The 10 per cent target contribution to the country’s GDP from the mining sector is marred by uncertainties on the ground, making it almost impossible to achieve the 2025 goal, Tanzania Chamber of Mineral and Energy has warned.
Chamber’s honorary secretary Deo Mwanyika says there are no signs of having more exploration and mining investments in the near future, thus, affecting the achievement of Vision 2025.
Tanzania targets to raise the contribution of the mining sector from the current 3.7 per cent to at least 10 per cent of GDP come 2025.
Mr Mwanyika who also doubles as the African Barrick Gold’s Vice President for Corporate Affairs, says the horizon of the mining industry is still uncertain, adding: “I don’t see any new mine starting operations in Tanzania in the next five to ten years. There is a lot of uncertainties surrounding the mining sector and issues of law and order are also affecting new investment.”
He cites an example of the fiscal deficiency where $136 million of VAT refund that the government owes mining companies just between October 2012 and April 2013.
According to him, current VAT refunds stand at $10 million per month for the industry and “lack of refunds causes serious cash flow issues and leads to reversal of using local contractors.”
“Investors are under pressure from external auditors and shareholders to seek legal remedy in international arbitration.
This is clearly undesirable hence the need to resolve the matter,” says Mr Mwanyika.
Speaking as an ABG official, he says even their expansion plans for North Mara mine are almost impossible to continue because there is a high level of speculations.
“Many people are coming from all over the country and erect buildings there expecting compensation once we start expanding,” he remarks.
Tanzania produces gold, diamond, nickel, tanzanite and currently eyes uranium and coal.
So far, only Mkuju Uranium has been issued with permit while other sites are undergoing feasibility studies.
Gold is the main foreign exchange earner and three of the five large scale gold mines are owned by ABG.
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