Biteko: Tanzania is safe and open for business in the mining sector

The government has made several changes in the mining business from mining operations to mineral buying and selling. All of it is aimed at improving the sector as a whole. Some of the changes covered legal reforms; streamlining the minerals’ market system; review of taxes and levies; safety and security of miners and their property; and putting in place a friendlier revenue collection system in order to create a conducive environment that can attract more investors in mining activities.

In this interview with our Reporter, Noor Shija, the minister for Mining Doto Biteko, talks about how the comprehensive reforms in the mining sector has benefited communities, the mining sector, specifically, and the economy, generally. Excerpts:

 Tanzania is hosting the 4th international mineral and mining investment conference this February. What does meeting mean to Tanzanians?

 We have held these meetings annually for the past two years at the national level. This year the event has been upgraded to an international conference to showcase and woo investment from far and within. The number of participants keep on growing. 

What has been achieved so far from a pledge by the government to open a new chapter in the mining business?

The conference is not a mere talking shop. As a government, we allocate enough time to listen to challenges and then set out to work on them. In fact we have created a secretariat in the ministry that follows up on the issues raised during such meetings to ensure that they are adequately solved, including those requiring amendments of existing laws and regulations. In this year’s conference, we will publish a bulletin on the status of our actions. And the good thing is that we involve the private sector in solving many of these challenges.

 The ministry of Mining recently issued five major mineral licenses to investors at once. What was the significance?

The five licenses would together bring in investments worth $900 million (Sh2.1 trillion) for both large and medium scale mining projects. It proves that our doors are wide open for business. It was a first to issue multiple large mining licenses, thanks to President Samia Suluhu. With the licenses, we should now expect as many employment opportunities and more openings for entrepreneurs. New mining technology will be another accompanying advantage. For example we have issued licenses for graphite where we never had such a venture. So the future is bright and I wish to state that the review of the shareholding agreement between the government and the Williamson Diamonds has resulted in the increase of government shares from 25 per cent to 37 per cent.

  How is mining revenue collection looking like currently?

The Tanzania Revenue Authority has adequate information about tax revenue. I can talk about royalties where we are doing a very good job. For example last year we collected Sh582 billion in royalties. This year we have been given the target of Sh600 billion. But till the end of December 2021, we had already collected Sh311 billion, equivalent to 52 per cent of the target! Last September data from the National Bureau of Statistics indicated that mining was the fastest growing sector after construction. It grew at 12 per cent.

The sector’s contribution to the GDP has also increased from 6.7 per cent last year to 9.7 per cent. With this encouraging trend I am confident we can realize over 10 per cent contribution by 2025.

 How have small scale miners benefited from the ministry of Mining?

Small miners are the biggest beneficiaries of various reforms undertaken by the ministry of Mining. In the past their activities were regarded as illegal. They were called so many names:  “intruders”; “thieves” and many such names.  In the past the contribution of small miners in the official revenue was very small, not more than 4 per cent. And now even their number has increased. We have created markets where they sell their minerals and get a fair deal. In the trading centres there are all necessary facilities and services such as commercial banks, plus law and order to guarantee the safety. Furthermore the government regulates mineral prices to protect miners from low prices from greedy buyers. Prices at the mineral exchange centres at a price that is the same as that of Dubai or London in real-time.

Another benefit is value addition. There are now smelters mushrooming everywhere.

 Recently Tanzania signed an inter national convention against illicit trafficking of minerals. What is the significance?

Smuggling of minerals is a big problem in many countries in Africa. We had the issue of certificates of origin but minerals continued to be smuggled out of the country.

It is important that we start by creating a system internally that will deal with causes of smuggling. The problem has always been that you give people mining licenses but you don’t tell them where they should go to sell their minerals. You give dealers mineral purchasing licenses but you don’t tell them where to go to buy minerals. And also you give processors mineral processing licenses but you don’t show them where to go buy those minerals. Over taxation was another bottleneck as people want more returns for their minerals. Another key issue was integrity of government officials. If officials do not understand the importance of confidentiality in this business miners’ lives are at risk. Once you remove those bottlenecks you will start seeing miners showing interest. That is why we will have the Madini Night Gala where we will award the best taxpayers and emerging miners. 

What is your ministry doing to prepare mining experts in the country

It is true that we do not have enough experts in the mining sector. We have sent some candidates overseas to study. One area we have focused on is in mineral valuation. This is a very crucial area. We have also sent others to study geology and some others to study mining engineering.

We also plan to send some candidates overseas to study mining economics to enable our experts to prepare financial modelling for mining sites. This will make precision mining possible and reduce prospecting and operational costs for investors. As we speak, there are 18 Tanzanians taking various courses abroad. We have some studying inside the country.