Tanzania is set to overhaul its extractive industry after the government passed a new law that posits strict guidelines for foreign companies.
The new law gives companies three months to comply with the regulations, while also making them apprise the government of how they are enacting these changes.
As part of reform, the government wants to enhance the competitiveness of local mining and financial institutions by setting minimum employment levels and in-country spend for foreign firms, while also providing a structural monitoring and reporting system that ensures companies deliver on these objectives.
The passage of the legislation is part of president John Magufuli’s promise to fix the mining sector. The populist-leaning president has been leading an effort to tackle corruption, squeeze mining companies for higher revenues, and ensure that processing takes place within the country.
Last year, Magufuli banned the export of unprocessed minerals as the government squeezed mining companies for increased royalties. His administration also asked the African subsidiary of the Toronto-based Barrick Gold to pay a jaw-dropping $190 billion in revised taxes, interests, and fines.
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