nngu007
JF-Expert Member
- Aug 2, 2010
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In terms of mineral diversity and wealth, Tanzania is ranked fourth after South Africa, Democratic Republic of Congo and Nigeria, reports ROBERT K MUGO
Mining rarely, if ever, gets as much attention as coffee, tea and tourism as a key potential source of revenue for the East African countries. This is despite the fact that the region is known to host significant quantities of several important minerals, including gold, titanium, nickel and diamonds. These minerals, if developed and managed well, have the potential to contribute significantly to the economic development of the region, leading to improved livelihoods for the citizens.
Of the East African countries, Tanzania is known to be the most well endowed with minerals, with vast quantities of gold, nickel, diamonds, gemstones and coal, amongst other valuable minerals. The country is ranked fourth in terms of the diversity and richness of mineral resources in Africa, after South Africa, Democratic Republic of Congo and Nigeria.
Mining started in Tanzania well before the colonial period and was mostly in the hands of the private sector in the early years. However, following independence, Tanzania oriented itself towards nationalisation and State ownership of industries. This resulted in the disappearance of foreign investment with subsequent declines in mining investment.
Tanzania has, however, witnessed a resurgence of mining since the early 90s. This renewed interest is a result of changes in the political structure and trade liberalization policies beginning in the mid-80s, when President Ali Hassan Mwinyi took over the presidency.
A number of reforms, supported and funded largely by the World Bank, were made to encourage mining growth. These reforms culminated in the 1997 Mineral Sector Policy, which emphasised the primary role of companies as mining operators, and the government as regulator. The reforms have had a huge impact on the growth of the Tanzania mining sector over the past 15 years. The sector has been one of the fastest growing in the Tanzanian economy, with an average growth rate of 12 per cent per annum.
Mining has attracted over US$2.5 billion in foreign direct investment (FDI) since 1998. The contribution of the mining sector to GDP has risen from about TSh220 billion in 2002 to about KSh740 billion in 2007. At the same time, the value of exported minerals rose from US$440 million in 2002 to about US$890 million in 2007. A total of nine large large-scale mines are now in operation in Tanzania, with six having come into existence only during the last ten years. These mines employ approximately 9,000 Tanzanians.
Despite the very significant growth witnessed in the Tanzanian mining sector over the last decade, concerns have been expressed by some stakeholders that the country is not getting its fair share of revenues from mining companies. Media reports about environmental and social issues at some mining sites and concerns by artisanal (small-scale) miners that they are being pushed away to make room for large-scale mining have further served to increase public awareness about the role of the mining sector.
Minerals by their nature are non-renewable resources. Therefore, once mined and processed they are no longer available (save for recycling). It is important that mineral resources be developed in a way that contributes to sustainable development. So, what can Tanzania, and indeed other East African countries that are looking to develop their natural resources, do to ensure that they escape the so-called Paradox of Plenty or Resource Curse situations where countries endowed with abundant natural resources often tend to be some of the poorest and least stable places (as in the case of the DRC, Sudan and Sierra Leone)?
For starters, the East African countries should not abandon past and present political, legal, institutional and economic reform efforts geared towards liberalising economies and making it easier for local and international investors to do business in the region. However, reforms need to be targeted and customised to the unique needs of the people and realities of the region, as opposed to being externally-driven. Moreover, there is a need to undertake periodic review of policies that have been in place for a while, so as to ensure they remain valid and appropriate for todays circumstances.
In Tanzania, several attempts have been made to review the laws and regulations governing mining sector development. For example, upon his election in 2005, President Jakaya Mrisho Kikwete undertook to effect legal and policy reforms in the mining sector. In 2007, the Tanzanian Government appointed a Presidential commission headed by Judge Mark Bomani to investigate the mining sector and review mining contracts made between the government and mining companies.
The Bomani Commission made a number of recommendations pertaining to the fiscal regime and other mining sector-related issues. Most of the recommendations have yet to be acted on. Because mining activities do eventually come to an end, it is important that revenues generated by mining projects during their operational periods be used wisely to fund other sustainable long-term economic activities that will continue to exist long after mining ceases. This may include industries and businesses that are un-related to mining, so they can serve as economic engines once mining activities come to an end.
One possible way to ensure that revenues generated from the exploitation of non-renewable resources such as minerals do not all go into general government revenue, but that a portion is invested for other economic activities, is to set up a permanent savings and or investment fund. Such a fund typically receives a portion of the royalties or taxes collected by the government, to be used as a saving for the future, for use in diversifying the economy or for other purposes as may be deemed to be appropriate. Some examples of such funds include the Norwegian Oil Fund and the Alaska Permanent and the Alberta Heritage Fund (Canada).
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[h=2]HERE'S WHAT TANZANIA OFFERS INVESTORS[/h]
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Scarcity Amid PlentyIn terms of mineral diversity and wealth, Tanzania is ranked fourth after South Africa, Democratic Republic of Congo and Nigeria, reports ROBERT K MUGO
Mining rarely, if ever, gets as much attention as coffee, tea and tourism as a key potential source of revenue for the East African countries. This is despite the fact that the region is known to host significant quantities of several important minerals, including gold, titanium, nickel and diamonds. These minerals, if developed and managed well, have the potential to contribute significantly to the economic development of the region, leading to improved livelihoods for the citizens.
Of the East African countries, Tanzania is known to be the most well endowed with minerals, with vast quantities of gold, nickel, diamonds, gemstones and coal, amongst other valuable minerals. The country is ranked fourth in terms of the diversity and richness of mineral resources in Africa, after South Africa, Democratic Republic of Congo and Nigeria.
Mining started in Tanzania well before the colonial period and was mostly in the hands of the private sector in the early years. However, following independence, Tanzania oriented itself towards nationalisation and State ownership of industries. This resulted in the disappearance of foreign investment with subsequent declines in mining investment.
Tanzania has, however, witnessed a resurgence of mining since the early 90s. This renewed interest is a result of changes in the political structure and trade liberalization policies beginning in the mid-80s, when President Ali Hassan Mwinyi took over the presidency.
A number of reforms, supported and funded largely by the World Bank, were made to encourage mining growth. These reforms culminated in the 1997 Mineral Sector Policy, which emphasised the primary role of companies as mining operators, and the government as regulator. The reforms have had a huge impact on the growth of the Tanzania mining sector over the past 15 years. The sector has been one of the fastest growing in the Tanzanian economy, with an average growth rate of 12 per cent per annum.
Mining has attracted over US$2.5 billion in foreign direct investment (FDI) since 1998. The contribution of the mining sector to GDP has risen from about TSh220 billion in 2002 to about KSh740 billion in 2007. At the same time, the value of exported minerals rose from US$440 million in 2002 to about US$890 million in 2007. A total of nine large large-scale mines are now in operation in Tanzania, with six having come into existence only during the last ten years. These mines employ approximately 9,000 Tanzanians.
Despite the very significant growth witnessed in the Tanzanian mining sector over the last decade, concerns have been expressed by some stakeholders that the country is not getting its fair share of revenues from mining companies. Media reports about environmental and social issues at some mining sites and concerns by artisanal (small-scale) miners that they are being pushed away to make room for large-scale mining have further served to increase public awareness about the role of the mining sector.
Minerals by their nature are non-renewable resources. Therefore, once mined and processed they are no longer available (save for recycling). It is important that mineral resources be developed in a way that contributes to sustainable development. So, what can Tanzania, and indeed other East African countries that are looking to develop their natural resources, do to ensure that they escape the so-called Paradox of Plenty or Resource Curse situations where countries endowed with abundant natural resources often tend to be some of the poorest and least stable places (as in the case of the DRC, Sudan and Sierra Leone)?
For starters, the East African countries should not abandon past and present political, legal, institutional and economic reform efforts geared towards liberalising economies and making it easier for local and international investors to do business in the region. However, reforms need to be targeted and customised to the unique needs of the people and realities of the region, as opposed to being externally-driven. Moreover, there is a need to undertake periodic review of policies that have been in place for a while, so as to ensure they remain valid and appropriate for todays circumstances.
In Tanzania, several attempts have been made to review the laws and regulations governing mining sector development. For example, upon his election in 2005, President Jakaya Mrisho Kikwete undertook to effect legal and policy reforms in the mining sector. In 2007, the Tanzanian Government appointed a Presidential commission headed by Judge Mark Bomani to investigate the mining sector and review mining contracts made between the government and mining companies.
The Bomani Commission made a number of recommendations pertaining to the fiscal regime and other mining sector-related issues. Most of the recommendations have yet to be acted on. Because mining activities do eventually come to an end, it is important that revenues generated by mining projects during their operational periods be used wisely to fund other sustainable long-term economic activities that will continue to exist long after mining ceases. This may include industries and businesses that are un-related to mining, so they can serve as economic engines once mining activities come to an end.
One possible way to ensure that revenues generated from the exploitation of non-renewable resources such as minerals do not all go into general government revenue, but that a portion is invested for other economic activities, is to set up a permanent savings and or investment fund. Such a fund typically receives a portion of the royalties or taxes collected by the government, to be used as a saving for the future, for use in diversifying the economy or for other purposes as may be deemed to be appropriate. Some examples of such funds include the Norwegian Oil Fund and the Alaska Permanent and the Alberta Heritage Fund (Canada).
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[h=2]HERE'S WHAT TANZANIA OFFERS INVESTORS[/h]
- Over 800,000 kilometers of varied geological terrains with potential mineralresources.
- Ongoing exploration work resulting in discovery of resources in excess of 45 million ounces of gold, 1.5 million tones of nickel and 50 million carats of tanzanite.
- An Archaean shield environment with a number of classical Canadian and Australian type greenstone gold lode deposits, many capped by tropically weathered enrichment zones.
- An extensive Proterozoic terrain containing lode and near surface gold deposit types, now attracting exploration attention in South America, West Africa and elsewhere.
- Potential for epithermal gold deposits in the faulted younger rocks on the coastalplain.
- A world-class diamondiferous kimberlite at Mwadui and more than 200 other kimberlites, many of which are yet to be thoroughly evaluated.
- Scores of occurrences of high value coloured gemstones, such as emerald, ruby, tsavorite, sapphire, tanzanite, and alexandrite.
- A wealth of other opportunities in minerals, including coal, iron, tin, graphite, evaporates, kaolin, limestones, dimension stones, phosphates and gypsum.
- Recent history of production decisions by well-financed, international companies.
- Ample inventory of unexplored mineral ground.
- A comprehensive, systematically archived data base on geoscientificinformation and mineral resources.
- Minimal competition at present from large multinational mining firms.
- Globally competitive tax and regulatory regime for mining investors.
- Accelerated and simplified handling of investment proposals.
- Technical staff trained in various disciplines associated with mining.
- An abundant supply of labour.
- A peaceful working environment free of confrontations, ethnic strife andlabour disputes.
- Well-established supporting services.
