Tanzania: Why Perceptions Audit On Mining Is Timely
23, 2012 (allAfrica) -- A NEW audit designed to gauge how the public perceives
the contribution of the mining sector to the economy, launched by the Tanzanian
Chamber of Minerals and Energy (TCME) is timely.
It will seek
for the opinions of key groups and individuals on the Tanzanian mining industry
and its impact on the economy, communities and the environment.
perception audit is amongst its members, industry stakeholders and other
interested parties and the information collected will be used to shape the
Chamber future communication and engagement activities. The Chairman of the
TCME, Mr Joseph Kahama said the perception audit is essential because the
mining sector is an integral part of the Tanzanian economy and will continue to
be for a considerable period of time.
regularly interacting with key stakeholders like politicians, civilsociety
groups, industry players and the general public, through tools such as this
perception audit, the TCME is ensuring it plays its part in creating a
sustainable mining industry in Tanzania," said Mr Kahama.
comes following statistics showing that foreign firms have invested a total of
$5 billion between 1997 and 2010, minerals exports between 2009 and 2011
reaching $4.55 billion, and the government earning $196 million in taxes and
royalties. However, total mineral exports between 2000 and 2011 are twice the
total investments in the mining sector. The straightforward questionnaire
covers a number of key areas which are affected by, and have an effect on the
mining industry. He said anyone interested in sharing their views can easily do
so via www. tcme.or.tz/questionaire on the TCME website, while Stakeholders can
also share an offline version of the questionnaire, which is available from the
1994, the TCME represents the interests of its members in the Tanzanian
minerals sector. Acting as a voice for the industry the Chamber plays a pivotal
role within the sector as a mediator between the mining investment community
and key stakeholders, most notably the Government of Tanzania and the public.
With close to 60 members, the Chamber represents the broadest spectrum of
relevant players in the mining industry, including small-scale miners, service
providers, and international mining companies of all sizes.
are involved in a range of activities within the mining sector from exploration
to drilling and production. In the last 15 years, the contribution of the
mining sector to the economy has grown, averaging at 7 per cent but poverty is
said to remain high among the people living around minerals areas, despite the
surge in mineral exports amounting to $10 billion in the last one and half a
decade. This audit comes at a time when the country has also found vast cases
of gas as a resource.
process towards a Gas law has scaled up with a Gas Act draft now already
submitted to the chief Parliamentary draftsman (CPD) office. Documents seen by
'Sunday News' show that after this stage, it will be forwarded to Parliament for
discussion in a move that signals preparing of the economy for recent more
discoveries of the resource. In a Joint energy sector review document, it shows
that in government efforts "to prepare the economy to handle huge foreign
investment inflow" in gas production projects, the Ministry of Energy was
asked to oversee drafting the law and strategy in their immediate action plans.
It also shows
that by July this year, the ministry of energy and minerals, TANESCO, Rural
Electrification Agency, and Tanzania Petroleum Development Corporation (TPDC)
will formulate the natural gas strategy which will also involve the regulator
in strategy formulation and preparation of master plan recommended. Responding
to the government's move to legislate the sector, a university of Dar es Salaam
energy economist Dr Lenny Kasonga hailed it yesterday, noting that the law
would create a system in which competitive forces and independent regulation by
EWURA would ensure that Tanzania's natural gas resources were developed in the most
efficient manner possible.
central feature of such a law should be to identify those aspects of the
natural gas sub-sector for competition, and introduce market forces to those
aspects of the sub-sector," he said. Dr Kasonga said the Gas Act would
stimulate investment in the sub-sector, which would in turn produce lower
prices. It is understood the Gas Act draft calls for competition where
feasible, primarily in the production and supply of natural gas as a commodity
and also promotes third party access to essential infrastructure.
In a letter he
sent to the International Monetary Fund (IMF) in December, the minister for
Finance Mustafa Mkulo said that to prepare the economy for major gas
investments, the government was drafting a natural gas master plan as well as a
gas and petroleum revenue management Bill. The Bill would cover the budget
treatment of gas revenue. Also the tax regime would be reviewed to ensure
adequate cover for the gas sector.
This would go
hand in hand with the development of staff expertise in the TRA on tax issues
associated with the development and exploitation of gas. And recently, a
principal geologist at the staterun Tanzania Petroleum Development Corporation
Meshack Kagya said the country will hold an oil exploration licensing round for
16 offshore blocks starting in September this year. Norwegian oil firm Statoil
has said its gas discovery announced in February, the biggest ever made in the
country, held up to 5 trillion cubic feet of gas, or about 891 million barrels
of oil equivalent (boe) in proven reserves.
exploration reports have also indicated the presence of oil in Mozambique.
Similar results are expected in Tanzania soon.
increasing whereby this year about 23 wells will be drilled off Tanzania,
Mozambique and Kenya almost double the number in 2011, according to research
from Morgan Stanley. The reports for huge gas deposits have drawn the interest
of the world's largest oil and gas exploration companies such as BP, Petrobras,
Statoil, Exxon Mobil and Shell. Experts say Tanzania will be a focus of
drilling this year.
up with Petrobras last October to explore Tanzania's coast. BP had been in
talks on East Africa projects with Ophir. Ophir and its partner BG Group Plc
have so far found about 4 trillion cubic feet of gas in Tanzania. Ophir, which
is buying Dominion Petroleum Ltd, will be joined by Mubadala Oil & Gas of
Abu Dhabi to explore Block 7 in Tanzania. The company plans to import LNG to
meet the Persian Gulf nation's growing demand for gas. Statoil ASA, Norway's
largest oil company plans to drill a well this year at an exploration block in
Tanzania in partnership with Exxon Mobil.
the amount of investment in gas exploration and infrastructure will run into
billions of dollars. Petrobas and Ophir Energy Plc alone are spending close to
$2 million (Sh3.1 billion) per day in Tanzania. Incentives Tanzanian government
last June abolished the Value Added Tax on petroleum products imported to be
used as fuel by gas and oil exploration companies.
Tanzania may eventually rival Qatar and Australia as the world's biggest
suppliers of liquefied natural gas (LNG). The East African deposits found so
far are large enough to justify construction of at least eight LNG production
trains, according to estimates by the companies.