Miners now want the government to lift its ban on exports of all concentrates and ore metallic minerals as the two parties engage in a dialogue on the future of the industry.
A statement issued by the Tanzania Chamber of Minerals and Energy (TCME) said Thursday that some mines face imminent closure following the ban due to loss of revenue from the sale of concentrates, adding that “this negative development will also adversely affect the government’s revenue collection targets”.
“Following the ban, the taxes and royalties collected by the government from the mining sector will be significantly reduced,” said the statement signed by TCME chairman Ami Mpungwe.
Already, Acacia Mining has said that its revenues will fall considerably due to the ban which directly affects its Bulyanhulu and Buzwagi mines.
Share price down
The price for Acacia Mining’s shares slumped by 10 per cent on Monday, just two days after the government announced the ban while talks for a merger with a Dutch company also mining in parts of Africa stalled due to concerns that emerged when the ban in Tanzania was made public.
The government – through the Ministry of Energy and Minerals – issued a statement banning all exports of gold and copper concentrates, effective from March 2.
According to TCME however, there is a need for the government to conduct a feasibility study to determine the viability and preferred practical mechanism to develop smelting capability in the country.
A feasibility study, TCME said, was conducted by Tanzania Minerals Audit Agency (TMAA) in 2009 and updated in 2011, but with advancement in technology, another feasibility study may be required to accommodate latest technological advancements in smelting. “The outcome of the study, if positive should determine the roadmap for development of the smelting industry in the country,” the statement said.
It added that by issuing the ban notice, the government was trying to address some concerns, noting, however, that the chamber’s disappointment stems from the fact that there was no prior consultation with affected stakeholders before the ban was officially announced.
Discussions, TCME argued, would have made it possible to address the concerns without having significant negative impact on existing operations and future investment in the mining sector.
Miners contend that if upheld, the ban will have far-reaching social and financial consequences on the affected companies and the nation at large.
According to the miners, while the government’s decision is good and would allow the government to increase revenue and create more employment, mining companies should be allowed to continue to export their products for smelting until at such a time when there is an operational smelter in the country.
The Commissioner of Minerals in the Ministry of Minerals and Energy, Mr Ali Sameja, said there was still room for engagement between the government and industry players.
“I don’t think there is any problem. Of course the ban is there but we can still find an amicable solution to this matter,” he said.