- New report provides detailed analysis of the Agriculture, Farming & Raw Materials market
Published on February 03, 2010
by Press Office
(Companiesandmarkets.com and OfficialWire)
The Tanzanian mining industry is relatively small in terms of value, but its importance is highlighted by the fact that mining earns a substantially significant share of the export revenues for the country. The mining sector contributes approximately 2.3% to annual GDP but the government wishes to expand this to 10% by 2025.
Traditionally, gold and diamond production has been the mainstay of mining production for the country. It is the third largest gold producer in Africa behind South Africa and Ghana, and ranks among the top producers of diamonds in the world. Another metal that has been catching the spotlight is uranium, with a significant number of deposits being identified in Tanzania. Coloured gemstones are also mined extensively in the country.
In December 2009, local media reported that a fresh round of discussions on long awaited changes to Tanzania's Mining Act had started in Arusha. Following the talks, there were reports that the government has made some concessions towards mining companies by looking to reduce the taxation burden on the industry. National newspaper The Citizen reported that Minister for Energy and Minerals William Ngeleja said the government would agree fair tax rates' with the industry. Although a new Mining Act has yet to be tabled to parliament, reports suggest the government wants to take a 10% stake in all Tanzanian gold mines, remove tax breaks and incentives for mining companies, alongside increasing metals royalty payments from 3% to 5%. This follows recommendations made by a presidential review committee.
Certainly, there is an argument that Tanzania is not benefiting from mining activity to the same extent as some of its African neighbours. A 2008 report by the Business & Human Rights Resource Centre estimated that the combined loss to the country over the previous seven years as a result of low royalty rates, unpaid corporation taxes and tax evasion by major gold mines amounted to US$400mn. Although mining companies have disputed the basis of the report and questioned some of the figures used, it has had the effect of stirring up public opinion that Tanzania is not gaining a fair deal from mining extraction.
New Data For 2010, we have made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also use the UN's Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast from this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasts, with experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not.
Tanzania's mineral industry, particularly gold mining, is likely to grow in the near future, with increased production from the North Mara mine and the development of projects such as Buckreef and Tulawaka. Coal and uranium prospecting is also continuing around the country, with a high likelihood of some of these projects becoming productive over the coming years. As a result, we forecast steady growth for the Tanzanian mining sector as a proportion of GDP over the next five years, with risks to the upside if new projects come onstream on schedule.
Tanzania Mining Report Q1 2010: http://www.companiesandmarkets.com/r.ashx?id=AT26X282X264517