NEW MINING BILL PASSED

Parliament passed the new Mining Bill following heated debate in the National Assembly in April. Prime Minister Mizengo Pinda, Attorney General, Frederick Werema, and Minister for Energy and Minerals William Ngeleja, had to hear hours of critical contributions by MP’s. The Citizen reported that CHADEMA MP Zitto Kabwe, Speaker Samuel Sitta, newly nominated Zanzibar CUF MP Ismail Jussa, and Bumbuli CCM MP William Shelukindo were among those who kept the front bench on its toes, constantly seeking clarification on issues.

The MPs took issue with the inadequate compensation paid to villagers whose land is acquired for mining and also called for more transparency in operations in the industry. Some 84 MPs contributed to the Bill which became the most debated Bill during the 19th parliamentary session.

The Bill provides for:
– the setting up of a new Mining Authority
– the government to effectively manage and supervise the sector
– five year reviews of mining contracts
– setting aside specific areas for small-scale miners to avert conflicts between artisanal miners and big mining companies.
– gemstones to be processed locally; foreigners wishing to mine gemstones will be required to enter into joint ventures with locals.

The Africa Report (No 23 of 23.06.10) commented that this Bill marked an attempt to increase government revenue and ease fierce public hostility towards foreign mining companies. New investors in Tanzania’s mining sector will now be charged 4% rather than 3% royalties for precious and base metals (gross rather than net); they will have to list on the Dar es Salaam Stock Exchange; and, the government will have a stake in any new mining project. Gemstone companies will have to be at least 50% Tanzanian.

The proposed changes are expected to raise mining revenue from $57m in 2009 to $110m in 2010.

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