Tanzania upsets miners

Posted by on July 20, 2017 in Business, News | 0 comments

Tanzania upsets miners

Tanzania has introduced various new rules and regulations in the mining space since the beginning of 2016, which has raised some concerns among international mining companies about populist policies and natural resource nationalisation. For instance, the government banned coal imports in mid-2016 and then banned the export of unprocessed minerals in early 2017. Following this, and in response to a parliamentary committee report that suggested mining firms were coming up short on their financial contribution to the state, the government introduced new amendments to mining laws in July that impose new restrictive terms and conditions on mining ventures in the country. Principle among the latest changes are the government’s ability to dissolve existing mining and energy sector contracts deemed prejudicial to Tanzanian interests, the award of higher government stakes in mining ventures (including a 16% carried stake in mining projects and the right to acquire up to a 50% stake), the requirement to process minerals in-country and bank earnings in local institutions, an increase in royalty fees for some products (in addition to the 1% clearing tax introduced in the 2017/18 Budget), and the removal of the right to binding international arbitration to resolve mining sector disputes. The latest rule changes are wide-ranging and will impact the financial viability of mining in Tanzania, and increase uncertainty among prospective mining partners given the tendency to change regulations with little prior consultation or notice.

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