Tanzania's mining ministry passed new regulations that will limit foreign participation in mining-related operations as the country looks to take more of the sector's profits, Reuters reported Feb. 20, citing a ministry spokesperson.
The spokesperson said the new rules took effect in January, as directed by Tanzanian President John Magufuli. According to details of the mining regulations seen by Reuters, the rules will restrict how foreign-owned banks, insurance companies and law firms do business with mining companies in Tanzania.
Some of the stipulations include that mining companies will be required to maintain a bank account with a local bank, will be majority- or fully owned by a Tanzanian entity and will conduct transactions through banks in the country. Miners are also mandated to use the services of indigenous brokerage firms and Tanzanian legal practitioners for insurance and legal purposes.
Indigenous Tanzanian companies are required to have at least a 5% stake in a mining company, apart from a 16% government free-carried interest.
These rules make up the local content aspect of the new regulations and are only part of up to nine separate mining regulations enforced by the mining ministry that have yet to be publicly announced. The laws also require the Tanzanian government to prioritize indigenous Tanzanian companies in granting mining licenses.
Acacia Mining plc, Tembo Gold Corp., Shanta Gold Ltd. and Strandline Resources Ltd. are among companies with mining projects in Tanzania, according to S&P Global Market Intelligence data.