The Mining Act Proposed for Amendment

The Government of Tanzania has tabled before the National Assembly for deliberations a Written Laws (Miscellaneous Amendments) Bill, No. 4 of 2024 (the Bill). The Bill intends to amend various laws, including the Mining Act, Cap. 123 [R.E. 2019] (the Act).

Meaning of Gross Value

The Bill intends to amend, among others, section 4 of the Act by redefining the term “gross value” as the market value of minerals as determined at the point of sale or, in the case of consumption within Tanzania, at the point of delivery within Tanzania through valuation in accordance with the Act. This implies that royalties payable are not calculated at the mine, rather at the point of sale. However, for the purposes of calculating the amount of royalties payable, the Government is entitled to reject the valuation if such value is steeply low on account of deep negative volatility, unless the raw minerals are disposed of for beneficiation within Tanzania. Also, where the Government rejects the valuation, it has the option of buying the minerals at the low value ascertained.

Critical and Strategic Minerals to be Provided for

The Bill intends to add section 5B to the Mining Act by expressly categorizing critical and strategic minerals.  Under this proposed provision, the Minister may, on recommendation of the Geological Survey of Tanzania and by Order published in the Gazette, and upon approval by the Cabinet, declare certain minerals to be critical or strategic ones. The said Order is required to prescribe conditions applicable to the critical or strategic minerals, and any contravention of such conditions is an offence. Under this provision, a mineral is considered “critical” if it becomes essential to the national economic, geopolitical consideration, technology, industrial use, and its supply is limited or threatened; and it is considered “strategic” if it has diplomatic or defence importance.

Deemed Withdrawal of Application for Mineral Rights

The Bill intends to amend section 8(1) of the Act by adding to it paragraph (c). Under the said paragraph, an individual or a company that fails to pay an application fee within 28 days from the date of notification of payment of such fee will have such application deemed to have been withdrawn. This intends to put a limit to the period within which the application fees for mineral rights can remain unpaid.

Minimum Capital Investment for Mining Licence Elevated

The Bill intends to amend section 4 by increasing the minimum capital to be invested for purposes of applying for Mining Licence. Prior to the proposed amendments, a Mining Licence is defined as a mining licence for medium scale mining operation, whose capital investment is between $100,000 and US$ 100,000,000 or its equivalent in Tanzanian shillings. The Bill intends to replace this minimum capital, which is $100,000, with $5,000,000.

Amendment in Respect of Minerals for which Dealer Licence May be Applied for

The Bill intends to amend section 73(5) of the Act which provides for application for dealer licence. Prior to the proposed amendments, a dealer licence is applied for either gold; metallic minerals; coloured gemstones; diamond; coal; industrial minerals; and building materials.

The proposed amendments intend to add paragraph (h) bearing tanzanite to the list of minerals or group of minerals for which a dealer licence may be applied for. The Bill defines metallic minerals for purposes of the provision to include all metallic minerals other than “gold”. This implies that a dealer licence can be applied for all metallic minerals except gold. It also defines coloured gemstones to include all coloured gemstones other than diamond and tanzanite. As indicated above, the implication is that a single dealer licence may be applied for in respect of all coloured gemstones except diamond and tanzanite.

Amendment in Respect of Minerals Import Permits

Prior to these proposed amendments, an importer of metallic minerals and gemstones except tanzanite is enjoined to declare in a prescribed form at the Mineral and Gem House or the buying station by indicating the type and quantity of minerals to be imported and the purpose of importation. Upon disposal of the imported minerals, the importer is required to pay royalties and inspection fees to the Mining Commission.

The proposed Bill intends to amend section 86A by introducing a new subsection 4 under which an importer who produces authentic documents proving importation of minerals from outside Tanzania and that he has paid royalty in the country of origin, should not pay royalty upon disposal of such minerals. Making any statement which is false or misleading with the intention of obtaining benefit under the new subsection (4) leads to an offence, and upon conviction, the responsible person is liable to a fine of not less than five million shillings but not exceeding fifty million shillings or three times the value of the imported mineral, whichever is greater, or to imprisonment for a term of not less than one year but not exceeding two years or to both.

Payment of Premium in Respect of Exported Gemstones

The Bill intends to amend section 87(1) of the Act by adding to it a new paragraph (c). Under the proposed paragraph, every authorised miner is required to pay to the Government of Tanzania a premium of 15% in the case of gemstone for export disposed of at the mineral auction or international gem fair.

Connected to the above, the Bill intends to amend section 100C which restricts exportation of raw minerals by adding to it subsection 8 which allows exportation of gemstones disposed of during the government organised mineral auction or international gem fair.

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A copy of the Written Laws (Miscellaneous Amendments) Bill, No. 4 of 2024 can be accessed by clicking here