In line with the ongoing mining sector reforms, Tanzania has inaugurated an international gold trading centre which is the first in East Africa. The hub is meant to promote mineral trade, discourage smuggling of minerals, and ensure that businesses pay their levies to the government.
The trading hub is situated in the gold-rich region of Geita that produces over 40 percent of the gold exported from the country.
According to Geita Regional Commissioner Robert Gabriel, each of the five districts in the region will have one gold collection centre for small-scale miners, and two banks where gold trading will be taking place.
Mining sector reforms
The establishment of a gold trading hub is part of a broader reform strategy introduced by President John Magufuli to ensure that Tanzania curbs smuggling of the precious commodity and takes the lead in the international gold business. “We are not profiting from our gold as we should,” President Magufuli said.
Ventures Africa earlier reported that the government has reviewed the Mining Act to ease indigenous requirements for international companies wanting to set up mining businesses in the country.
Under the amended law, contractors, subcontractors and financial institutions with at least 20 percent equity owned by locals can participate in mining activities, down from the initial 51 percent local ownership mandated.
Also, parliament recently approved a Bill designed to relieve small-scale miners of the burden of paying a withholding tax of 5 percent and an 18 percent value added tax. This leaves the holders of a primary licence with a 7 percent tax obligation only.
In 2017, President Magufuli ordered the military to construct a 24 kilometre perimeter wall surrounding the tanzanite mines in Manyara Region, to curb smuggling of the rare gemstone. Later on, he gave a 30-day ultimatum for installation of surveillance cameras around the tanzanite mines.
The fencing off of the mines has reportedly seen the country record increased revenues from sales of tanzanite. As at September 2018, tanzanite revenues rose to $461,000 from a low of $74,000 recorded in January 2015.
Tanzania’s mineral wealth includes gold, tin, nickel, iron, copper, zinc, lead, diamonds and uranium. Its gemstones are varied, including tanzanite, coal and industrial minerals such as soda, kaolin, gypsum, phosphate and dimension stones.
Govt to establish more trading hubs
Permanent Secretary in the Ministry of Minerals, Simon Msanjila has revealed that the country is at an advanced stage of establishing more of the government-controlled mineral trading hubs. The hubs will be ready by the end of June, and almost all regions have started procedures for the establishment of mineral markets, including allocation of sites and buildings to be used for trade.
The move is to “ensure all constraints in the mineral trade chain are removed and promote the industry to benefit Tanzanians individually and nationally,” Prime Minister Kassim Majaliwa, who launched the initiative, said.
President Magufuli has been pushing for more revenues from the mining sector since he assumed office in 2015. This is due to the sector being a relatively small contributor to Tanzania’s output.
Stakeholders in the mining industry opined that with mineral-buying centres in place, the country will collect more levies from artisanal miners, control illegal mining, and achieve better overall regulation of the industry across the value chain.