Golden Star
Australian mining companies in Tanzania have applied for a halt in share trading following the government’s decision to introduce new laws.

The legislation recommends changes to the legal framework governing the natural resources sector in Tanzania.

These new laws could have a severe impact on businesses going forward.

According to a statement by the Tanzania Information Services, as quoted by Reuters, “Parliament has passed two (laws) legislation – the Natural Wealth and Resources (Permanent Sovereignty) and the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) bills.”

There will be three bills in total covering natural resources contracts, sovereignty and amendments to existing laws. They ultimately give government the power to renegotiate or dissolve contracts.

The third bill is still in parliament and is due to be published shortly.

Acacia Mining has been most hard-hit at present by legislative changes and queries with the government and remains in heavy discussion to resolve the issues.

Both the Tanzania Chamber of Minerals and Energy and a mining industry lobby called for a delay in passing new legislation, noting the need for further consultation.

Despite this the legislation was fast-tracked.

The Tanzania Chamber of Minerals and Energy states: “The chamber is concerned at the lack of stakeholder consultation prior to the publication of this proposed legislation, and the short notice set aside for consultation, given the material impact it will have on almost every area of the mining industry and on all stakeholders in the industry, including local communities, employees, local suppliers, local contractors and investors.

“This does not support the Public Private Partnership drive and past reviews of the legislative framework where a thorough process of consultation has been carried out in order to ensure that stakeholders have full opportunity to present and debate their views and concerns in order to help ensure that the best outcome for all is reached.”

“The chamber calls for a reasonable period of time for consultation with all stakeholders to allow consideration of the proposed changes, so that detailed comments and submissions can be made to allow the government assess and take the submissions into account before these bills are debated in parliament.

This is critical in ensuring that any changes proposed to existing legislation in natural resources can be informed by the views and practical insights and experiences of the industry itself, in order to have a positive impact on the effective operations and contributions of the mining industry in Tanzania.”

Feature image credit: ©Allan Cedillo Lissner / GlobalAware