Tanzania inks deal on investment in Dar es Salaam’s mining sector

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Tanzania inks deal on investment in Dar es Salaam’s mining sector

The government of Tanzania has inked deals with four firms, Faru Graphite Corporation, Petra Diamonds Ltd (PDL), Nyati Mineral Sands Ltd and Sotta Mining Corporation on investment in Dar es Salaam’s mining sector.

The firms inked a contract with the government to major projects anticipated to further develop sector as the government eyes an annual injection of $ 1.2 billion in taxes and royalties. The signing of the new rights, witnessed by President Samia Suluhu at the Julius Nyerere International Convention Centre (JNICC) in Dar es Salaam, also saw the four firms issued with trading licences.

“Our commitment is to create a ground for a win-win situation. We want Tanzanians to benefit from the country’s natural resources that we are blessed by God,” President Suluhu said.

Minerals laws

Tanzania Justice Minister Prof Palamagamba Kabudi said the new development was yet another step towards helping the country’s economy to grow further. The government also issued licences to Nyanzega Gold mine, Fungoni Heavy Mineral sands project in Kigamboni, Mahenge graphite project. It signed a new framework agreement with Petra Diamonds.

President Suluhu said agreements were a tangible fruit of the review of minerals laws, which was implemented under President Dr John Magufuli. In 2017, parliament passed a series of legislations. For mining companies, the 2017 Mining Laws introduced a number of new conditions including a 16% free carried interest for the government and restrictions on the export of raw resources for beneficiation outside Tanzania.

“In all the companies except the PDL, the government enjoys 16% free-carried interest and has agreed on the issue of shares in the mine’s holding company Williamson Diamonds Ltd” Prof Kabudi said.

The deal with the London-listed miner will increase the government’s interest to 37% from 25%. This means that Petra’s stake in the mine will reduce to 63% from 75%. In addition, the two partners have agreed to an economic benefit ratio of 55% for the government and 45% for Petra. On the other hand, the government agreed with Faru Graphite Corporation an economic benefit ratio of 52% for the former and 48% for the latter.

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