PROSPECTS ABOUND

Tanzania 2014 | INDUSTRY & MINING | INTERVIEW

TBY talks to A.B. Samaje, Acting Commissioner for Minerals of the Tanzania Mining Commission, on the valuable minerals that the country is producing and the new regulatory environment in the mining sector.

A.B. Samaje
BIOGRAPHY
A.B. Samaje is Acting Commissioner for Minerals of the Tanzania Mining Commission.

How can Tanzania's mineral wealth generate maximum benefits for the country?

We amended the 1997 mineral policy in 2009 to ensure a thriving mining sector. The new Mining Act of 2010 prioritized national benefit from mining activities. The 1997 policy, had not made provision for much government involvement, and we decided that this had to change to allow for government participation in investment, and today the State Mining Company (STAMICO) invests in the mining sector on behalf of the government. Accordingly, section 10 of the Mining Act of 2010 stipulated a government stake be held in domestic mining ventures. In addition, investments exceeding $100 million require a special mining license. At that level, they also qualify to enter into a mining development agreement with the government that aims to stabilize the fiscal package. In such projects, the government must also hold a stake. The process is one of negotiation, whereby the state receives some shares and purchases others.

Minister Muhongo has revealed his plan to increase the mining sector's contribution to GDP from around 3.5% to 10%. What policies will ensure this growth?

By 2025, we aim to have realized this goal, and there are various measures that must be taken to achieve it. As mentioned, the government will hold a stake in all new projects. This is to ensure that STAMICO is participating in investment, and that the country at large is benefiting from the mining sector. We also need to fully integrate the sector with the broader economy. Today, mining companies procure food, services, and goods locally to maximize the benefits for Tanzania. We encourage local participation in the mining sector by providing government support, which also builds human capacity among the local population. We assist businesses in the mining sector with finance and training. We have also mandated that all mining companies register on the Dar es Salaam Stock Exchange, whereby locals can purchase stock there and retain further revenue in the local economy. The new act also eases the business environment in many ways. For example, it grants specific licenses for smelting and other areas.

How does technology and knowledge transfer influence the mining industry?

These elements are crucial. Our efforts at restructuring the small-scale mining industry depend on the acquisition of new processes. Currently, small-scale mining is a dangerous venture with a negative impact on the environment, and we are keen to institute public-private partnerships (PPPs) to address this. We foresee certain state quotas, while partnerships would provide essential equipment and technology to increase yields in pursuit of overall profitability. As far as knowledge transfer is concerned, having well-trained professionals from abroad working here provides numerous advantages. Gem stones are currently only cut in certain countries, but we have restricted the export of raw tanzanite such that the cutting can only be done here. Currently, expert cutters are already here teaching Tanzanians this valuable skill. Meanwhile, copper smelting is a growing industry, and we have assembled better technology, smelters, and experts locally within a very short timeframe.

What aspect of the mining sector offers the greatest growth potential?

Gold has been our dominant export for some time—we are the third largest gold producer in Africa and have a number of major mines. We also have nickel in several mines such as Kabanga and Dutwa in central Tanzania, and other prospects. Uranium is another project, which may elevate Tanzania above Canada as the largest uranium exporter in the world after Kazakhstan. However, global demand is shifting toward base metals such as iron, copper, and nickel, and in the future we will develop these further. Coal is in high demand, and our mining sector is diversifying rapidly. Minerals contribute 50% of our total foreign currency inflows, of which gold accounts for over 90%.