East Africa plans tighter laws to protect minerals
Miners in a Tanzanian mine. East Africa has vast mineral resources, but the benefits do not reflect on the countries' economies. Photo/FILE
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The bloc’s director for productive sectors, Nyamajeje Weggoro, said although the region had vast mineral resources, the partner states had not realised the benefits.
Analysts, however, warned that lack of a comprehensive policy on mining was denying regional economies a chance to enjoy the proceeds of the business.
The EAC official said tighter laws would boost the performance of regional mining sector and provide more jobs.
The East African Community is crafting joint tighter laws to regulate the region’s mining sector following increased interest by global exploration firms.
The bloc’s director for productive sectors, Nyamajeje Weggoro, said although the region had vast mineral resources, the partner states had not realised the benefits.
“It is crucial to put in place appropriate regulatory and policy frameworks to ensure efficient development of downstream and upstream strategic industries that rely on the mining sector,” he said.
Several international firms are currently prospecting for minerals such as gold, titanium and diamond in the region.
“Such frameworks should aim at enabling the region to maximise on the resource rents from mineral extraction but at the same time facilitate the creation of new employment opportunities through investment in value addition and mineral processing industries,” Dr Weggoro said.
Recent discovery of large reserves of gold in western Kenya continues to attract foreign interest with several international mining firms either moving to grow their output or buy into existing businesses.
The coastal strip, especially around Kwale, has also caught the attention of international firms following the discovery of rare minerals such as niobium and titanium that is an important pigment for industrial, domestic and artistic applications.
Neighbouring Tanzania also has robust activity in its mining sector a thanks to the vast reserves of minerals such as gold.
Analysts, however, warned that lack of a comprehensive policy on mining was denying regional economies a chance to enjoy the proceeds of the business.
“The East African region is endowed with immense natural resources in various forms. However, these resources which indeed have high potential to generate wealth and contribute to social-economic transformation of EAC economies, remain largely underutilised, while in some cases are over exploited without commensurate gains accruing to the people of region,” Dr Weggoro said.
Kenya is now developing new mining policies to regulate the sector that has largely been overlooked over the years. The ministry of Environmental and Natural Resources is working on a Mining Bill 2011 that is expected to revamp the industry.
Tanzania is pushing for tighter tax policies for mining firms operating within its market. The government wants mining companies operating within its borders for more than five years to start paying a corporate tax of 30 per cent, citing rising prices of precious metals at the world market.
The EAC official said tighter laws would boost the performance of regional mining sector and provide more jobs.
“The development of strategic regional industries, particularly, extractive and mineral value addition industries are anticipated to spur the growth of downstream industries, create backward and forward linkages across the region, generate multiplier effects and position the region on the path of sustainable long-term growth,” he said.
The Democratic Republic of Congo is currently battling illegal exploitation and sale of its minerals following a long period of civil strife, reflecting the kind of pitfalls that may arise from poorly regulated mining sector.
