Mining is a complex and highly regulated business, especially when operating in a foreign country. In addition to knowledge about mineral reserves, it is important to clearly understand the applicable legal, regulatory and business framework of the host country.
Lex Africa’s Guide to Mining Regimes in Africa is an informative and useful introduction to the mining industry in 17 African countries. Focusing on the legal framework for the mining and oil and gas industries, Mining News features some of the countries which appear in the guide.
Tanzania is home to various minerals such as gold, iron ore, nickel, copper, and cobalt. The East African country is gifted with abundant gold reserves. As such, most of the mines in Tanzania are gold producers.
The principal legislation regulating mining in Tanzania is the Mining Act, No. 15 of 2010 (Mining Act) as amended by the Written Laws (Miscellaneous Amendments) Act, No. 7 of 2017 as well as several regulations made under the act concerning mineral rights, environmental protection, mineral beneficiation, safety and occupational health, mineral trading and mining of radioactive material. The most important regulations include the Mining (Mererani Controlled Area) Regulations; Mining (Mineral Beneficiation) Regulations; Mining (Diamond Trading) Regulations; Mining (Minerals and Mineral Concentrates Trading) (Amendment) Regulations; Mining (Local Content) Regulations; Mining Minimum Shareholding and Public Offer Regulations; Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations; Mining (Safety, Occupational Health and Environment Protection) Regulations; and Mining (Environmental Protection for Small Scale Mining) Regulations.
Other fiscal and sectoral laws that touch the mining industry include Tanzania Extractive Industries Act; Environmental Management Act; Land Act; Village Land Act; Natural Wealth and Resources (Permanent Sovereign) Act; Occupational Safety and Health Act; Companies Act; Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act; East African Customs
Management Act; Public Private Partnership Act; Investment Act; Income Tax Act; Foreign Exchange Act; and Value Added Tax Act.
The Ministry of Minerals is responsible for administering the mining industry. The portfolio minister monitors all establishments and prepares policies, strategies, and legislative framework for exploration and exploitation of mineral resources as well as monitoring the implementation of laid down government policies on minerals. The chief officer relating to mining regulation is the Chairman of the Mining Commission who is assisted by eight Commissioners (all presidential appointees). The Mining Commission, which operates through Mining Cadastres and Committees, among other functions, it regulates, and monitors the mining industry and mining operations, advise the government on all matters relating to the administration of the mineral sector. It considers relevant applications, process, grant, revoke or suspend mining licences and permits. Further, it is mandated to curb mineral smuggling, auditing, and maximise government revenue. The role of the Commissioner for minerals (a presidential appointee but not a member of the Mining Commission) is now reduced to that of advising the minister responsible for minerals. Other institutions involved in the mining sector include the President of Tanzania, National Assembly, Attorney General, Cabinet, Minister of Constitutional Affairs, judiciary, Mines Resident Officers, Geological Survey of Tanzania, and Mineral and Gem Houses.
Rights for conducting reconnaissance, exploration, and mining operations
The Mining Act does not contain a provision for a right to conduct reconnaissance. A Prospecting Licence is required to conduct exploration. However, exploration activities may also be undertaken under the various mining licences in addition to mining operations.
The law introduces several types of licence, which include Special Mining Licence (SML), Mining Licence (ML), Gemstone Mining Licence (GML), Primary Mining Licence (PML).
SMLs are issued in respect of large-scale mining operations whose capital is not less than $100 000 000 while a ML is one relating to medium scale mining operations whose capital investment is between $100 000 and $100 000 000. GMLs are reserved for Tanzanian citizens except in the case of joint ventures where 50% of the joint venture interest is controlled by a Tanzanian and PMLs are also restricted to Tanzanian citizens only.
Oil and gas
The principal legislation regulating the exploration and production of the oil and gas sector in Tanzania is the Petroleum Act, 2015 (Act). This act provides for regulations of upstream, midstream, and downstream petroleum activities. The act is also supplemented by the Oil and Gas Revenues Management Act; Energy and Water Utilities Regulatory Authority Act; Tanzania Extractive Industries (Transparency and Accountability) Regulations; Public Corporations Act; Public Procurement Act; Public Procurement Regulations; Petroleum (Natural Gas Pricing) Regulations; Petroleum (Local Content) Regulations; and Public Private Partnership Regulations.
The laws mentioned under the mining section above concerning environment protection, investment, tax, PPP, custom management, health and safety, natural wealth, renegotiation of terms, and land also apply to the oil and gas sector. The Ministry of Energy implements its petroleum exploration and development policies through the Tanzania Petroleum Development Corporation (TPDC). As such, the act grants TPDC, which is designated under the law as the National Oil Company of Tanzania, an exclusive right regarding exploration and development licences. Such licences are not transferrable. A private-sector party may be able to apply for and enjoy these rights through the following process: The first one is a partnership
with the TPDC or production sharing agreement (PSA). The TPDC may, subject to the Minister’s consent and on the advice of Petroleum Upstream Regulatory Authority (PURA), enter into a partnership with a Tanzanian or a foreign entity through an open tendering process or direct award of a block. When private sector participants partner with the TPDC, the TPDC must retain at least a 25% interest in any joint venture vehicle.
The second potential procurement process appears to be related to the entry into Petroleum agreements. Petroleum agreements shall not be entered unless a transparent and competitive public tendering process is completed. The Minister shall cause to be published in a newspaper of wide circulation, the invitation of tender, or the intention to initiate direct negotiations. Where all or part of the area tendered in a competitive public tender process for an award of an agreement has not become effective, and it is for the public interest, the Minister may, upon the advice of PURA and approval of the Cabinet, initiate direct negotiations with a qualified and eligible company.
Also, the act requires a person who intends to carry out reconnaissance surveys to apply for a reconnaissance permit from PURA.
Compiled by Alyshah Bharwani.