There have been multiple changes and amendments to mining legislation, with a focus on mineral beneficiation and local content to encourage local participation.

The mineral beneficiation regulations, introduced in 2018 and amended in 2019, require that any person interested in beneficiating minerals apply for a processing, smelting or refining licence with the mining commission.

“The regulations allow the holder of the licence to process, smelt and/or refine minerals, and its servants may buy, acquire, sell and export the minerals as stipulated in the respective licence,” explains legal experts Go2Experts partner Amalia Lui, who presented the Tanzanian Mining Law, Local Content Policy and Tax Regime webinar, alongside conference producers African Influence Exchange on March 30.

Government is “putting in effort in expanding capacity” with regard to labour, technology and water, as beneficiation is a priority for Tanzania.

Owing to the restricted export of raw minerals and mineral concentrates, there is, therefore, a guaranteed market for beneficiation activities.

“Of late, large projects in the beneficiation space have entered the pipeline,” says Lui, citing, for example, the Lwamgasa and Katente gold processing plants and smelters, as well as two gold refineries being developed by Chinese firms, in Tanzania.

Investors can also secure incentives in the mineral beneficiation space through obtaining a certificate of incentives from government. There are also tax exemptions stipulated in the respective tax laws, she notes.

“If the project is registered under an export processing zone, the investor can get a tax exemption for up to ten years. In addition, there are other non-tax incentives that can be granted to the investor upon application to various regulatory bodies,” Lui adds.

The local-content regulations, published in 2018, require affected entities to comply within three months and define a local company as having at least 51% of the issued share capital held by Tanzanians, along with 80% of senior management and 100% of other positions occupied by Tanzanians.

However, the percentage of ownership held by Tanzanians was amended to 20%, which is more investor-friendly.

“I believe that the current legislation has already shown a positive effect and if the legislative framework remains stable, it will have a positive outcome in the long run because there are increased participation and involvement from government.

“Local companies also get access to advanced technology, and mining operations can continue to create employment and act as a catalyst for other industries,” Lui concludes.