Mining lobby asks govt to delay passage of new laws

03Jul 2017
The Guardian Reporter
The Guardian
Mining lobby asks govt to delay passage of new laws
  • Chamber of mines voices concern against the lack of a thorough process of consultation between the government and mining companies

THE Tanzania Chamber of Minerals and Energy (TCME) has asked for more time to review three landmark bills submitted to parliament last week for the overhaul of the legal, regulatory and fiscal framework of the country's extractive industry, citing a lack of stakeholder angagement.

President John Magufuli.


The government wants the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms), the Natural Wealth and Resources (Permanent Sovereignty) and the Written Laws (Miscellaneous Amendments) bills to be passed by parliament this week under a certificate of urgency.

But TCME warned that the proposed legislation would have far-reaching consequences on Tanzania's mining sector and urged the government to rethink its decision of rushing the bills through parliament.

"The chamber is concerned at the lack of stakeholder consultation prior to the publication of this 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," TCME said in a public statement yesterday.

"This does not support the Public Private Partnership (PPP) drive and past reviews of the legislative framework where a thorough process of consultation has been carried out in order to ensure that stakeholders have full opportunity to present and debate their views in order to ensure that the best outcome for all is reached." 

TCME called for a "reasonable period of time for consultation with all stakeholders" to allow the government to assess private sector views before the bills are debated in parliament.

"This is critical in ensuring that any changes proposed to existing legislation in natural resources can be informed by the views and practical insights and experiences of the industry itself in order to have a positive impact on the effective operations and contributions of the mining industry in Tanzania."

Stakeholders were invited to submit their views on the proposed legislation to designated parliamentary committees on Saturday before debate on the bills begins in the National Assembly today.

A parliamentary source told The Guardian yesterday that the mining lobby's pleas for the legislative process to be delayed will likely fall on deaf ears.

The government is determined to push through the three bills in parliament and has received support from the opposition ACT-Wazalendo party.

President John Magufuli, speaking yesterday at the inauguration of a port expansion project in Dar es Salaam, urged Tanzanians to put aside their ideological differences and unite to defend the country's natural resource wealth. 

The Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Bill of 2017 describes "unconscionable terms" as those contrary to good conscience and the enforceability of which jeopardises the interests of the Tanzanian people.

"Where the government has served notice of intention to re-negotiate the arrangement or agreement ... and the other party fails to agree to re-negotiate the unconscionable terms or no agreement is reached ... such terms shall cease to have effect and shall by treated as having been expunged," says part of the bill.

National Assembly Speaker Job Ndugai said the duration of the ongoing parliamentary session has been extended by several days to allow members of parliament to study the bills and approve them.

There have been growing calls from members of parliament for Tanzania to re-negotiate mineral development agreements (MDAs) and production sharing agreements (PSAs) signed between the government and mining and oil and gas companies respectively to remove "over-generous" tax incentives and fiscal stability clauses that deny the country a fair share of revenues from its natural resource wealth.

Tanzania is Africa's fourth-largest gold producer and has made vast discoveries of natural gas, but remains one of the poorest countries in the world, lawmakers said.

Major foreign-owned mining companies in Tanzania that will likely be affected by the mandatory contract reviews include Acacia Mining Plc, AngloGold Ashanti and Petra Diamonds.

BG Group - which was acquired by Royal Dutch Shell -, together with Statoil, Exxon Mobil and Ophir Energy, plan to build a $30 billion onshore liquefied natural gas (LNG) export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC).

Barrick Gold Corp. agreed with Tanzania on June 14 to hold talks aimed at resolving an escalating dispute over a gold and copper concentrate export ban which has hit Barrick's Acacia Mining PLC.

The Tanzanian government, which has alleged that Acacia has evaded taxes, said its audit showed the miner had 10 times more gold in gold and copper containers prepared for export than it declared. Acacia has denied the tax evasion accusations.

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