Govt: New law on natural wealth can now take effect

12Jan 2018
The Guardian Reporter
The Guardian
Govt: New law on natural wealth can now take effect

THE new law on the management and use of Tanzania’s natural wealth and resources passed by parliament last year can now take effect, with the government saying yesterday that work on the respective regulations has been completed.

Constitutional and Legal Affairs minister Prof Palamagamba Kabudi

A statement availed to the media by the Directorate of Presidential Communications said Constitutional and Legal Affairs minister Prof Palamagamba Kabudi had completed preparing the regulations and had submitted the final document to Chief Secretary John Kijazi.

“Prof Kabudi has said the task has been accomplished one day before the deadline set by President (John) Magufuli and declared that the law can now take effect,” the statement reads in part.

There was heated debate in the National Assembly in July last year before the House endorsed the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Bill, 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Bill, 2017, both tabled under a certificate of urgency.

Among other things, the laws stipulate that all the natural resources in question belong to Tanzania and would be utilised only for the country’s benefit.

Also, according to the new pieces of legislation, it is illegal for investors to send any complaints regarding investment in Tanzania to any court outside the country. Instead, all grievances will be handled by the country’s own legal system.

The laws also vest the government with powers to own at least a 16 per cent stake in mining projects and ability to increase royalties on gold and other minerals.

The bills were tabled in the House under a certificate of urgency after months of differences of opinion between mining companies and the government. Most prominent was the government’s differences with Acacia Mining, majority-owned by Barrick Gold, over the sharing of mineral wealth.

The laws were fast-tracked despite appeals from a section of opposition MPs and the mining industry lobby, the Tanzania Chamber of Minerals and Energy, for a delay to allow for more consultations.

“The chamber is concerned at the lack of stakeholder consultation prior to the publication of the proposed legislation and the short notice set aside for consultation, given the material impact it will have on almost every area of the mining industry,” the chamber said in a statement before the bills were passed.

The differences between the government and Acacia first surfaced in earnest in March last year when President Magufuli banned the exportation of gold concentrates, leading to a fall in the company’s shares by almost 50 per cent.

Barrick Gold later took over the talks with the Tanzanian government, the company finally giving up 16 per cent stake in the three gold mines operated in Tanzania by Acacia Mining, namely, Buzwagi, Bulyanhulu and North Mara.

In October last year, after months of negotiations, Barrick chairman John Thornton told journalists in Dar es Salaam that they had also agreed to pay Tanzania $300 million “as a show of good faith”.

The partnership should “ensure Acacia’s operations generate sustainable benefits and mutual prosperity for the people of Tanzania as well as for the owners of Barrick and Acacia,” he said in a statement.