USA Africa Dialogue Series - Securing a Social Licence to Operate? Mining in Tanzania

This report says that despite its relatively nascent operations, commercial mining is becoming a significant contributor to the Tanzanian economy and has the potential to become more so. While mining's contribution to Tanzania's gross domestic product (GDP) is a relatively modest 2.3%, its export value constitutes some 45% of foreign earnings. Moreover, the government has set a target for the sector of a 10% contribution to GDP by 2025. Africa's third-largest gold producer after South Africa and Ghana, Tanzania is also endowed with significant diamond, gemstone and nickel deposits. Since the commencement of Tanzania's commercial mining operations, up to 15% of Africa's mining investment has been ploughed into the country's mining industry. Tanzania's gold deposits, along with its favourable Mining Act, have attracted investment from two of the world's major gold producers, Barrick Gold and AngloGold–Ashanti. However, mining in Tanzania has also attracted a great deal of increasingly trenchant criticism, resulting in claims that the country is not deriving its fair share from its mineral endowment and the government establishing the Bomani Commission to inquire into the mining sector, tasked with examining the existing Mining Act. While at the time of writing this report the government had not released its response to the Bomani Commission's findings, the expectation is that the government may seek to take a 10% stake in selected mining operations, increase the royalty on gold producers from the current 3% to 5%, and scrap a number of tax breaks and incentives embedded in the current Mining Act and other legislation.

http://www.saiia.org.za/images/stories/pubs/reports/saia_rpt_07_goldstuck_hughes_20100326.pdf 

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