30.10.2008 @22:38 EAT Mining firms slam govt "indecision" By Costantine Sebastian THE CITIZEN Mining companies have criticised the Government for not making its position clear on key policy change proposals, saying this makes the future of the industry uncertain. They said on Wednesday that the tendency to dilly-dally on key policy issues threatened the mining industry and could keep potential investors away. They added that Tanzania's status as a key investment destination in Africa was diminishing and the consequences of an unpredictable fiscal regime were now evident. The mining firms sounded the alarm at a meeting that addressed the "discrepancy" between reality and what the public was told regarding proceeds accrued from mining activities. Led by key speaker Deo Mwanyika, executive general manager of Barrick Gold Tanzania, they spoke out against the "negative perception and publicity the industry is being subjected to, politicising of mining issues and the unpredictability of the fiscal regime". "We are holding the destiny of this industry in our hands. The industry is in a critical situation with a lot of uncertainty, particularly on what will be adopted by the Government in terms of the fiscal and regulatory regimes," Mr Mwanyika told the audience. He said there was a need to allow for investment planning in the capital-intensive industry where prices were highly volatile and profits were not made overnight. The head of Anglogold Ashanti in the country, Mr Hatibu Senkoro, told The Citizen that the Government was taking too long to state its position on many aspects. While supporting policy changes as being positive, saying the present regime had been in place for a long time without major changes, he challenged the Government to make quick decisions on all pending issues. He said debating policy matters for four years did not augur well for mining management and attracting investments to the sector. Frequent changing of the rules put off potential investors and made it difficult for those already in the country to make strategic operational decisions, Mr Senkoro said. Mining companies have been holding their breath since the Fourth Phase Government promised to take drastic measures to ensure that the country benefited more from mineral resources. The presidential mining review committee formed last year by President Jakaya Kikwete handed over its report earlier this year. Parliament began debating the report in Dodoma on Wednesday, the same day the management forum took place in Dar es Salaam. Most MPs who spoke on Wednesday urged the Government to fully implement all proposals contained in the report. Several speakers at the management forum accused the Government of dragging its feet on recommendations made by similar committees in the past. This had led to shrinking exploration activities, dwindling FDI inflows, inconsistent growth of the sector and a slump in mineral exports and resultant foreign exchange earnings, they added. Mr Mwanyika told The Citizen that the future of the industry, which contributed about $1.6 billion to the national economy in 10 years, hung in the balance. He said the fate of the sector, which currently accounts for 75 per cent of FDI inflows, lay in the hands of the public and the Government. "The public perception of the sector is very negative, the stability of the fiscal regime is not very clear, regulation is increasingly becoming unpredictable, sabotage is on the crease as is organised crime against miners. All these are sending negative signals to investors," he noted. Mr Mwanyika, who is also honorary secretary of the Tanzania Chamber of Minerals and Energy, described as myopic the tendency to look at proceeds from mining activities from the tax and royalties perspective alone. He said that apart from the about $428.5 million statutory taxes and other contributions the miners had paid since 1997, the national economy had also accrued over $1 billion from the sector in 10 years. This includes about $394 million in salaries, almost $21 million in training personnel, about $15.6 million invested in infrastructure, some $741 million in local procurement and almost $36 million corporate social investment. Mr Mwanyika told the meeting organised by the British Council under the auspices of the Management Forum network that the media and non-governmental organisations had played a big role in "tarnishing" the image of the sector. Advocate Hawa Sinare said instead of politicising the sector, stakeholders should address issues that limited benefits accrued from mining activities. She said the Government should be more concerned about proper training of personnel, citing the lack of courses in mining law in the country. Ms Sinare said not every auditor could audit mining activities thus the need to invest in training such personnel. She challenged Tanzanians to choose between a modern mining industry and "bloody" sector such as those in the Democratic Republic of Congo and Sierra Leone.