How mining regulatory reforms translate in great strides

THE evolving growth recorded by the Tanzania Mining Sector within its 62 years of Independence is largely owed to swift regulatory reforms and among other.

The government has been taking radical measures that have plugged loopholes, which led to exploitation of mineral resources by unscrupulous people and illicit financial flows within the sector. Tanzania hosts vast mineral resources, which includes metallic ones, such as gold, iron, nickel, copper, rare earth elements, niobium, lithium, cobalt, lead, and platinum group metals.

There are gemstones, tanzanite, ruby, sapphire, spinel, amethyst, rhodolite and tsavorite. Moreover, industrial minerals consist of phosphates, limestone, gypsum, dolomite, graphite, iron ore, kaolin, bauxite and many dimension stones, such as granites and marbles. Reports indicate that mining is among the leading economic sectors in the country, making up about 50 per cent of the country’s total exports.

The achievements recorded so far by the country are attributed to the reforms made by the government, helping to constantly strengthen the sector’s contribution to the Gross Domestic Product (GDP) of the country. During the 2022 International Mineral and Mining Investment Conference, President Samia Suluhu Hassan expressed determination to ensure the country benefits from its mineral endowments and create an enabling environment for investors to strike better shares in the mining sector.

In Dr Samia’s address delivered by Vice President, Dr Philip Mpango before the annual mining gathering the ambition to revolutionize the mining sector in increasing its contribution to the GDP by 10 per cent come the year 2025 was made vivid. That’s why in 2017, the government reviewed the Mining Act of 2010 to enhance the sector’s contribution as well as the create beneficial ownership of mineral resources.

The amendments included enhancing state participation, considering local content in the mining economy’s value chain, and ensuring that most of the mineral beneficiation and value addition activities are conducted within the country.

“These changes significantly revolutionized the Mining Sector in the country,” said Dr Mpango, adding: “Our five-year development plan has targeted an increase of the contribution of the mining sector to the GDP to reach 10 per cent by 2025 compared to 6.7 per cent in 2021.”

On the other hand, the Mineral Policy of 2009 emphasizes creation of a conducive environment for the development of mining business. This is supported by flexible and predictable legislations, reliable infrastructures and access to financial services. Since 2017, the ministry responsible for minerals worked tirelessly promoting the sector and provided awareness on available opportunities in the mining industry.

This has attracted integration of the sector with other sectors of the economy and successfully raised attraction and enabled the flow of capital from the financial institutions to various mining projects. Deputy Prime Minister, Dr Doto Biteko, when speaking to the media prior to the 2023 Tanzania Mineral and Investment Forum, noted a significant improvement to the small-scale sub sector, now becoming vibrant. “Compared to previous performance of this subsector, we have noted the substantial contribution of the small-scale mining projects.

Currently, they are contributing about 40 per cent of the revenue from the mining businesses,” said Dr Biteko who previously served as Minister for Minerals. According to him, the sector was bolstered by good collaboration between foreign investors who provide technical support to small scale miners as required by the Mining Act.

Similarly, the Mining Act 2010 Cap. 123 provides a wide scope of conducting mining and allows interaction of the global population to invest in exploration, mining, mineral beneficiation and value addition, trading, and services in the mines. This set-up has attracted foreign capital and investment to the country. The deputy prime minister revealed that the notable historical evolution of the mineral sector in Tanzania started in the 1990s.

Since then, the sector embraced and promoted involvement of the private sector in developing numerous projects that created employment opportunities, income, technology and skills. With this regard, the stories regarding the success of the Mining Sector in Tanzania cannot be told well without noting the significant contribution of the private sector. He, equally, pointed out that the implementation of local content in the mining sector was progressing well.

Over the years, Tanzania has witnessed local people participating in providing services and supplying goods to the mines at the required standards. This is a valuable achievement that the country must be proud of. Furthermore, efforts by President Samia have resulted in attracting more investors in the mining sector, whereby currently the world has witnessed signing of 11 Framework Agreements by the Government of Tanzania with multinational mining companies from different countries in the world.

About 16 per cent of the country has been covered with high resolution geophysical data. In fact, this provides more detailed information on the structures that are potential for mineralization and the areas that investors can establish exploration targets.

By recognizing the importance of high-resolution data, the government has prioritized high resolution activities for the remaining unmapped areas. The plan is to cover the whole country by high resolution mapping with priority to discover potential critical minerals.

On several occasions, the Minister for Minerals, Mr Anthony Mavunde, reiterated government’s commitment to access geological information, which attracts investments in intensive mineral exploration. “Tanzania is blessed with large mineral deposits, whose development is critical in economy of the country’s growth,” said Mr Mavunde.

In implementing its plan of securing reliable information, the ministry has come up with its Vision 2030 known as ‘Madini ni Maisha na Utajiri’, literally translated as minerals are a way to life and wealth.

Mr Mavunde noted that the current status of geoscientific information in Tanzania indicates that 97 per cent of the country has been geologically surveyed at a scale of 1:125 000 and 1: 100 000 cumulatively, and the high-resolution airborne geophysical survey performed by GST through development partners accounts for 16 per cent, while geochemistry mapping has been done by 24 per cent.

He said the limited data on high geophysical survey can lead to insufficient planning on exploitation of mineral resources or on the flipside to hinder more investment in the sector, resulting in low revenue performance and limited capacity for different types of minerals.

To unlock these, intensive and systemic explorations have to be undertaken across the country. With these approaches, a large part of the country will be mapped by high resolution airborne geophysical surveys in order to identify targets for further detailed exploration.

The minister noted that using the targets in detailed exploration, will allow for higher flexibility in response to various challenges in other sectors of the economy, such as agriculture, when linking mining to the other sectors. He said implementation of this vision will lead to new discoveries of other mineral deposits for potential mining investment, which would ultimately contribute to GDP growth and ensure sustainability of mining business in Tanzania.

The ministry has prepared a roadmap for conducting High Resolution Airborne Geophysical Survey and identified six priority areas.

Among them is mapping some blocks of potential critical minerals. In general, implementation of the Vision 2030 will enable planning and use of proper technology for detailed mineral exploration and promote innovation.

Geophysical data collected through high resolution geophysical surveys when integrated with geological and geochemical data will help to reduce time used in exploration by investors. Hence, this will help in the establishment of new mines within a short period of time for potential mineral resources identified.

In addition, the mineral sector will be in a good position to plan sustainable extraction and development of the entire mineral value and supply chains.

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