Introduction.
In Tanzania, the mining sector is a significant contributor to the economy, driving growth and development across various regions. To regulate and manage this sector effectively, the Mining Commission under the Ministry of Minerals established through the written laws (Miscellaneous Amendments) Act, No. 7 of 2017, regulates mining activities such as exploration, mining, processing, mineral trading and issuance of different mineral rights and permits in accordance with the Mining Act and its regulations thereto. The mining licences issued are categorized based on the scale and nature of mining activities, with distinct requirements, rights, and obligations attached to each. Here they are,
- Prospecting License (PL)
A Prospecting License (PL) is the first step for any entity or individual interested in exploring mineral resources in Tanzania. This license grants the holder the exclusive right to conduct prospecting operations in the designated area for minerals specified in the license.
- Duration: It is initially granted for a period of up to four years. It can be renewed for a period not exceeding three years.
- Area: The maximum area is 2,000 square Kilometres.
- Obligations: The holder must carry out work programs, report regularly to the Ministry of Minerals and adhere to environmental and safety standards.
- Special Mining License (SML)
A Special Mining License (SML) is issued for large-scale mining operations. This license is typically granted to companies with substantial capital investment and significant mining projects which capital investment exceeds USD 100 million and is renewable at any time, but no later than one year before expiry of the license.
- Duration: It is granted for the estimated life of the ore body or a period of 25 years, whichever is shorter. It is renewable for successive periods of 25 years.
- Area: The area is determined by the scale of the mining project and is generally extensive.
- Obligations: Holders must comply with all relevant laws, including those related to environmental protection, community development and corporate social responsibility.
- Mining License (ML)
A Mining License (ML) is granted for medium-scale mining operations with capital investment between USD 100,000 and USD 100 Million. This type of license is ideal for individuals or entities with sufficient resources to carry out mining activities on a smaller scale than those under Special Mining Licence (SML).
- Duration: It is issued for a maximum period of 10 years and is renewable for another 10 years; an application which should be made not later than six months prior to expiry of the license.
- Area: The area is generally smaller than that of Special Mining Licence (SML) but must be sufficient to support the planned mining activities.
- Obligations: The holder is required to pay royalties, adhere to environmental management plans and engage with local communities.
- Primary Mining License (PML)
A Primary Mining License (PML) is designed for small-scale miners, often Tanzanian nationals or local enterprises who wish to mine specific minerals such as gold or gemstones.
- Duration: It is issued under Division C and granted for a period of 7 years renewable for successive periods of seven 7 years.
- Area: The area under a PML is generally small, reflecting the scale of operations typical for artisanal or small-scale miners.
- Obligations: Holders of a PML are expected to adhere to basic environmental regulations, safety standards, and community engagement practices.
- Mineral Processing Licence
This license is required for entities involved in the processing of minerals rather than direct extraction. It allows for activities such as beneficiation, smelting or refining of minerals.
- Duration: The Mineral Processing License is typically granted for a period of up to 10 years, renewable for similar periods.
- Obligations: The holder must comply with environmental management and reporting requirements and ensure that processing facilities meet the necessary technical and safety standards.
- Refining Licence (RFLs)
This licence is issued to an individual or Company, authorizing the holder to process raw minerals and extract valuable components such as gold, silver, or other metals enhancing their purity and market value.
- Duration: It is typically granted for a term of 5 years with the possibility of renewal upon satisfactory performance and compliance with legal requirements.
- Obligations: Licence holders are required to submit regular reports to the Ministry of Minerals, detailing the quantities of minerals processed, the efficiency of the refining process and compliance with environmental and safety standards.
- Smelting Licence (SLs)
Smelting License (SLs) is a license that allows the holder to carry out smelting operations, where raw ore is heated to extract metals in a form that can be used for manufacturing or further refining. Smelting is a critical step in the mineral value chain, as it transforms raw ore into a commercially viable product.
- Duration: It is issued for a period of 5 years, with the option for renewal. The renewal process requires a review of the licence holder’s compliance with operational, environmental, and social obligations.
- Dealer Licence
Dealer Licences (DLs) are the mineral trade licences that enable/allow the owner to buy or otherwise acquire minerals from the Mineral and Gem Houses or to sell or otherwise dispose of minerals as specified in the licence, and for the purpose of carrying on business as a dealer, to have possession thereof. Dealer licences are issued to Tanzanians or Tanzanians and foreigners whereby Tanzanians must have at least 25% share of licence possession. Dealer Licences authorize the holder to export any mineral or minerals and its life is 12 months from 1st July to 30th June of the following year.
- Duration: It is issued annually and are renewable.
- Obligations: Licensees must adhere to regulations regarding the trade of minerals, including compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) laws.
- Broker Licence (BLs)
Broker Licence is the mineral trade licence that enables/ allows one to buy minerals from buying stations specified in his licence and sell to a licenced dealer in the Minerals and Gem Houses. It is granted to Tanzanians with at least 18 years or a local company. In Tanzania, a broker licence does not authorize the holder to export any mineral or minerals.
- Duration: It is issued annually from 1st July to 30th June of the following year and renewable in 12 months.
- Obligations: Licensees must adhere to regulations regarding the trade of minerals, including compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) laws.
Additional permits and licences
There are other permits and licences that may be required for conducting mining activities in Tanzania. Generally, all companies in Tanzania are required to be registered with the Business Registration and Licensing Agency (BRELA). The aim of BRELA is to regulate and facilitate businesses in Tanzania and be responsible for the registration of companies. Anyone wishing to conduct mining business in Tanzania is required to obtain a business licence before applying for the mineral right under which he or she wishes to operate. Other permits include those related to health and safety, extraction and use of water, environmental matters, the importation and use of chemicals and explosives, etc.
Conclusion
In Tanzania, the stability of a mineral right is firmly protected once granted, ensuring that it cannot be suspended or cancelled without just cause and following a rigorous due process. The regulatory framework mandates that any suspension or cancellation must be based on specific grounds such as non-compliance with the Mining Act, relevant regulations or the conditions outlined in the license. Additionally, failure to adhere to lawful directions or obligations within development agreements can also warrant such actions. Importantly, the Commission is required to uphold fairness by issuing a default notice and providing the license holder with at least three months to address and rectify any defaults. If remediation is not possible, the license holder must be given the opportunity to offer reasonable compensation for the default. This balanced approach not only ensures adherence to legal and regulatory standards but also protects the rights of license holders, fostering a responsible and sustainable mining industry.
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