tanzanians and develop their skills, reduce production costs and boost government revenues.

Mr Mavunde said plants to be constructed in the first phase include a multi-metal processing facility and factories that will manufacture mining conveyor belts, among other products.

He added that the Mining ministry will continue to collaborate with owners of gold refining facilities in the country and help them obtain international certification that will make it possible for them to gain international recognition.

Following the announcement that the government will stop issuing mining licences to investors lacking comprehensive plans on value addition, some MPs cautioned that this amounts to restricting the export of unprocessed minerals, which could be counterproductive for the country.

“The problem is that some minerals can be made in laboratories due to technological advancements. If we continue holding on to our minerals, we need to know that the world has alternatives that could render our minerals worthless,” Mr Jumanne Kishimba (Kahama-CCM) said when debating the proposals.

“Let’s be careful so that we don’t find ourselves going back instead of moving forward,” he added.