Monitoring system to double Dar's mining revenues to $48m

Tanzania expects to earn more from mining once a new system to monitor investors and investments in the industry is rolled out.

The Mining Cadastral Information Management System will help the ministry and track down exploration and mining licence and permit holders who evade paying fees and taxes.

After full installation of the system, the government expects fees and royalty payments to more than double to Tsh60 billion ($48 million) this financial year, from Tsh28 billion ($22.4 million) in 2004, The system seeks to streamline the industry; by ensuring prompt service on a first-come-first-served basis, exclusivity and transparency.

Project manager Hayaz Mruma of the Ministry of Energy and Minerals said this means the granting of mineral rights or exploration rights will be on a first-come, first served basis, while an open registry will be maintained for transparency.

The system will also ensure that once a licence has been granted for a particular area, it remains exclusively in the domain of the rights holder or holders.

“Even though wet have good contracts with the mining companies, it is very important that we have an effective monitoring and compliance system in place in order to reap more benefits from the sector,” said Mr Mruma.

The government has already established a central registry at the Ministry of Energy and Minerals and is currently rolling out the network to 21 sub-registries through out the country. In addition, the system will also help the ministry cope with a significant increase in the number of applications for prospecting and mining licences, mineral trading licences, mineral export permits and permits for the importation and handling of mining explosives.

There are currently over 1,500 pending applications for prospecting and mining licences, some of which go back three years, and this number has been increasing despite the efforts made by the licensing and mineral rights department.

“This situation is denying the government substantial revenue from fees and royalties, while encouraging illegal mining and preventing significant investment in exploration. Furthermore, it also diminishes investors’ confidence in the ministry’s licensing system and its ability to enforce the provisions of the Mining Act, which insists on a first-come-first-served treatment of mining and exploration applications,” said Mr Mruma.

Recently, there has been an increase in mining and related activities exceeding the capacity of the ministry.

“In particular, the capacity of the Minerals Division to process licence and permit applications and monitor the physical and financial operations carried out under each licence has been far short of the capacity needed to effectively promote increased investment in the mineral sector, ensure that the relevant fees and royalties are promptly paid to the ministry, and that each licence or permit holder complies with the Mining Act and the Regulations,” said Mr Mruma.

According to Mr Mruma, there were 5,700 mineral prospecting licences as of March 2004, out of which 940 were prospecting licences, 60 were mining licences, and 4,700 were primary (including smallscale) mining licences.

This was in addition to 590 mineral trading licences. About 1,700 mineral export permits are issued annually. With the new monitoring system, investors will have to comply with the government Mineral Development Agreements which they sign.

“We shall monitor all activities including expenditure and investments in real terms, making sure that investors invest what they commit to invest,” said Mr Mruma.

source:www.nationmedia.com