Over three hundred mining firms could be de-registered

More than 300 mining companies -- mostly those owned by locals -- risk losing their mineral prospecting licences should the government establish that they have overstayed in utilising the permits.

On Wednesday last week, the government, through the commissioner for Minerals, Mr Ally Samaje, directed 343 applicants for licences to report at the ministry headquarter for rectification of irregularities associated with their applications.

Going by the 2010 Mining Act, the prospecting mining licence must be renewed after every three years pending submission of mining development reports to the Ministry of Energy and Minerals.

The right can be renewed before mining development with a maximum period of seven years subject to submission of mining development report after every three years.

But the Energy and Minerals minister, Prof Sospeter Muhongo, told The Citizen recently that his ministry found out that most registered mining companies have held their mineral prospecting licences for over five years.

“We have established that almost 90 per cent of mining firms, owned by Tanzanians, have held mineral prospecting licences for up to 10 years without putting them into fruition. This is a clear contravention of procedures for possessing mineral prospecting licences,” said Prof Muhongo.

According to Prof Muhongo, the fact that most firms have held the licences for between five and ten years without utilizing them was a clear indication that most holders were speculators seeking to become middlemen.

“This approach has been very discouraging to would be genuine investors, as such it affects country’s investment growth in the sector,” said the minister.

The Tanzania Chamber of Mines and Energy (Tcme) chairman, Mr Joseph Kahama, said that it was a normal thing for the responsible ministry to assess the mineral prospecting rights after every three years to ascertain the status of mining development in the country.

“Each investor is supposed to submit mining development report after every three years and failure to do so means that the licence is invalid. The right can be renewed before mining development with a maximum period of seven years subject to submission of mining development report after every three years,” said Mr Kahama.

The government directive, issued on Wednesday last week, the Commissioner for Minerals, gave a 30-day ultimatum for the firms to rectify the details to their applications, noting that failure to do so will see the Mining Act, 2010 being implemented.

Apart from small investors, mostly local ones, the directives also applied to giant multinational mining companies, including Uranium mining companies, Mantra Tanzania Ltd, Uranex and Western Metals Uranium Ltd.

The list also includes: Mbeya Cement, Integrated Cement Company Ltd, Tanzania Zongfa Construction Company Ltd, Frontier Resources Ltd and Sinoafrica Ltd.

Recently a prospective Indian Investor, Abhijeet raised concern that most local investors had been lining up to possess mineral prospecting licences without developing them.

The director of Overseas Africa of Abhijeet, Mr Abdularahman Khan, said that Abhijeet has been facing obstacles to establish joint ventures with local investors in the mining sector because most of them lacked well developed mines.
Mr Khan said that the Indian company had set aside at least Sh2 billion for supporting small scale miners in the country.

In the negotiations that the Abhijeet management engaged with various local stakeholders, Mr Khan discovered that most only wanted to make quick money through selling mining licences, rather than actually taking the risks to invest in production.

“We have been negotiating with local miners to try to join forces in mining activities. But it seems to us that most of them just prefer to sell their mining rights to foreigners for quick money only,” Mr Khan said.

According to him, the most important thing is to educate Tanzanians for engaging in serious business and take risks so that they invest in the sustainable mining projects.
Source: The Citizen,http://www.thecitizen.co.tz, reported by Ludger Kasumuni

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