John Magafuli: Tanzania has rolled out a strict new mining law that other African countries should copy

John Magafuli
Tanzania has rolled out a strict new mining law that other African countries should copy

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President John Magafuli has made the mining sector a key part of his agenda to create wealth for his country and has embarked on a path that has put him at loggerheads with foreign investors in his country

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Tanzania has rolled out a new mining regulation that could end up becoming a template for other mineral rich African countries looking to combat exploitation and increase revenues.

President John Magafuli has made the mining sector a key part of his agenda to create wealth for his country and has embarked on a path that has put him at loggerheads with foreign investors in his country.

In 2017 he banned the export of unprocessed minerals as the government squeezed mining companies for increased royalties, leading to a massive bill of $190 billion in fines and taxes for mining giant Acacia and its parent company Barrick Gold.  The company later settled for $300 million and an offer of 16% of its stake in three mines.

The highlights of the new regulations are as follows.

  • Indigenous companies will be given the first preference when approving mining licenses or sourcing for equipment and goods.
  • Companies should also hold accounts in local banks, which have either 100% or majority Tanzanian shareholders.
  • Mining activities will also be insured through local brokerage firms, and licensees have to obtain approval if they need to seek services overseas
  • Contractors are expected to open up an office in the specific local district to engage citizens
  • Companies are also expected to set aside a budget for research and development and facilitate technology transfer to local service and supply companies.
  • Individuals or companies could face prison terms or fines

Tanzania has also recently banned cannabis .

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