Five committees later, Dar is to review 1997 mining policy By JOSEPH MWAMUNYANGE THE EAST AFRICAN Posted Saturday, January 3 2009 at 10:20 After forming five different committees to study the legal and regulatory framework in the country's mining sector, Tanzania has finally embarked on a review process of the 1997 Mining Policy. Minister for Energy and Minerals William Ngeleja said the purpose of the 1997 Mining Policy was to build a competitive mining sector and attract investors in the industry. Mr Ngeleja added that, even with the prevailing achievements in the mining sector, there remain challenges that include the minimal contribution of the sector to the country's GDP in relation to the growth of the sector. According to Mr Ngeleja, the achievements in the sector included an increase in its contribution to GDP from 1.4 per cent in 1997 to 2.7 per cent last year. The minister said the policy had also helped to attract six large-scale gold mining companies, which on average produced 50 tonnes of gold in 2007 compared with one tonne in 1997. Other achievements included the increase in the number of exploration activities, which boosted the level of investment from $1.3 billion in 1997 to $2.5 billion last year. "There was, in addition, an increase in mineral exports, which reached 52 per cent of the country's total exports in 2007 compared with 1 per cent in 1997," he said. The sector also recorded an increase in the number of employment opportunities. While it employed 1,700 workers in 1997, jobs at large scale mines had risen to 13,000 by last year. The Ministry of Energy and Minerals said that, even with these achievements, the sector's contribution to GDP was still too low when compared with the growth. The government at different times formed committees aimed at improving the sector in general and its contribution to the economy in particular. They include the Mboma Committee, which was tasked with recommending the best way forward on the frequent confrontations between small-scale gemstone miners and TanzaniteOne, a large-scale miner at Mererani. The Kipokola Committee recommended reform of the mining policy, participation of the government in mining ventures and review of the tax regime in the sector with a view to reviewing tax exemptions. The Masha Committee had the mandate to examine existing mining contracts and the tax regime. The Bukuku Committee was formed to implement the Masha Committee's recommendations. This led the government to review corporate tax and large-scale mines started providing $200,000 to local district councils. Finally, the government formed the Bomani Committee, whose mandate was to collect a wide range of views from within and outside the country on the best way forward for the mining sector. The Bomani Committee had the extra duty of examining all previous recommendations by its predecessor committees. One among its many recommendations, was that the government review the mining policy and law. These statistics reveal that the contribution of the sector to the GDP is only 4.5 per cent, thus making it difficult to detect the sector's role in the economy," he said. The level of investment in the mining sector needs to be taken to a higher level for it to contribute significantly to the economy. The new policy and the new mining Act are expected to be tabled in parliament for approval next April. The government has promised to incorporate views of the stakeholders at the two-day meeting in the new mining policy 2008 as a way of creating a win-win situation in the mining sector, said the Permanent Secretary in the Ministry of Energy and Minerals, Arthur Mwakapugi. Mr Mwakapugi said that some of the areas that would be considered in the policy include the need to improve its format, situation analysis and mining sector evaluation. According to Mr Mwakapugi, others are improvement of policy objectives and roles of government in addition to the need to improve statistics to show a clear picture of how the sector was performing. The government has stated that due to the changing business environment in the world, there was need to change the mining policy adopted in 1997.