1 Legal and regulatory framework
1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?
The main legislation governing mining in Tanzania is the Mining Act (14/2010) and various regulations made thereunder.
1.2 When was the mining legislation last reviewed?
The Mining Act was last reviewed in 2017 through the Written Laws (Miscellaneous Amendments) Act (7/2017). The review brought about significant changes, including the introduction of the Mining Commission, which is tasked with the overall regulation of the mining industry in Tanzania, including the issue and cancellation of licences. The amendments also introduced the right of the government of Tanzania to hold at least a 16% free carried interest in the share capital of medium and large-scale mining operators. The law, however, does not specify the manner in which such shares may be acquired or whether new shares should be created for this purpose. The government may also acquire up to 50% of the shares of such mining companies calculated based on the total tax benefits that such operators have enjoyed.
The other significant introduction made by the review was the compulsory involvement of Tanzanians in the running of mining operations through shareholding and local content requirements. Thus, for any type of licence to be issued, Tanzanians must hold at least a 5% interest in the entity applying for a licence. Mining operators must also meet local content minimum requirements and ensure that suppliers are Tanzanians or entities that are in joint venture with Tanzanian entities.
Other changes included a requirement for mining companies to participate in the growth of the Tanzanian economy by investing portions of their returns. Mining operators must also undertake to conduct mining operations with utmost integrity and not to engage in arrangements that undermine or prejudice the country's financial or monetary systems, the tax system, economic objectives or national security.
1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?
There are several other legislations that impact on or are applicable to mining operations. These include the Environmental Management Act.
1.4 Are there any regional treaties or laws that need to be taken into account?
1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?
The main regulatory body in the mining sector is the Mining Commission, whose functions include:
- issuing, suspending and cancelling exploration and exploitation licences;
- auditing capital investment and operations expenditure;
- assessing minerals produced and issuing indicative prices of minerals;
- conducting dispute resolution;
- conducting investigations and advising the government on health and safety issues; and
- examining and monitoring feasibility reports, mining programmes and plans.
Under the commission are mine resident officers who are appointed and embedded in every mining site; their functions include monitoring production processes and verifying records and information pertaining to production reports. The officers are also responsible for authorising entry into minerals storage facilities within the mine site, and have oversight of removal and transportation of minerals to government warehouses.
1.6 What is the regulators' general approach in regulating the mining sector?
The regulator's general approach is guided by the Tanzania Mineral Policy, which was published in 2009. This mainly requires the regulator to be an overseer and an enabler. Thus, the regulator will not directly engage in operations, but will strive to provide a conducive, competitive and predictable fiscal regime. Recently, the regulator has also strived to ensure participation of local persons and entities in mining operations in line with the legislative changes that were introduced in 2017 – actions which are also reflective of the mining policy.
2 Mining industry
2.1 How mature is the mining industry in your jurisdiction?
The private sector-driven mining industry in Tanzania is relatively young by any standard, having started with the enactment of the first Mining Act (5/1998). Prior to this legislation, one can trace the history of mining in Tanzania back to the period of German colonisation, when mining activities were mainly small scale, the government was not involved in mining and only a few companies conducted such activities. The situation changed during British rule, when all minerals were vested in the governor. The trend after independence was to have mining activities governed by legislation, with the first post-colonial legislation to govern the mining sector being the Mining Act (17/1979) under which the trend regarding ownership of minerals was maintained; thus ‘the entire property in and control over minerals in any land was vested in the United Republic'.
In 1986 Tanzania adopted economic reform programmes which were necessitated after the country experienced a steady decline in economic growth in the late 1970s caused by various factors, including economic policies under a public-sector led economy pursuant to the Arusha Declaration of 1967, the collapse of the East African Community in 1977 and the war with Uganda in 1978–79. The reforms led to the publication of the Mineral Policy of 1997, under which the government's role changed from owning and operating mines to supervising, regulating and providing stimulation and support for private investment in mining. This change of policy ushered in the enactment of the Mining Act in 1998 and the first privately operated mine was opened in 1999.
2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?
Tanzania has many minerals located in various parts of the country, including the unique tanzanite, which cannot be found anywhere in the world other than the Arusha region in the northern part of Tanzania. Other minerals that can be found in Tanzania include gold, diamond, iron, coal, nickel and uranium. Gold is by far the most commonly mined mineral in Tanzania, with estimated reserves of 45 million ounces and production of around 50 tons a year, which places the country as the fourth largest producer of gold in the African continent. Most of the gold mining operations are located in the greenstone belt around Lake Victoria in the Geita, Shinyanga and Mara regions. Some occurrences of gold are also found in the Morogoro region, which is located in the eastern part of the country, as well as in the coastal region of Tanga. Diamonds are mostly mined in the Shinyanga region. A couple of graphite mines are currently being developed in the southern part of Tanzania, in the Lindi region.
2.3 Are any minerals deemed strategic and, if so, what impact does this have?
Currently, no specific minerals are deemed strategic. However, the Mining Act 2010 empowers the minister to declare an area as a strategic mining area.
2.4 Who are the key players in the mining industry in your jurisdiction?
The key players are the multinational mining companies currently operating in Tanzania. Of significance are AngloGold Ashanti, which operates the Geita gold mine; and Barrick Gold Corporation, which has three operating gold mines. There are also a good number of mid and junior mining and exploration companies.
2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?
Mining operations are divided into small, medium and large-scale mining operations. Small operations are those operations whose capital investment is less than $100,000. Licences to conduct such operations are reserved to Tanzanians only. Apart from exploration and exploitation licensing, other rights exist that allow players or potential players in the mining industry to deal in minerals. Therefore, a person may be licensed as a broker or a dealer. A dealer's licence allows the holder to acquire minerals and sell them, including the right to export; and a broker's licence allows the holder to acquire minerals and sell them, but not to export. A broker's licence can only be issued to Tanzanians.
3 Exploration rights
3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?
A prospecting licence is required to undertake exploration activities. There are six broad groups: metallic minerals, energy minerals, gemstones excluding kimberlitic diamonds, kimberlitic diamonds, industrial minerals and building materials. While exploration licences are issued in these groups, the rights attached to each licence do not vary. In addition to the specific exploration licences, the holders of different types of licences to mine are also allowed to conduct exploration activities in the licensed areas.
3.2 What requirements must be satisfied to obtain a licence?
An application for a prospecting licence can be made by, and be allocated to, a body corporate or an individual person. In the case of a body corporate, particulars such as the name and place of incorporation, and the names and nationalities of the directors will be required. Individuals must provide their full name, nationality and address. In addition, the applicant must state:
- the types of minerals and the relevant group for which a licence is sought;
- the size (and plan) of the area of land;
- a statement of available financial and technical resources;
- a statement on the procurement plan of local goods and services;
- details of licences previously allocated;
- a statement of integrity pledge; and
- a local content plan.
3.3 What is the procedure for obtaining a licence? How long does this typically take?
An application for a prospecting licences must be submitted to the Mining Commission in the form prescribed under the Mining (Mineral Rights) Regulations, which must be completed in a prescribed format. Once the commission has received the application, it must notify the applicant within four weeks as to whether the application has been granted. If granted, the applicant is required within a further period of four weeks to give notice of acceptance. A further four weeks after the applicant has confirmed acceptance, the licence will be granted by the commission.
3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?
Exploration rights and mining rights are granted to any person regardless of origin, except primary mining licences, which are reserved for citizens of Tanzania. The Mining Commission may allow the holder of a primary mining licence to contract a foreigner where such holder requires technical support.
3.5 What fees and other charges are incurred in obtaining a licence?
The fees payable to obtain a prospecting licence include:
- application fees ($300 for metallic minerals, energy minerals and kimberlitic diamonds, building materials and gemstone excluding kimberlitic diamond; and $200 for building materials); and
- a preparation fee of $200.
3.6 What is the duration of a licence? What is the process for renewal?
A prospecting licence is issued for a total period of nine years, comprising an initial period of four years followed by two successive periods of three and two years, subject to successful applications for renewal. Upon expiry of the renewal period, there is no further possibility of renewal and the licence reverts back to the government; a prospecting license may then be issued to a designated local mining company. It is possible to undertake exploration in such an area by entering into contractual arrangements with the designated mining company.
A renewal application must be submitted no later than one month before the expiry date of the licence.
3.7 What are the operator's rights and obligations under the licence?
The holder of a prospecting licence enjoys:
- the exclusive right to carry on exploration activities in the licensed area for minerals to which the licence applies;
- the right of entry to the area and the right to erect camps, temporary buildings and installations; and
- the right to dispose of discovered gemstones, for holders of prospecting licences for gemstones.
The obligations of a prospecting licence holder include the obligation to:
- commence operations within three months of the date of grant of the licence;
- to notify the authorities upon the discovery of a mineral deposit of potential commercial value;
- to adhere to the prospecting programme; and
- to ensure compliance with minimum expenditure.
3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?
None. This was also the practice prior to 2017.
3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?
Prospecting licences are transferable without prior consent. There are no restrictions on direct or indirect transfers.
3.10 Does an exploration licence give any priority when applying for a mining right?
Yes. Where there are competing applications for prospecting licence, the application which was registered first will be given priority.
4 Mining rights
4.1 How is ownership of mining rights determined in your jurisdiction?
There are several considerations, but for the purposes of grant, ownership is determined by level of investment. Thus, capital investments of between $100,000 and $100 million are considered medium-scale mining operations and are granted mining licences. Operations whose capital investments is at least $100 million are considered large-scale operations and granted special mining licences.
4.2 What are the key requirements in order to apply for a mining right?
Apart from the capital investment requirements mentioned in question 4.1, others include a requirement to have a 5% local equity participation – although in appropriate circumstances the minister for minerals may vary this requirement. There is also a requirement to make an integrity pledge and to have a local content plan. Other requirements include:
- a comprehensive statement of known mineral deposits, ore reserves and mining conditions;
- a proposed programme for mining operations;
- an estimated recovery rate of ore and mineral products, and their proposed treatment and disposal;
- proposed plan for resettlement, relocation and compensation if the mining operations will take place in areas where people reside;
- the conduct of environmental studies and obtainment of an environmental impact assessment certificate;
- a procurement plan of local goods and services;
- details of infrastructure requirements;
- a proposed plan on employment and training of Tanzanians; and
- a succession plan of expatriate employees.
4.3 What fees and other charges are incurred in obtaining a mining right?
To obtain a mining licence, the fees required are:
- an application fees of $5,000 for a special mining licence or $2,000 for a mining licence; and
- a preparation fee of $2,000 for a special mining licence and $1,000 for a mining licence.
4.4 What is the duration of a mining right? What is the process for renewal?
The duration of a special mining licence is the shorter period of the estimated life of the ore body indicated in the feasibility report or such period as may be requested when applying for the licence. The duration of the mining licence, on the other hand, 10 years, which is renewable for a further period of 10 years.
An application for renewal of a special mining licence must be submitted no later than one year before the expiration period by using a prescribed form, which must contain information including:
- a statement on implementation of the licence conditions;
- the period for which renewal is sought, which must not exceed the estimated life of the ore body;
- details regarding proved, estimated and inferred ore reserves;
- the capital investments to be made;
- production costs and revenue forecasts for the period of the renewal;
- expected changes in mining and treatment methods;
- any expected increase or reduction in mining activities and the estimated life of the mine;
- a proposed programme of mining operations;
- the environmental impact certificate in respect of operations to be conducted during the renewal; and
- if application relates only to part of the mining area, a plan identifying that part.
Once received, the application is sent to the Mining Commission. The licence may be renewed for a period not exceeding the life of the remaining ore body and the renewal may contain variations of conditions of the licence.
An application for renewal of a mining licence must be submitted at least six months prior to its expiration by using a prescribed form, and accompanied by a tax clearance certificate in respect of operations to be conducted during the renewal period. The renewal period cannot exceed 10 years.
4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?
Any qualified person can apply for a mining licence or special mining licence. For corporations, a ‘qualified person' means that it must:
- have an established physical and postal address in Tanzania;
- be incorporated under Tanzanian law;
- not be in liquidation; and
- not have directors who are undischarged bankrupts or who has been convicted on charges related to dishonesty.
As regards individuals, the person must:
- be over 18 years old;
- if not a citizen of Tanzania, have been ordinarily present in Tanzania for a period of four years;
- not be an undischarged bankrupt; and
- not have been convicted on charges related to dishonesty.
4.6 Do any indigenous ownership requirements apply in your jurisdiction?
Yes, mining licence applicants must ensure that they have at least a 5% equity participation held by a local company, unless varied by the minister. Further suppliers and service providers must be locally owned or be in an incorporated joint venture in which a local company holds at least a 20% interest. To qualify as local, a company must be incorporated in Tanzania and have at least a 20% equity owned by Tanzanians; and Tanzanians must hold at least 80% of the executive and senior management positions, and non-managerial positions must be held 100% by Tanzanians.
4.7 What role does the state play in the mining industry in your jurisdiction?
The state plays the role of policy maker and regulator of the industry.
4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?
There used to be such requirements prior to the legislative changes introduced in 2017, but these no longer apply. However, development agreements concluded prior to these changes remain in force, although they may be renegotiated.
4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?
Special mining licences and mining licences are transferable, but prior consent must be sought from the Mining Commission. Consent will be given unless there is proof of substantial development in the licensed area. Where the transfer is to an affiliated person or assignment to a bank, consent is not required.
4.10 Can security be taken over mining rights?
4.11 What provisions apply with regard to closure or abandonment of a mining right?
Abandonment of a mining right is possible under Tanzanian law. The holder of the right must apply for a certificate of abandonment of part or all of the licensed area at least 90 days before the abandonment is to take effect. The application must:
- identify the area to be abandoned;
- state the effective date;
- provide particulars of the activities that have taken place in the area to be abandoned; and
- provide reports and records of such operations.
Abandonment does not affect the existing liability of the licence holder.
5 Surface rights
5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?
Yes, the law in Tanzania makes such a distinction. In order to access surface rights, the mining rights holder must obtain ministerial consent, consent from local authorities, the landowner's consent or the consent of (other) relevant authorities.
Ministerial consent is required for the following, among others:
- areas that are dedicated for burial;
- areas where there is a military installation;
- any reserved area; and
- any protected monument.
Local authority consent and the landowner's consent are required for any inhabited area or land for agriculture, in which case there will be compensation and relocation. Compensation, relocation and resettlement may be required where the rights conferred cannot reasonably be exercised without affecting the interests of a lawful occupier of land. Consent may also be required from other authorities – for instance, in national parks, forest reserves, game reserves and areas where there is a railway.
5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?
The mining rights holder has a right of entry to the licensed area and the right to exercise its reasonably so as not to cause injury to the landowner. It also has obligations, in appropriate cases, to seek required consent or to pay compensation and resettle or relocate the landowner. Where the mining rights holder and the landowner co-exist and land or other property of the landowner is damaged, the mining rights holder must pay fair and reasonable compensation.
The landowner, on the other hand, is obligated not to erect buildings or structures without the consent of the mining rights holder. The minister may intervene where consent is unreasonably withheld.
5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).
Access to surface rights is obtained by payment of compensation to the landowner and, in appropriate cases, resettlement. This process entails the identification of the occupiers of land and their properties, followed by a valuation assessment through which the land, crops and other properties in the area are valued. The local government must be consulted in advance on the valuation exercise, the compensation and, if applicable, resettlement.
The identification exercise is done by a qualified valuer, together with the local government of the area. This is followed by a valuation exercise conducted by the qualified valuer, which serves as the basis for an assessment of the value of land. Compensation items will normally include:
- the value of the land;
- the value of unexhausted improvements to the land;
- a disturbance allowance;
- a transport allowance;
- an accommodation allowance; and
- loss of profits.
Once the assessment is completed, the valuer will prepare a valuation report, which must be approved by the chief government valuer in the Ministry of Lands and Human Settlements. The report must then be endorsed by the regional commissioner, the district commissioner and the ward executive officer. When the approvals and endorsements have been completed, payment of the compensation amounts will be made to the individuals identified in the valuation report. Compensation must be paid within six months of approval and endorsement of the valuation report; if there is a delay beyond six months, the valuation exercise must be redone.
5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?
No. Apart from requiring local participation in the capital equity of a licensee and local content requirements, there are no native issues applicable in Tanzania.
5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?
There are no zoning requirements. However, mining licences are issued based on the plan of the mining area that is appended to the application for a special mining licence or a mining licence.
6 Environmental issues
6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?
Every mining operation requires an environmental and social impact assessment study, followed by environmental certification for the project, before operations can commence. In fact, a particular mining licence will not be issued unless an environmental and social impact assessment certificate (EIA certificate) has already been obtained. The requirement to conduct an environmental impact study applies across the board and there are no specific requirements based on location or type of minerals.
6.2 What environmental obligations must the operator observe while the mine is operational?
The operator must comply with its environmental management plan (EMP), which will be approved during the approval process of the environmental studies and issuance of the EIA certificate. The mining rights holder is also required to undertake an annual environmental self-audit and submit a report to the environmental management council. Further, the council can carry out a control audit whenever it deems this necessary to monitor compliance with the environmental parameters set for the project or to verify self-auditing reports. The control audit is conducted to:
- confirm that the EMP is being adhered to;
- verify the adequacy of the EMP in mitigating the negative impacts of the project; and
- ensure that the criteria used for the audit are based on the EMP.
The Environmental Management Council must also direct that an environmental audit be conducted every five years following the date on which the last environmental audit was conducted.
6.3 What environmental obligations must the operator observe in relation to closure of the mine?
Mining rights holders must prepare and submit to the chief inspector of mines a mine closure plan for approval. The plan should address matters such as:
- programmes to reclaim and rehabilitate land and watercourses to an acceptable condition that takes account of their previous use;
- programmes to support socio-economic activities to provide an alternative livelihood for local communities beyond the life of the mine;
- the cost of providing statutory and other benefits to employees beyond the life of the mine; and
- the cost of reclaiming and rehabilitating the mining area in the event that the mine is closed.
In preparing the plan, district authorities and surrounding communities must be consulted and their comments must be included in the plan.
A rehabilitation bond must be posted in the form of an escrow account, capital bond, insurance guarantee bond or bank guarantee bond, as may be required by the minister.
6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?
There are various sanctions for non-compliance with environmental requirements depending on the nature of the violation. These range from monetary sanctions to imprisonment. For instance, the discharge of dangerous materials or pollution will incur a fine of between TZS 3 million and TZS 50 million. In some cases, a violating party may be ordered to pay compensation. Where a violation is committed by a body corporate, the law is such that the directors and any other person concerned in the management of such body corporate is also considered to have committed the offence, unless they can prove that the offence was committed without their consent or connivance, and that they exercised all such diligence to prevent the commission of the offence as ought to have been exercised by them having regard to the nature of their functions in that capacity and to all other relevant circumstances.
6.5 Which bodies are responsible for enforcement of environmental obligations?
The main body responsible for enforcement of regulations is the Environmental Management Council.
6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?
No answer submitted for this question.
7 Health and safety
7.1 What key health and safety requirements apply to operators in your jurisdiction?
Generally, the management and control of operations – including health and safety – fall within the remit of the mine manager. In addition to ensuring compliance with the statutory requirements, the mine manager is empowered to implement special rules regarding health and safety.
Health and safety requirements include the obligation to:
- keep a register of employees;
- ensure that persons working in the mine are not intoxicated;
- supply safe and clean drinking water to employees; and
- provide wash and shower facilities, including underground waiting rooms and washrooms.
The law further imposes a general obligation on every person working in a mine to take reasonable care to ensure that the work area and equipment to be used for work are in a safe condition, and to report anything that such person deems dangerous.
The chief inspector of mines may also impose additional requirements.
7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?
Mining accidents that result in a loss of life or serious personal injury must be reported as soon as possible, but in any event within 16 hours of occurrence, followed by written notification in a prescribed form within one week of occurrence. Accidents that result in a person becoming incapacitated for a period of 14 days or loss of limb or part of limb must be reported within four days of occurrence. Fatal accidents must also be reported to the police as soon as possible and in any event within 24 hours of occurrence.
Other non-casualty accidents that must be notified are specified in the law and must be reported as soon as possible, followed by written notification. They include accidents relating to winding plants (eg, running out of winding engine, winding drum or conveyance; or failure of depth indicator).
7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?
Generally, any non-compliance with the legislation and regulations could lead to the imposition of different penalties, depending on the nature and severity of the non-compliance. These may include revocation of the licence, subject to the stipulated procedure, or the imposition of financial penalties.
7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?
Operators should have a health and safety policy that adopts at least the minimum requirements that are stipulated in the relevant regulations. There should also be a clear protocol on reporting, to ensure timely reporting of mining accidents.
7.5 Which bodies are responsible for enforcement of health and safety obligations?
The main body is the chief inspector of mines who is appointed by and works under the Mining Commission.
7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?
No answer submitted for this question.
8 Processing, refining and export
8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?
Mineral beneficiation can be done only through a licence issued for this purpose under the Mining (Mineral Beneficiation) Regulations of 2018. The significant changes introduced by the changes in mining legislation in 2017 included a requirement for raw minerals to be stored in the government minerals warehouse, from which they may be removed for beneficiation purposes, among other reasons.
8.2 What requirements and restrictions apply to the export of minerals?
The export of minerals requires an export licence.
9 Taxes and royalties
9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?
Mining operators are subject to 30% corporate income tax on their taxable profits and are also required to withhold tax when making payments:
- in relation to dividends at 10%;
- of interest at 15%;
- of service fees provided by non-residents at 15%; and
- for local professional and consultancy services at 5%.
The value added tax rate is 18%
Mining licence holders have an obligation to pay royalties at a rate of 6% for gemstones, diamonds, uranium and metallic minerals; and at a rate of 3% for other minerals. The calculation of royalties is based on the ‘gross value' of minerals which is defined to mean "the market value of minerals as determined through valuation". The process entails all won minerals to be sorted and valued in the presence of a mine resident officer, a representative from the revenue authority and a representative from the relevant state organ responsible for this exercise. The report made after valuation is used to calculate the payable royalties. The government, however, retains the right to reject a valuation on account of deep negative volatility; in such case, it may purchase the minerals at the lowest value ascertained.
9.2 Are any tax incentives available for mining operators?
Mining operators may avail of tax incentives under two investment regimes: the Tanzania Investment Act and the Special Economic Zones Act. These incentives may include tax holidays for specified periods and tax exemptions. The incentives available under these regimes are applicable to all companies, as long as they relate to investment and qualify according to the stipulated requirements.
However, existing mining development agreements with the government may provide for additional incentives that were available under laws which were applicable when the agreements were entered into, but have subsequently been amended.
9.3 What other strategies might mining operators consider to mitigate their tax liabilities?
Mining operators should ensure that additional tax incentives conferred through mining development agreements or certificates of incentives from the Tanzania Investment Centre are published in the Government Gazette in order to legalise the same. Aside from legitimising these incentives, the government notice helps to shield the investor's interest when dealing with the revenue authority and mitigates the risk of the incentives becoming latent, particularly if they relate to income tax.
9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?
10.1 In which forums are mining disputes typically heard in your jurisdiction?
Generally, there is no specific legislation regarding commercial disputes relating to mining activities. Thus, such disputes will normally be adjudicated in the normal courts; but those involving amounts higher than $35,000 will ordinarily be adjudicated in the Commercial Division of the High Court, with possible appeals to the Court of Appeal of Tanzania, which is the highest court of the land. Agreements to resolve disputes through arbitration will normally be given effect by the courts.
Disputes involving persons engaged in mining operations, either between themselves or with third parties, can resolved by the Mining Commission. However, these are restricted to issues regarding boundaries of mining rights, installation of buildings, water usage, or assessment and payment of compensation.
10.2 What issues do such disputes typically involve? How are they typically resolved?
See question 10.1.
10.3 Have there been any recent cases of note?
There have been no significance disputes between licence holders that we are aware of. In the past, there have been complaints about compensation and resettlements resulting from the development of new mines; however, most of these were settled amicably or before the Mining Commission. However, some former holders of retention licences commenced arbitration against the government given the commercial significance of the areas under the retention licences. The retention licences were revoked following amendments to the Mining Act in 2017 and the areas were returned to the government.
11 Trends and predictions
11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?
Significant changes were made to the legal and regulatory framework in 2017. These included:
- the removal of mining development agreements and the introduction of a legal framework for the review and renegotiation of existing agreements;
- the introduction of free carried interest in the capital of mining operators by the government;
- the formation of the Mining Commission to undertake various regulatory functions in the mining sector, which were previously undertaken by various government bodies within the ministry responsible for minerals;
- an increase in royalties;
- the introduction of local content requirements; and
- the removal of retention licences, which reverted to the government.
11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The mining sector has experienced a number of changes to the legislative and regulatory framework in recent years, in particular the major revisions introduced in 2017 (see question 11.1). Currently, the authorities are in the process of publishing or amending various regulations in order to effect the changes made in 2017, but no further major reforms have been proposed.
12 Tips and traps
12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?
The main issue for operators is the continually evolving regulatory framework governing the mining sector. Since the private sector began to be involved in mining operations in the 1990s, the law has changed every few years. It is therefore important for new entrants to the sector to consider this fact in their business plans. This has become even more relevant following the removal of mining development agreements, which to some extent guaranteed the stability of the legal framework in the course of operations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.