Mining – Overview And Services

As we know, Tanzania is rich in a diverse array of minerals, gemstones, gold, uranium, copper, gas, to mention a few. To note that Tanzania is the third-largest gold producer in Africa. Although large-scale foreign investment is a relatively recent phenomenon, gold exploration and mining have a long history in the country. The Mining Sector has gone significant changes in recent years in Tanzania. The key development has been the enactment of the  Written Laws (Miscellaneous Amendments) Act (7/2017) which brought significant changes to the Mining Act, including the introduction of the Mining Commission, which is tasked with the overall regulation of the mining industry in Tanzania, including the issue and cancellation of licences.

It is key to note that a mining licence or permit is required at various stages of a mining companies life. At Lion Consulting, we have helped various mining companies set up their operations in Tanzania. Our experience in this field includes:-

  • Acted for leading mining companies to ensure compliance of special mining licences, mining licences, prospecting licences amongst other licences under the Mining Act and its regulations.
  • Acted on behalf of Amani Gold in the establishment of their mining operations in Tanzania; and
  • Acted on behalf of Elves Graphite, a Koren graphite mining company establish their presence in Tanzania.

Through the constant change of the mining laws in Tanzania, Lion Consulting advises operators in the mining industry and anyone who wishes to set up their establishment in Tanzania to seek proper advise beforehand, especially after the introduction of local content regulations in the sector.

Market Outlook 2022

With the easing of worldwide Coronavirus restrictions and increased vaccination programs the outlook for Tanzania will be positive for the upcoming year. The International Monetary Fund has also approved USD 657 million in emergency support for Tanzania in order to meet the health and social costs of the pandemic. The GDP growth for Tanzania is estimated to grow above 5% driven by private consumption and the actions of the Government of Tanzania to improve the business climate. The World Bank also expects the economy to grow above the Sub-Sahara Africa average for 2022 which is again a very positive sign for investors. The long-term political stability of Tanzania will also play a huge part in attracting foreign investment.

Lion Consulting anticipates continued increased investment in Tanzania specifically in the energy and infrastructure sectors. The USD 30 billion LNG project is primed to begin as indications from both the Government and the international gas companies involved have announced renewed talks in starting the stalled project. The construction of the oil pipeline from Uganda to Tanga, Tanzania headed by Total also will bring a boom to the sector. Further, Tanzania has also prioritized a USD 3 billion joint venture with a Chinese company for an iron ore and coal mine. A USD 10 billion port project back by China and Oman has also been green light. Finally, a British company has partnered with the government to mine nickel sulphide which is a crucial mineral in the development and manufacture of batteries used in electric vehicles. The company has been issued with the first special mining license in 10 years which shows an optimistic outlook for Tanzania.

The Government has identified and are currently reviewing up to 88 laws that are not considered business friendly. The Government believes that there are too many regulatory authorities in the country that is not favourable to investment and believe in reducing them. Billionaire investors such as Aliko Dangote and Mohamed Dewji have both been encouraged and have stated that the investment climate will continue to be more favourable for businesses.

Lion Consulting has seen an uptick in foreign businesses entering the Tanzanian market practically from Europe and Asia and this can only be seen as a positive sign for continued growth rebound after the damage done by the global pandemic. We remain at your disposal and welcome any queries from businesses or individuals looking to invest in Tanzania as the country looks to rebound from a slowed growth.

Improved Business Environment In Tanzania

The Tanzania Government has pledged to improve the business environment and ease of doing business in Tanzania. This pledge and commitment is aimed at increasing the levels of foreign direct investments into Tanzania[1]. In a show of commitment to this pledge, the government tabled an Amendments Bill for several laws in the on going House session, including the Companies Act and the Non-Citizens (Employment Regulation) Act. The proposed changes are contained in the Written Laws (Miscellaneous Amendments) Bills numbers 2 and 4.  In the proposed amendments by the Written Laws (Miscellaneous Amendments) (No 4) Bill 2021 includes the following:

  1. Proposed to amendments to extend the time limit for non-citizens willing to work in Tanzania from five (5) years to eight (8) years;
  2. The Amendment to allow any company that has been registered with the Tanzania Investment Centre or Export Processing Zone Authority to employ up to ten non-citizens without the need of complying with the rigorous requirements of the Non-Citizens (Employment Regulations) Act;
  3. Amendment to entitle an investor to employ any number of non-citizens for as long as he complies with the quota of 1 non-citizen employed to 10 locals employed, and further justifies to the Labour Commissioner that the nature of his business requires the employment of a large number of non-citizens;
  4. Amendment to ensure that there is a simplified and improved manner of issuing work permits to non-citizen workers as an incentive to foreign and local investors who have decided to employ non-citizens; and
  5. Amendment to enable the Minister to make Regulations which shall regulate the manner and processes of issuing work permits and incentives to investors.

As noted in the Objects and Reasons attached in the Schedule of Written Laws (Miscellaneous Amendments) (No 4) Bill 2021, the proposed changes are explained by the Government as follows:-
Part VIII proposes for Amendment of the Non-Citizens (Employment Regulations) Act. Cap. 436 with a view to ensuring that there is a simplified and improved manner of issuing work permits to non-citizens worker as incentive to foreign and local investors who have decided to utilize non-citizen employees. It is proposed to amend section 12 in order to extend time limit for applicants willing to work in the Country from the current five years to eight years, which, the applications have to be done on a renewal basis from every twenty-four months. Further to that, the proposed amendments empower the Labour Commissioner to attach conditions to work permits with finality effect depending on a number of circumstances, one being the request by the applicant to stay in the country for a specific period of time. It is proposed to repeal and replace section 19 of the Act in order to provide special incentives to investors. The proposed amendments extend the immigrant quota from the current five employees to ten employees who


shall stay in the country working during the whole period of investment. Further that the investor employing ten local employees shall also be entitled to employ one non-citizen employee. It is proposed to amend of section 22 of the Act to enable the Minister to make Regulations that shall regulate the manner and processes of issuing work permits and incentives to investors”.

Lion Consulting does commend the Government of taking this initiative in improving the business environment in Tanzania. We believe that these proposed amendments if passed shall lead to more foreign direct investments in Tanzania.

Company Incorporation Step By Step Guide

Establishing a company in Tanzania is a multi-stage process. The successful establishment of a company requires the submission of a number of documents as well as detailed information provided by the client to Lion Consulting.

In order for Lion Consulting to assist our clients in the best and most efficient manner, we provide a detailed checklist in stages which we ask our clients to provide to us. Once we have all the required information and documentation we ensure all deliverable are swiftly delivered.

Stage 1 – Obtaining a Certificate of Incorporation

Upon clearance of the company name provided by the client, preparation of the memorandum and articles of association as well as relevant company forms they are submitted to the Business Registrations and Licensing Agency.

We aim to deliver a Certificate of Incorporation within 4 working days once we have received all required documentation and information from the client.

Stage 2 – Obtaining a Tax Identification Number Certificate

After incorporation the new company must register with the Tanzania Revenue Authority to obtain a Tax Payer Identification Number. This is again completed once all relevant information and documentation requested is provided to Lion Consulting.

We have this processed within 2 working days.

Stage 3 – Obtaining a Business Licence

Before commencing business activities, the new company will be required to obtain a business licence which is renewable on a yearly basis. Once we have the new company’s objective provided in stage, Lion Consulting will provide a list of the requisite documents and fees applicable.

We aim to process the business licence within 3 working days.

Stage 4 – Obtaining a Value Added Tax Certificate

VAT is chargeable on the supply of goods or services in Mainland Tanzania. In order to obtain a VAT certificate, a company’s turnover must be approximately USD 46,000. This is usually an estimation and in order to process the same a thorough evaluation is conducted by the Tanzania Revenue Authority in order to verify the provided estimation.

We aim to process the VAT certificate within 5 working days.