Minister defends tanzanite miner

The government will not revoke the mining licence for TanzaniteOne Mining Limited and instead will seek a strategic partner to buy 50 shares of the company.

The Minister for Energy and Minerals, Prof Sospeter Muhongo, told mineral dealers here at the weekend that there was “no justification” to kick out the company and subdivide its mining block to local miners.

He said the government was obliged to honour the contracts it has entered with foreign investors and that it cannot revoke their licences without weighing the consequences of such a measure.

Prof Muhongo wondered why persistent calls to revoke TanzaniteOne mining licence were made by the mineral dealers some of whom he accused of not paying tax despite owning properties worth billions of shillings including, five-star hotels.

He said the government had already downgraded the special mining licence which the company enjoyed since it started operations at Mererani hills a decade ago to a normal mining licence for gemstones in compliance with the new mining law.

Prof Muhongo also denied that President Jakaya Kikwete had promised to subdivide Block C, which is mined by TanzaniteOne, among the locals. The promises were allegedly made during the past election campaigns.

“There is no documentary evidence at Manyara regional commissioner’s office to support the claim that the President has promised to remove TanzaniteOne in favour of the local miners. There is nothing like that,” he said.

He added that the government would not risk chasing the company from Block C merely because it is owned by outsiders. “By so doing we risk being taken to court and end up paying hefty sums of money for compensation,” Prof Muhongo said.

However, the minister emphasised that the government’s position on the TanzaniteOne does not compromise its support for the small scale miners whom, he said, occupy 90 per cent of all mining areas in the country.

He said the government has a special programme for supporting small-scale tanzanite miners with finance and equipment but regretted that many of them neither declared their mineral yields nor paid tax.

On Saturday, the minister told The Citizen that the government is currently sorting out legal technicalities to get a partner who will take the 50 shares of TanzaniteOne and that the exercise would be completed in two to three weeks.

Later in the day when addressing a public rally organized by the ruling Chama Cha Mapinduzi (CCM) at the Sheikh Amri Abeid Stadium, Prof Muhongo warned local miners against taking law in their own hands.

Yesterday, TanzaniteOne Corporate Governance Manager Lusekelo Mwakalukwa said they were waiting for the government’s directive to get a shareholder but declined to reveal the stage the negotiations had reached.

He was, however, categorical that TanzaniteOne has invested millions of dollars in equipment, personnel and capital injection and that they expected the other partner or partners to do the same.

“We agree with what the minister has said because it is within the laws of the country. Negotiations will also touch on the shareholding structure,” Mr Mwakalukwa told The Citizen, insisting that the firm had been compliant  with the relevant laws, including paying tax.

The Mining Act 2010 law requires that gemstone mining will be carried out exclusively by Tanzanians except where it requires heavy investments and sophisticated technology, among others.

During the meeting at an Arusha hotel, tanzanite miners reiterated their call to the government to revoke mining licence for TanzaniteOne and subdivide the block to the local miners. The government has spurned similar calls in the past.
Source: The Citizen, www.thecitizen.co.tz, reported by Zephania Ubwani in Arusha
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