Under nine new regulations, which the mining ministry passed this year, Tanzania will now make it compulsory for foreign-owned mining groups to offer shares to the government and local companies.
Furthermore, the new regulations will restrict the way in which foreign-owned banks, insurance companies and law firms conduct business with mining firms.
According to the Mining (Local Content) Regulations of 2018 regulation, a contractor, sub-contractor, licensee (mining company) or other allied entity shall maintain a bank account with an indigenous Tanzanian bank and transact business through banks in the country.
The local content regulation imposes a fine of at least $5 million for mining companies that fail to implement the new requirements. In terms of the amendments, the mineral right holder is required to submit to the Commission a procurement plan of five years indicating the local services which will be used.
Among the notable features of the Mineral Rights Regulations is the requirement of giving an indigenous Tanzanian company first preference in the granting of mining licenses. Furthermore, Tanzanian President John Magufuli has appointed a chairperson and commissioners for the country’s new mining commission, Idris Kikula.
The appointment of the mining commission and new regulations published this year mean the country can now resume issuing new mining licenses to investors. The commission has started a process of issuing some 7 000 mineral licences that had been pending after the Tanzanian government placed a ban on new licenses in July last year.
Under legislation passed in July last year, the mining commission has been given extensive powers to regulate and monitor the mining industry and mining operations in Tanzania.
AIE will host the Tanzania Mining Law, Local Content Policy & Tax Regime event on 26 & 27 July in Dar Es Salaam. The briefing will provide insight into the new mining regulations and orders of Tanzania and will also offer 2 interactive workshops on the Tanzania Fiscal Regime and Local Content Policy.