A prominent member of the Tanzanian business community has made an impassioned appeal for more Tanzanians to engage in mineral prospecting, saying that would help them reap handsome benefits from the country’s natural resources.
IPP Executive Chairman Reginald Mengi made the call at a luncheon he hosted for mining stakeholders in Dar es Salaam yesterday.
He said it was of vital importance for Tanzanians to cooperate with serious and well-meaning foreign investors from the prospecting stage under terms guaranteeing a win-win situation instead of waiting until actual mining starts.
Mengi said it was sad that some Tanzanians have been securing mining areas and then selling them to foreign investors able to conduct prospecting, wrongly thinking that participating in mining starts and ends with the production of minerals.
Some of our people wait for foreign investors to do the exploration and tell them that particular areas contain mineral deposits, he noted, adding: “Some foreigners coming to our country for mineral prospecting are just normal people who secure mining areas and then use them as collateral with which to secure funding from foreign capital markets.”
“I don’t mean to criticise foreign investors. We should cooperate with them under terms where we can benefit and they too can benefit,” he elaborated.
The IPP Executive Chairman warned that it was high time Tanzanians opened their eyes and participated more fully and knowledgeably in mineral prospecting “or they will end up being mere labourers”.
Citing the era of the privatisation of public organisations, during which he said the country lost the opportunity to empower its people accordingly, he noted: “We should utilise the opportunities available in the mining sector by joining hands with foreign investors.”
He called on the government to look explore the viability of reviewing some sections of the country’s mining legislation, with a view to allowing the retention of patches of land within areas allocated to mining companies.
Tanzania Chamber for Minerals and Energy Chairman Joseph Kahama faulted the bidding for mining licences as provided for under the new (2010) Mining Act, saying it favours people with financial power.
He said this was a serious problem that spelled disaster for Tanzanians in that time could come when all will be kicked or budgeted out of the mining sector.
Kigoma North Member of Parliament Zitto Kabwe said the country would only benefit the most from the mining sector if prospecting licences are given to Tanzanian nationals and they look for foreign investors to partner with, as convenient.
He said that the country’s economy cannot grow to satisfaction if mining prospecting and other licences continue to be in hands of foreigners and Tanzanians are not empowered to own and develop or exploit the country’s natural resources.
The legislator explained that the annual growth rate of Tanzania’s mining sector dropped from 13 per cent in 2000-2007 to a miserly 1.2 per cent in 2007-2011.
He said that during the run-up to the enactment of the mining law now in use, MPs rejected the bidding process recommended and argued to no avail that prospecting licences should be issued to Tanzanians able to negotiate with foreign investors. The MP further urged the government “to ensure that mining companies migrate to the new mining law and be more transparent on what the government is earning from the mining sector”.
He suggested that the bidding process has effectively turned into a revenue regulation measure instead of facilitating the allocation of mining areas to Tanzanian nationals.
African Barrick Gold Vice President Deo Mwanyika meanwhile argued that there was no way Tanzania could benefit as expected from the mining sector “unless it is quite clear about what resources it has”.
“We surely need investors but, as a country, we should know what we have and how we are going to benefit from the particular resources,” he said.
He explained that mineral prospecting and exploitation involved the sinking of massive amounts of money and were thus hugely risky processes.
Responding, Energy and Minerals minister William Ngeleja was emphatic that it was of paramount importance for Tanzanians to participate fully in mineral prospecting “as that is a most crucial stage in mining”.
He said the government will take up all issues raised at the luncheon, including calls for revisiting some sections for the Mining Act “for the good of our nation”.
“The government had good intentions when it came up with the new legislation, as it sought to ensure that all parties benefited from the sector,” he explained.
“The new mining law was not enacted for the benefit of investors but was meant to benefit all the relevant parties, and that’s why it contains sections that deliberately protect the interests of the nation,” he added.
He said some of the salient features of the Act relate to the need to ensure provision of quality services, adding that he is conducting vetting meant to make sure that it is indeed Tanzanian nationals who steal the show.