Regulation of private foreign investment in the mining sector: the case of Tanzania Mainland

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
University of Dar es Salaam
Tanzania is endowed with abundant mineral resources (SEE table 1.1). Over years these mineral resources have been exploited by both local and foreign investors. Large scale mining has largely been carried out by foreign investors mainly from South Africa, Canada and Australia. The need for technology and lack of capital by local investors forced Tanzania to open its doors for foreign investors to flood the mining sector. This explains why the mining sector is a leading sector in attracting foreign investment. (SEE table 1.2)’ This dissertation examines the regulation of private foreign investment in the mining sector. The main issue is the cause of poor regulation of private foreign investment in mining sector. The overall argument is that despite the efforts of the government to review all mining contracts and to establish in 2007 a Bomani commission which has studied the Tanzania mining sector and come up with come critical recommendations. There is legal and policy weaknesses which led to poor regulation of the mining sector. This dissertation shows that despite such glaring facts it is the International Financial Institutions which are behind the enactment of almost all Mining Legislations under the guise of saving the economies of Tanzania; i.e. Structural Adjustment. In reality it is the capitalist countries which needed Tanzania’s mineral resources which could not be reached without external forced to change the laws and policies which used to shelter the same. In the final analysis, the study reveals that review of the mining contracts and lessons learnt from other mineral producing countries; as was done by the Bomani Commission, do not remedy the situation but it temporarily suspends the problem. The only solution is to amend some of the laws; repeal and replace some of laws which have been overtaken by events, try as much as possible to harmonize all the mining legislations; and to have a clear mineral sector policy which balances the interests of the investors, the nation as a whole and the public at large. Table 1.1 Mineral Resources of Tanzania and their Quantity MINERAL QUANTITY Gold 2,222 tones Nickel 209 million tones Lead 13.65 million tones Iron Ore 103 million tones Diamond 50.9 carats million Tanzanite 12.6 tones Limestone 313 million tones Soda Ash 109 million tones Gypsum 3.0 million tones Phosphate 577.04 million tones Coal 911.0 million tones Source: Geological Survey of Tanzania, 2007. Table 1.2: Ten leading sectors for Investment 1995-2004 SECTOR VOLUME OF ATTRACTION Service 2% Transportation 2% Tourism 5% Agriculture 5% Natural) resources (minerals excluded 5% Financial Institutions 5% Telecommunications 17% construction 17% Manufacturing 19% Mining 23% Source: TIC 2005
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class Mark (THS EAF KRD.M825)
Mining law, Foreign investment, Law and legislation
Mugyabuso, E (2009) Regulation of private foreign investment in the mining sector: the case of Tanzania Mainland, Master dissertation, University of Dar es Salaam