Mining sector regulations that require Tanzanian local companies to own controlling stakes in
The regulations and the Mining Act amendments, which were part of mineral sector reforms, were meant to give the government a bigger share of the mining sector pie.
Additionally, they sought to boost the participation of Tanzanian nationals and firms in multinationals’ operations. But a year later, further amendments have seen procedural ownership percentage reduced to 20
The new Mining (Local Content) (Amendments) Regulations, 2019 reduced ownership restriction for local mining firms and financial institutions’ preference. Indigenous Tanzanian companies, under the amended regulations, now have to own a minimum 20
Miners have welcomed the amendment, saying it will make the mining industry vibrant. “Many local companies, be they contractors,
“As much as we find it hard to admit that we run short in that respect, things such as machinery are expensive for some local companies.” The Mining Regulations on Local Content (2019), which came into effect on February 8, opened the gates for more local commercial banks to participate in mining activities.
The new regulations slightly reduced the stringent banking requirements, as not many banks operating in Tanzania fall under the definition of “indigenous Tanzanian banks.” Keeping the local content spirit as previous regulations, the Mining Regulations on Local Content (2019) still affects international banks like Barclays, Standard Chartered Plc, Stanbic Bank and First National Bank Tanzania Ltd — which is 100
Economists say that it is a welcome move since the new regulations will allow more local banks, which are not wholly Tanzanian-owned to provide services to the sector. Before the new rule, mining firms were allowed to have bank accounts abroad and repatriate some of their profits, which the government felt was weakening the local currency.
The calls for changes in the mining laws were partly due to claims that some miners, especially multinationals, were evading tax. The new structure seeks to establish even participation in mining activities by local entities including contractors, subcontractors, insurance companies and financial institutions.
Early last month,