Tanzania Passes Laws Enabling Renegotiation of Mining Deals – by Omar Mohammed (Bloomberg News – July 4 2017)

https://www.bloomberg.com/

Tanzania approved two laws that enable the government to renegotiate contracts with mining and energy companies as the state seeks a greater share of revenue from natural resources.

The bills, which deal with state sovereignty over mineral wealth and contracts containing “unconscionable terms,” were approved by parliament on Monday, lawmaker Peter Kafumu said in a text message. The Tanzania Chamber of Minerals and Energy, the main industry lobby group that has opposed the new laws, said the implications of the bills are “vast.”

“There are many areas that the three bills touch on,” TCME Executive Secretary Gerald Mturi said by phone Tuesday from Dar es Salaam, the commercial capital. “The industry is going to be affected big time.”

Tanzanian President John Magufuli is overhauling the country’s mining industry as the government targets doubling its contribution to gross domestic product to 10 percent by 2025. In March, he banned mineral exports and ordered an audit to identify loopholes that he said result in income losses. In May, the president fired Mines Minister Sospeter Muhongo after a probe found mineral shipments had been understated.

Separately, Magufuli also ordered the Energy and Minerals Ministry to neither issue new mining licenses nor renew expired ones, his office said in an emailed statement on Tuesday, without giving details.

For the rest of this article: https://www.bloomberg.com/news/articles/2017-07-04/tanzania-lawmakers-back-bills-enabling-state-to-scrap-mine-deals

Comments are closed.