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Tanzania to Set Up Mineral Processing Plant

Published on Thursday 29th April 2010 Tanzania to Set Up Mineral Processing Plant

WITH the passing of the Mining Act 2010 by the Parliament last week, local mineral processing plant will be set up as the government had finally set its sights on retaining a certain percentage of all minerals in the country for processing before export.

This follows a legally binding arrangement that will be brought forth by the Act which requires all mining companies to set aside certain amount of minerals for processing, smelting or refining within the country.

To be assented by the President, the Act empowers the ministry for energy and minerals to determine a percentage any authorized miner's catch to remain within the borders to process, smelt or refine before selling off.

While some commentators have argued that this new development calls for heavier investments in processing infrastructure, the Act says that both the government and private investors may have to be involved in the process to put dependable mechanism for local processing.

It indicates that all those with plans to process from within the country will have to apply for a licence for processing the minerals, valid for only 5 years but subject to renewal.

On royalty, failure to pay them shall, after ninety days from the date upon which the amount becomes due subject the individual and corporate company to a penalty-of 25 per cent of the amount and 50 per cent, respectively.

The Act also notes that failure to disclose official receipts for payments in lieu of royalty, evidence of a turnover of not less than 50 per cent of the minimum turnover required will lead to disqualification from obtaining a renewal of a licence.

Authorised miners shall pay to the government a royalty on the gross value of minerals produced under their licence at the rate of five per cent for uranium, gemstone and diamond.

It would be 4 per cent for metallic minerals as copper, gold, silver, and platinum group minerals while it will be one per cent for gem and 3 per cent for other minerals, including building materials, salt, all minerals within the industrial minerals group.

However, samples of minerals acquired for the purposes of assay, analysis or other technical examination shall be exempt from royalty payment if the market value of such samples of minerals is not more than 50,000/-.

Prohibition of export or import is put on any radioactive mineral except in accordance with the terms and conditions as stipulated under the Atomic Energy Act.

The minister shall, in consultation with holders of special mining licence, make regulations prescribing the minimum shareholding requirement and procedure for selling shares to the government and, in accordance with the provisions of the Capital Market and Securities Act, offering shares to the public through listing with the stock exchange.

The reasons the government gives for passing the Act are based on the experiences and challenges gained during twelve years of the implementation of the Mining Act Cap 123 that was enacted in the year 1998.

Among the previous challenges the government mentions are a low integration of the mineral sector with other sector of the economy, low contribution to the Gross Domestic Product (GDP) compared to the sector growth and low capacity of the government to administer the sector.

The Commissioner or an authorised officer is also provided for to access a mining area to inspect and examine prospecting or mining operations or treatment of minerals being performed and ascertain whether or not the provisions of the Act or the Regulations are being complied with.

The Act, which does not apply to exploration for or production of petroleum, repealed Mining Act, Cap. 123 but retained some issues directed under the 1998 mining law.

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