Tanzania’s artisanal mining renaissance and its key enablers
Cyrus Njonde, a mining and mineral processing engineer working with artisanal and small-scale gold miners in Kenya and Tanzania, explores the rich tapestry of Tanzania’s mining landscape.
Tanzania – a treasure trove of minerals – is rich in its bounty and diversity; it is known as the 4th largest African producer of gold, trailing South Africa, Ghana, and Mali.1 Beneath its sun-kissed soil lies the essence of a vibrant mining sector, where over 1 million artisanal miners toil with unwavering determination.2 This type of mining – often defined by its low-tech, labour-intensive mineral extraction and processing methods – happening in family groups or cooperatives, extracts gold, diamonds, coloured gemstones and construction materials. Their labour is more than just economic; it is a lifeline for countless Tanzanians, providing livelihoods and acting as a safety net.
In the first three quarters of 2023, the mining sector in Tanzania contributed around 10% to the country’s GDP, bolstering employment opportunities and swelling foreign exchange reserves –aligning with the government’s goal of achieving a 10% GDP contribution from mining by 2025.3 Delving into the heart of Tanzania’s mineral wealth, both challenges and opportunities that shape the nation’s path toward development are uncovered.
STAMICO: Empowering Tanzania’s mining sector
Tanzania’s State Mining Corporation (STAMICO) operates under the Ministry of Minerals and plays a pivotal role in shaping the country’s mineral landscape. As a wholly government-owned enterprise, STAMICO empowers the artisanal and small-scale mining (ASM) sub-sector.
The corporation collaborates closely with geologists to map mineral-rich areas across Tanzania. By disseminating this critical information to ASM miners, it empowers prospectors to make informed decisions about where to focus their efforts. This data-driven approach enhances exploration efficiency and resource utilisation.
Funding is the lifeblood of mining ventures STAMICO provides essential financial support to ASM miners, enabling them to acquire equipment, conduct exploratory drilling and establish sustainable operations.
Capacity building is another critical aspect. STAMICO actively invests in training programmes, workshops, and skills development initiatives. From safety protocols to efficient ore extraction techniques, the corporation ensures that miners are well-prepared.
Additionally, STAMICO collaborates with private companies in joint ventures. These partnerships pool resources for large-scale exploration, driving technological advancements and fostering innovation. The focus on joint ventures aligns with Tanzania’s broader vision for sustainable mining practices.
The commitment to responsible practices reflects a forward-thinking approach. STAMICO’s involvement in critical minerals—such as graphite, lithium, nickel and neodymium – underscores their role in ensuring supply reliability and maximising the value of Tanzania’s mineral resources. The country’s gold production, gemstone reserves and untapped potential in energy fuels further contribute to its mining sector’s significance.
Tanzania has been ranked among 15 African countries which have a progressive system for licensing artisanal and small-scale miners. The approach to ASM is different by jurisdiction and ‘one size cannot fit all’. Zambia and Zimbabwe have recognised ASM, but do not have a clear policy for the sector yet, while Tanzania has embraced ASM and created policy to help manage the sector so that it can contribute to the growth of the mining industry and increase employment opportunities in the country.4
One of the important steps in formalisation is through implementing a zoning technique – dedicating zones/areas to ASM. The process ensures ASM operations areas are delineated from large scale mining (LSM) to optimise, zoning offers better management for ASM sector.
The Ministry of Minerals oversees a robust system for licensing ASM miners, emphasising transparency and community involvement through an online mining cadastre. The rigorous application process for Primary Mining Licenses (PMLs) reflects Tanzania’s commitment to responsible mining. The Mining Commission evaluates applications, focusing on environmental sustainability, safety and community engagement.
Decisive actions by the Tanzanian government enhance the mining sector. The Ministry of Mining recently revoked 227 licenses5 that did not comply with the Mining Act, Chapter 123, emphasising fee payment and documentation.
In April 2024, a new policy mandated comprehensive local mineral value addition plans for Medium-Scale (ML) and Small-Scale (SML) licenses. This strategic move aims to maximise Tanzania’s mineral wealth benefits, boosting the economy.
Tanzania has a substantial number of artisanal miners, now estimated between 1-2 million, directly engaged in mineral extraction. This has led to the establishment of umbrella associations such as the Federation of Mining Associations in Tanzania (FEMATA), Tanzania Women’s Mining Association (TAWOMA), Regional Miners’ Associations (REMAs), and Tanzania Mineral Dealers Association (TAMIDA). These associations advocate for artisanal miners’ rights, facilitate forums to explore opportunities and investments, and support their collective success. For example, FEMATA has organised a mining week in Dodoma this year to connect miners with 3 000 investors and recognise excellence in artisanal mining practices.
Tanzania’s mining sector, anchored by the vital government body STAMICO and robust licensing strategically, receives mining resources from other African nations and countries like China, encompassing equipment, technology and skill transfer. This unique blend distinguishes Tanzania and attracts global investors. For example, Tanzania favours leaching over mercury-based methods in gold processing, leveraging its geological makeup for efficient cyanide and eco-friendly chemical use. The country hosts numerous equipment suppliers and chemical vendors, with substantial imports from China. In 2023, Tanzania imported goods worth USD4.16-billion, including crucial mining chemicals.6 This import approach ensures a reliable supply chain for Tanzania’s mining industry’s chemical needs.
Unlike many other countries, Tanzania successfully navigates conflicts between LSM and (ASM). This balance is evident as companies like Anglo-Gold Ashanti support ASM by commissioning assessments on the gold supply chain in the Geita Region to formalise ASM activities. Barrick Gold Corporation also contributes with innovative technologies, including a pioneering photon assay laboratory in Africa, enhancing mining efficiency and sustainability. This advancement benefits the company and local artisanal miners, providing faster and more accurate analysis of gold, silver and related elements. These initiatives significantly bolster Tanzania’s national mining economy.
Tanzania’s mining sector provides an investor-friendly environment with reasonable prices, private sector participation and efficient taxation. The transparent mineral selling process, spanning from mine to market, boosts investor confidence. Authorised mineral dealers pay government royalties based on mineral value: 6% for gemstones, diamonds and metallic minerals and 1% for gems. Notably, Tanzania boasts an established gold refinery in Mwanza, managed jointly with STAMICO, that targets raw gold from artisanal miners. This move ensures a reliable market for refined gold. The country’s balanced approach to upfront royalties and transparent tax structures supports miners and sustainable industry growth.
Tanzania has established at least 90 gold buying and selling centres dubbed “SOKO LA DHAHABU”. These centres are situated in strategic gold operating regions in Tanzania, ensuring fair pricing and traceability of gold. Miners are required to declare the source of their gold, promoting ethical trade. These government-controlled selling and buying centres are part of the government’s drive to optimise mineral trading to benefit multinationals and small-scale miners, brokers and dealers. The establishment of these centres has bridged the gap between miners and dealers. Now, artisanal miners know where to sell their minerals and at what price as the government sets the minimum allocated prices at the hubs daily.
Tanzania’s approach to local sourcing is not just a policy; it is a strategic decision to strengthen the domestic economy. The country has a robust framework for training programmemes that focus on nurturing Tanzanian talent. By investing in education and skills-building initiatives, Tanzania ensures that its citizens actively participate in the mining sector. These programmes empower local individuals with the expertise needed to drive sustainable growth and innovation within the industry.
An interview with a Tanzania-based mining expert reveals that securing funding for mining operations in the country is not just about finding an investor. It is about finding the right investor. If you are a local artisan in Serengeti and meet an investor willing to fund your operations, it might seem like a cause for celebration. However, the Tanzanian government requires proof of lack of funding from a fellow Tanzanian, the government or a bank before approving foreign financing. This policy ensures that local resources are fully utilised before seeking external assistance, promoting self-reliance and boosting the domestic economy.
Tanzania has made significant progress in regulating the sector, establishing the State Mining Corporation (STAMICO) and introducing transparent licensing processes. However, the level of sophistication in mining practices is still wanting. Much of the mining knowledge and technology used in Tanzania is borrowed from Zimbabwe and South Africa, leading to environmental issues such as land degradation. Despite STAMICO efforts, there is a need for more support and training for ASMs.
Health and safety are significant concerns, especially during the gold rush periods. Cases of mine collapse, often during rainy seasons, are frequently reported. While mining inspectors work closely with resident mining officers to ensure safety, more must be done. The government could consider implementing stricter safety regulations and providing more safety training and equipment resources, especially with the growing number of miners joining the industry.
The environmental impact of mining is a significant challenge. The National Environment Management Council of Tanzania (NEMC) is keen to ensure that the environment is managed during processing. However, more stringent environmental regulations and better enforcement are needed to prevent land degradation and other environmental issues.
Finally, the Tanzanian government’s focus on local content is commendable, with significant strides in local sourcing, skills development and infrastructure investment. However, challenges persist. Local investments are often insufficient, hampering the mining sector’s growth and development. Striking a balance with foreign funding is essential. Carefully calibrated regulations can encourage foreign investment while complementing local resources and talent development, propelling Tanzania’s mining industry forward.
Source: https://www.africanmining.co.za/