Tanzania grants Chinese firms licences to build gold refineries

The move is part of a government effort to generate more revenue from Tanzania's mining industry.

    The Tanzanian government said it had set up 28 mineral trading centres since March to improve revenue collection from small-scale miners
[File:Trevor Snapp/Bloomberg]
    The Tanzanian government said it had set up 28 mineral trading centres since March to improve revenue collection from small-scale miners [File:Trevor Snapp/Bloomberg]

    Tanzania said on Wednesday that it had awarded licences for the construction of a mineral smeltery and two gold refineries to Chinese firms, as part of government efforts to generate more revenues from the nation's mining industry.

    Mining Minister Doto Biteko said the Chinese companies would also soon be awarded licences for mines, each of which would require investment worth more than $100m.

    He did not name the firms or give details about the mining or other projects in the East African nation, Africa's fourth-biggest gold producer after South Africa, Ghana and Mali.

    The Tanzanian government invited bids from mining firms to build smelters and refineries, although Tanzania's chamber of mines has said such projects would not be economical.

    Biteko said 37 Chinese companies had expressed interest.

    "After carefully assessing the financial capability and history of those companies, we have issued licences for the construction of two gold refineries and a smelter," he said.

    "We will also soon award special mining licences to two companies to build large-scale mines whose individual investment is above $100m," he added.

    He was speaking in a televised address at a ceremony in Dar es Salaam at which Kenyan authorities handed back 35kg of gold intercepted after it was smuggled out of Tanzania.

    The government said it had set up 28 mineral trading centres since March to improve revenue collection from small-scale African miners.

    "Gold worth a total of 136.7bn Tanzanian shillings ($60m) has been traded through the new mineral centres since March and the government has collected 7.7bn shillings ($3m) royalty and clearance fees," Biteko said.

    Small-scale miners produce around 20 tonnes of gold a year, but 90 percent is illegally exported, a parliamentary report said.

    Tanzanian President John Magufuli said revenue collection from mining had increased over the past two years after his government tightened controls.

    Tanzania collected 301 billion shillings ($130m) in mining revenue in the 2017-2018 fiscal year - a figure that rose to 310 billion shillings ($134m) in 2018- 2019. It aims to collect 470 billion shillings ($204) of mining revenue in 2019-2020.

    "African countries have not been benefiting from their natural resource wealth, including minerals," Magufuli said. "Our minerals have been stolen through smuggling or through exploitative mining contracts."

    Gold exports are a key source of foreign exchange for Tanzania, which exported gold worth $1.549bn last year, up from $1.541bn in 2017, central bank data shows.

    SOURCE: Reuters