Mining in Tanzania

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    The land factor in mining gold reserves in Tanzania.
    (The South African Institute of International Affairs (SAIIA), 2011) Lugoe, Furaha
    After three decades (following independence) of being overwhelmed by command-economy policies, in the 1980s Tanzania’s gold mining industry benefited from policy reforms that started with the economic recovery programmes (ERP). These reforms freed in part the major means of production from state ownership. The accompanying paradigm shift allowed ASMs to register claims and retain much-needed foreign currency for rural development long before mining companies started operations. The reforms also translated into rises in gold production, which reached a level of over one million ounces (oz) per year in the new millennium.2 Tanzania has re-entered large-scale gold mining with a bang, with six gold mines opening up since 1998. Production is high and rising, and today the country is the third-largest gold producer on the continent after South Africa and Ghana. In 1995 the adoption of the National Land Policy was followed in 1999 by enactment of the Land Act and Village Land Act. These acts came only a year after a new Minerals Policy and the Mining Act came into force, and all took on board the essentials of the ERP. However, the two frameworks remained separate and contradictory, to the detriment of the relationship between stakeholders.
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    The investment and business environment for gold exploration and mining in Tanzania.
    (Africa Power and Politics Programme & Overseas Development Institute, 2011) Cooksey, Brian
    Tanzania is the third largest gold producer in Africa after South Africa and Ghana. Although large-scale foreign investment is a relatively recent phenomenon, gold exploration and mining have a long history in the country. In the 1890s German prospectors discovered gold in the Lake Victoria area. Significant gold mining began in Tanganyika after the First World War (1914-18), when the British protectorate replaced Deutsch-Ostafrika (1919). Large-scale commercial mining took off in the 1930s only to die out by 1950. Despite low gold prices, small-scale and alluvial mining survived after large-scale mining virtually disappeared, and became an important source of official exports and revenue during the early 1990s. Multinational mining companies came to dominate gold and other mineral production during the late 1990s, in part at the expense of small-scale miners.
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    Tanzania’s gold sector: from reform and expansion to conflict?
    (Foundation for Environmental Security and Sustainability (FESS), 2010) Hall, Aaron
    Over the last decade, Tanzania has become Africa’s third largest producer of gold, behind South Africa and Ghana. In the 1990s, in an effort to transform itself into an economically viable, investor friendly state, the government of Tanzania (GoT) reformed its investment and tax code to attract multinational mining companies vying for mineral extraction rights. These reforms included allowing companies to repatriate 100 percent of profits, pay a royalty rate of only three percent on gold, and owe no duty on imports of mining-related equipment. Unlike any other companies in Tanzania, mineral companies also remain exempt from paying capital gains taxes (Curtis and Lissu 2008). While these actions opened the door for rapid development of the country’s mineral sector, particularly in the gold rich Lake Victoria region, they also created widespread instability and confrontation with artisanal mining communities that were displaced to make way for the operations of multinationals.
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    Tanzania's precious minerals boom: issues in mining and marketing.
    (EAGER, 2001) United States Agency for International Development Bureau for Africa (USAID)
    Since Tanzania began liberalising and privatising the mining sector a decade ago, the substantial economic potential of the industry is more and more apparent. Two key policy decisions set off a mining boom. One was the decision in the late 1980s to end the State Mining Company (STAMICO) monopoly and allow any Tanzanian to register a claim and sell minerals. The second was the liberalisation of currency controls, beginning with permission to exporters to use their export proceeds and culminating in the floating of the currency in 1994. This doubled the benefits of mining, as the foreign exchange proceeds could be used to finance imported consumer goods, equipment and spare parts, which had long been scarce. These all set off an immediate artisanal mining boom. The purpose of this study is to provide an understanding of artisanal marketing patterns, their logic and their economic impact. This study has come at a time of sweeping changes in Tanzania’s mining sector, and in the larger national economy. Tanzanian policy-makers face a unique opportunity in the swelling mining boom. They also have to prepare for its inevitable subsequent decline. The liberalization of mining has brought poverty alleviation to rural areas in the 1990s on a scale far surpassing the impact of donor-funded job-creation efforts. Working with that trend, future donor-funded efforts can multiply their impact. On the other hand, if this sudden growth is neglected or misunderstood, the benefits of sudden growth in mining could be transitory. The impact could be negative if future inflation and other economic distortions are not controlled, if arms or drug dealers, or money launderers infiltrate the trade, or if greed, corruption or ethnic tensions are allowed to build around resource riches. None of these negative situations is currently an imminent trend in Tanzania, but all have occurred in other mineral-rich countries.
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    Tanzania’s mining sector and Its Implications for the country’s development.
    (HTW-Berlin, 2011) Magai, Petro S.; Márquez-Velázquez, Alejandro
    This paper analyses the factors that reduce the mineral sector’s contribution to the Tanzanian government’s revenue. This sector accounts for nearly half of the country’s exports and places it among Africa’s largest exporters. Yet, ordinary Tanzanians have seen little benefit from their country’s exports boom. This is partly because the government has enacted tax laws that are, as we shall see, overly favorable to multinational mining companies, and partially due to the business practices of the companies themselves. The situation is further exacerbated by these companies avoiding taxes altogether by claiming losses. Nonetheless, they continue to invest in operations. Critics argue that the government fails to capture a substantial amount of state revenue as a result of low royalty rates, unpaid corporate taxes and tax evasion major gold mine operators. This paper argues that the Tanzanian government should increase its involvement in the mining industry by entering into joint ventures with mining companies, or by increasing its shares in them. Its involvement will result in an increase in tax and royalties collection.
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    Report on the Lunguya mineral exploration property of Tanzanian royalty exploration corporation in the Kahama district, Shinyanga region of the united republic of Tanzania, East Africa.
    (Tanzanian Royalty Exploration Corporation, 2010) Geo, Martin Taylor, P.
    Tanzanian Royalty is a publicly-traded financial gold company whose business strategy is to acquire royalty interests in gold production from its core assets in the Lake Victoria Goldfields of Tanzania. As of December 31, 2008, the company had 88,793,958 common shares issued and outstanding. Tanzanian Royalty’s head office is in South Surrey, British Columbia, Canada and it trades on the TSX Exchange under the symbol TNX and on the AMEX as TRE. The company operates in Tanzania through two wholly-owned, Tanzanian-registered companies, TANCAN Mining Company Ltd. and Tanzam 2000 Ltd. The Lunguya Project is at an early exploration stage and, as of October 31, 2009, consisted of 11 granted Prospecting Licences plus 6 approved applications covering a total area of approximately 428.79 km². The property is located in the Lake Victoria Goldfields area within one of the principal Archaean greenstone belts of Tanzania and lies 15-30 km south of Barrick Gold Corp’s. Bulyanhulu Mine. The Lunguya Project includes northwest-trending magnetic lineaments and shear sets that are parallel to those hosting Bulyanhulu. Areas of current or historic artisanal workings contain surface quartz rubble zones, exploited by the artisanal miners.
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    Mining in Tanzania – What future can we expect? The challenge of mineral wealth: using resource endowments to foster sustainable development.
    (International Council on Mining and Metals (ICMM), 2009) Roe, Alan; Essex, Mark
    This paper is the latest in a series on mining and its social and economic impacts that have been prepared under the auspices of the Resource Endowments initiative (REi) of the International Council of Mining and Metals (ICMM). It provides an objective basis to help the Tanzanian government to examine the debate between (1) the need to encourage the mining sector as a dynamic contributor to economic growth and (2) the alleged failure of the mining sector to contribute sufficient revenue to the public purse and to make an appropriately large socioeconomic contribution to local communities. In doing so, it represents an input into government decision-making regarding the Bomani Committee Report and other recent suggestions for reforming the sector.
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    Mining to speed up economic growth in Tanzania
    (THE CITIZEN, 2013) Kasumuni, Ludger
    The contribution of the mining sector to Tanzania’s economy is set to increase tremendously in the next five years as several new major mines go into production, Tanzania Chamber of Minerals and Energy (TCEM) predicts. Currently, the sector contributes an estimated 3.5 per cent to Tanzania’s gross domestic product. Statistics from the TCME report shows that between 1997 and 2011 a total of $10.1billion (Sh16 trillion) worth of minerals were sold by the chamber’s 60 members.
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    The mining industry and the future development of Tanzania
    One would be inclined to think that the possession of significant natural resource reserves is a blessing. This would especially be so for developing countries; it provides them with the necessary foreign currency and potentially increases savings, making natural resources the key to economic growth. But the reality seems different. Researchers have been discovering a very robust negative relationship between different measures of development and different measures of resource endowments. Only recently, this negative relationship has been questioned. It is argued that the relationship between growth and natural resources is a complex one, and the significant negative relationship is attributed to the use of weak data. Tanzania has a considerable stock of natural resources. Given the liberalisation efforts of the government started in 1986 and the economic globalisation, these natural reserves are likely to be exploited in the near future. The government is heavily encouraging private investment in the sector, and the first signs of an upcoming boom are there. Bearing in mind the above facts, one might ask whether Tanzanians should be happy or be afraid.
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    Mining Cadastre in Tanzania
    (FIG Working Week, 2003) Hernandez, André
    Tanzania is following modern worldwide trends to reform their Mining Act and set up a Mining Cadastre. The theory describes the Mining Cadastre as a cadastral system defining objects, subjects and rights, but overlapping other surface rights like private or state properties, reserves, farms and villages. The cadastre is then defined as a superposition of rights with interrelated rules concerning overlapping, right of construction, right of use and compensation. The Tanzania experience shows that the coordination with the National Cadastre and the Registrar is necessary to solve conflicts with possessors or holders of other rights. Localization of rights, implementing bacons on the field or solving underground disputes are new tasks for surveyors. And legal background is necessary for surveyors to negotiate with miners, villagers, local authorities and large mining industries.
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    Mining and exploration handbook Tanzania
    (Tanzania Extractive Industries Transparency Initiative (TEITI), 2012) Alfred, Agaba Julius; Aisu, Delilah
    Tanzania joined the Extractive Industries Transparency Initiative EITI in February 2009, following a recommendation as part of the 2007 Mineral Sector Review Study. A multi-Stakeholder Working Group (MSG) was established to lead the implementation of the EITI in Tanzania and comprised of representatives from civil society organizations, extractive companies and Government. The overall objectives of the EITI reconciliation exercise are; to aid the Government of Tanzania in identifying the positive contribution that mineral resources are making to economic and social development of the country and to realize their potential through improved resources governance that encompasses and fully implements the principles and criteria of the Extractive Industries Transparency Initiative EITI.
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    Mineral extraction for socio-economic transformation of Tanzania: the need to move from papers to implementation of mining policy and law
    (Macrothink Institute, 2015) Poncian, Japhace
    Tanzania is endowed with vast quantities and types of resources whose extraction has been central to the country’s economic growth. However, the challenge has been translating growth in extraction activities into inclusive and sustainable socio-economic development and transformation. Instead of being of benefit to all, mineral resource extraction has only served to put Tanzania into the map of foreign capital flows but with limited benefits to the local citizens. Drawing on academic literature, government policy and legal documents as well as other secondary materials, this paper examines challenges of translating resource extraction into inclusive and sustainable socio-economic development in Tanzania. It focuses on large scale gold mining and local content provisions. The paper argues that having in place a good policy and legal framework is nothing if it is not implemented to the benefit of local communities and the entire nation. There is, therefore, a need to move from papers to implementation if mineral resource extraction is to be of any significance to socio-economic transformation. This is very significant especially now that Tanzania has a new mining sector legal and policy framework in place and is looking forward to making the most out of its recently discovered natural gas.
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    Land tenure and mining in Tanzania
    (Chr. Michelsen Institute, 2008) Lange, Siri
    Tanzania is a relatively new mining country. This study argues that unclear land and mining rights, and conceptual differences in how land and mining rights are perceived, contribute to considerate conflict in the country and to a feeling among both local people and human rights advocacy groups that the government has betrayed ordinary people.1 The main challenge with the current legislations is that there was little or no coordination between the lawmakers at the time when the land and mining laws were drafted in the late 1990s. The Village Land Act goes far in providing ordinary people with customary rights to land – but since there has been no surveying or registration, these rights are fluent and unclear. Moreover, since all land is under the president/state, people don’t own land, but have use rights. In cases where the government needs the land for “development purposes” like mining, the law allows the government to order people to move. According to the law, occupants of the land will be paid compensation for the investment/work that they have done on the land, but not for the land itself.
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    Gold mining investment incentives in Tanzania: current issues and the possible remedies.
    (Dalian University of Technology, 2010) Lu, Yuduo; Marco, Kung’unde G.
    In recent years Tanzania has seen a rapid growth of its gold mining sector, the trend which has made the country the third largest gold producer in Africa. This growth is attributed much to the favorable investment climate created by the government for Multinational mining companies through the provision of various tax incentives and the ongoing discovery of new mining locations. Although tax incentives are attributed much for the promising trend of the mining sector, but, there is a controversy linking the granted incentives and the actual benefits the country realizes. The provided tax incentives seem to be way too generous causing the country to lose substantial amount of much-needed tax revenues. The practices of the incoming mining companies and local tax authorities are largely blamed for the ongoing trend.
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    North Mara na Maendeleo: Uwezeshaji wa maendeleo endelevu
    (ACACIA, 2014) ACACIA
    Lengo la chapisho hili ni kukupa taarifa kuhusu miradi ya maendeleo ya jamii ambayo imetekelezwa kwa ufadhili wa Mgodi wa North Mara kati ya mwaka 2011 na 2014. Tumetengeneza mfumo ambao sio tu utafanya kampuni kuonekana bali pia ushirikishwaji wa wadau. Ni matumaini yetu kuwa baadhi ya habari zilizomo katika jarida hili zitasaidia kuondoa dhana zilizopo kuwa mgodi haujafanya vyakutosha kusaidia maendeleo ya jamii. Kwa miradi ambayo mgodi umetekeleza katika jamii inayouzunguka hakuna shaka kuwa tumewekeza sana katika miradi mbalimbali kama vile afya, elimu, maendeleo ya miundombinu na miradi endelevu ya kiuchumi.
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    Ubendian mineralisation in the Lupa Goldfields, south-western Tanzania: new discoveries and geochronology
    (2009) MacKenzie, Chris; Moore, John; Selby, David
    The Lupa Goldfield of south-western Tanzania produced over 23 tonnes of gold during colonial times, and an unrecorded amount since independence. The New Saza Mine was the second largest pre-Independence gold producer in the country after the Geita Mine. Despite that, and unlike the Archaean granite-greenstone terrain of the Lake Victoria Goldfields, the Lupa Goldfield has not received significant modern exploration. This is mainly due to a perception that high-T metamorphism during the Ubendian Orogeny meant the Lupa Goldfield was only prospective for narrow, high-grade gold vein mineralisation (e.g. see de Klerk, 2001). However recent exploration by Helio indicates this perception is false. Re-evaluation of the timing and genetic relationships of the gold mineralisation in the area indicates that good potential does exist in the Lupa Goldfield for a world-class gold deposit.
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    Tanzania Minerals Audit Agency: Annual report 2013
    (The United Republic of Tanzania Ministry of Energy and Minerals, 2013) Tanzania Minerals Audit Agency (TMAA)
    This report covers results of auditing activities performed by Tanzania Minerals Audit Agency (TMAA) in the year 2013. It also addresses status of implementation of the audit program and highlights key findings and achievements. The task of auditing quantity and quality of mineral products from the major mines was comprehensively undertaken by TMAA in 2013. Gold output (from gold bars and Copper Concentrate products) by the major gold mines in 2013 was the same as the previous year at 1.25 million troy ounces. Geita Gold Mine (GGM) was the leading gold producer in 2013 with 37% of total production.
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    Responsible mining Report 2012: case study Sungu-Sungu clinic
    (African Barrick Gold, 2012) African Barrick Gold
    North Mara is located in a remote part of Tanzania and as such infrastructure in the region is limited. In line with our commitment to community development, throughout the year we have continued to invest in upgrading local infrastructure to help improve transportation links and access to water, education and healthcare. One of our core community infrastructure projects is the rehabilitation of the Sungu-Sungu Clinic in Nyamongo, one of the villages located in the vicinity of the North Mara mine. The clinic is the sole source of local medical care outside of the mine for those living in the mine’s seven local communities. Unfortunately, the clinic is not currently eligible for central government funding due to its size, so ABG’s support is critical. As the first phase of the upgrade, ABG has invested approximately US$350,000 in the clinic in order to refurbish maternity and paediatric wards, laundry facilities and basic amenities and to construct an outpatient block and further wards. In addition to this, we are improving access to power and water by installing additional water wells and a connection to the national electricity grid. For the time being, we have installed a diesel generator and we are trucking clean water from the mine to the clinic to provide for key utilities while we complete these elements of the project.