What cement stakeholders want in Finance Bill 2024

DODOMA: CEMENT stakeholders are asking to be exempted from Mining Act (Cap 123) with Regulation 2022 GN No. 574 of 2022, which requires a free interest of 16 per cent in the shareholding of the cement, fertiliser salt and manufacturing companies.

Engineer Benedict Lema, who represented the stakeholders, at public hearing of the Finance Bill 2024 on Sunday at Pius Msekwa Hall in Parliament, said unlike other mineral right holders and licenced dealers who export minerals, they have acquired sites for mining raw materials such as limestone and pozzolana used in cement production.

He said due to the regulation, cement manufacturers could not renew licences for mining sites, which causes unnecessary uncertainties to investors.

“For instance, Tanga Cement has acquired mining site in Holili area in Rombo District for pozzolana, but we could not renew its licence since 2022 because of the requirement. This brings unnecessary uncertainty to investors,” said Eng Lema who represents cement subsector in the Confederation of Tanzania Industries.

“We have another mining site for limestone in Tanga whose licence has expired. When we apply for renewal the 16 per cent free carrying interest is not fulfilled and that is why the licence was not issued since in 2021.”

He said they are asking to be exempted in the amendments to Mining Act and regulations because the proposed amendments to the Mining Act did not clarify how their problem is going to be addressed.

“It is unfair to be treated like others who export their minerals. Ours are used locally in cement processing,” he said.

According to proposed amendments to the section 59 of the Mining Act Cap 123 a mineral right holder or a licensed dealer to set aside minerals for processing, smelting, refining and trading in Tanzania at the percentage as the Minister may, by regulations, determine.

The Chief Executive Officer of Dangote Cement Company in Tanzania, Abdullahi Baba asked the government to rescind plans to extend fuel levy to Compressed Natural Gas (CNG) used in motor vehicles, because it would make CNG expensive and discourage people from converting their vehicles to run on gas.

He said the proposed extension of fuel levy to CNG would affect negatively Dangote Cement Company in Tanzania that has invested heavily in converting their trucks to run on gas. Dangote had invested on CNG use for their trucks to lower transport costs since their cement has to be ferried 600 kilometres from Mtwara to Dar es Salaam, the largest market.

“Our request is plans for extension of fuel levy to CNG used for motor vehicles should not go,” he said.

He said the proposed fuel levy extension would also be going against clean energy promotion campaign championed by President Samia Suluhu Hassan.

He said the government needs to ban clinker imports to protect local factories that have excessive capacity to produce the materials.

He said Tanzania would benefit more including saving her foreign resources when clinker is produced locally.

He also proposed for removal of excise duty of 20,000/- per tonne of cement to lower production cost of the materials which is transferred to the end users.

“We pay the excise duty but the cost is transferred to the customers. Cement is essential commodity that is why we ask excise duty to be removed. If it will be removed cement prices will ease,” he said.

Former Industry and Trade Minister, Charles Kaijage, said the government should reconsider plans to extend fuel levy to CNG used in motor vehicles and instead it should nurture the subsector to grow.

He said what attracts people to convert their motor vehicles to run on the gas was the price difference with petrol or diesel.

“The government should wait for the sector to grow so that it can harvest more,” said Mr Kaijage, who introduced himself as natural gas stakeholder.

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