• Mining in Tanzania falls under the Ministry of Energy and Minerals ("Ministry").
• Regulated by the Mining Act, Act No.14 of 2010 (Mining Act) and various subsidiary legislations.
• Ministry responsible for licencing and controls mining activity.
• Under the Mining Act, the following Mineral Rights may be granted:
  Prospecting licence- open to both Tanzanian and Non Tanzanians, with initial grant period being 4 years; 1st renewal for further 3 years; 2nd renewal further 2 years and thereafter a discretionary renewal of a further maximum 2 years.
  Gemstone prospecting licence - granted for 1 year and non renewable.
  Retention licence - if commercial development not possible, retention may be granted for 5 years, and renewed for a further 5 years.
  Special mining licence- investment of over Usd 100M.
  Mining licence - investment of over Usd 100,000 but below Usd 100M.
  Primary mining licence - exclusively for Tanzanians and investment below Usd 100,000.
  Processing licence - granted for a period not exceeding 10 years and subject to renewal.

Smelting licence- granted for a period not exceeding 25 years and subject to renewal.
Refining licence- granted for a period not exceeding 25 years and subject to renewal.

• Gemstones Mining Licences can only be granted to Tanzanians, unless the development requires special skills, technology or high levels of investment whereby the applicant should then be a company owned atleast 50% by Tanzanians.
• Royalty payable on the gross value of minerals produced:
  Uranium, gemstone and Diamond - 5%
  Metallic minerals (incl. copper, gold, silver and platinum group) at 4%
  Gem - 1%
  Other minerals including salt and building materials - 3%.
  
• Mineral Right holder must get consent from the Ministry should there be a change of control of the Mineral Right holder's company.
  
• The Minister to make regulations prescribing minimum shareholding requirement and procedure for selling shares to Tanzanian nationals by listing on the Dar es Salaam Stock Exchange (as of Feb 2012 such regulations have not yet been made).

• Development Agreement "MDA") to be entered with the Government by applicants for Special Mining Licence to:
  - Guarantee the fiscal stability of a long term mining project.
  - Address environmental matters including posting of a rehabilitation bond.
  - Address dispute resolution.
  - Guarantee procurement of goods and services available in Tanzania.
  - Ensure employment, training and succession planning.
  - Agree upon Free Carried Interest ("FCI") and government participation
  (currently there are no precedents on the amount of FCI the Government
  has entered into).
• The MDA is valid for the duration of the Special mining licence and is subject to periodic performance review by parties after every five years.

Special Mining Licence
Application to be made in prescribed form and should include:

• Period for which SML sought, which may be the estimated life of the ore body indicated in the feasibility study report, or such period as the applicant may request whichever period is shorter.

• Comprehensive statement of minerals sought.
• Programme for mining operations.
• Proposed plan for relocation, resettlement and compensation of people in mining proposed area.
• Environmental Certificate issued under the Environmental Management Act 2004.
  
• Details of infrastructure requirements.
  
• SML shall be renewed by the Minister for a period not exceeding the estimated life of the remaining ore body and with variation of conditions of the licence.

General Protection

• Tanzanian law offers guarantees against nationalization and expropriation.
  
• Tanzania is a member of both the International Centre for Settlement of Investment Disputes and Multilateral Investment Guarantee Agency.
• Free/Unconditional Transfer of Capital, Profits and dividends.
  
• Investors have the right to make transfer payments in freely convertible currency.

To get an electronic copy of the Mining Act 2010 please write to us on info@fbattorneys.com with subject "Mining Act 2010".