After almost a quarter century of socialist rule, Tanzania has adopted new policies aimed at attracting foreign investment. An important contribution is anticipated from the restoration of the mineral industry, which flourished during colonial times but has languished in recent years.
Tanzania has already attracted several junior mining companies. These include Pangea Goldfields (TSE), Trillion Resources (TSE), Caledonia Mining (TSE), Sutton Resources (VSE), Tan Range Resources (ASE), Patrician Gold Mines (ASE) and Serengeti Diamonds (VSE). Most companies have come in search of gold and diamonds.
The United Republic of Tanzania is located on the East African coast, just south of the equator. It was formed in 1964 following the union of Tanganyika and the island of Zanzibar. The capital city is Dodoma, located at the geographical centre of the country. Covering an area of over 945,000 sq. km, Tanzania is about the same size as Ontario.
Originally colonized by the Germans, the mainland of Tanganyika became a British colony after World War I, achieved independence in 1961, and came to be considered the model of African socialism.
For the past 27 years, the country was ruled by the socialist Chama Cha Mapunduzi (CCM – Revolutionary Party of Tanzania). Under this system, executive power rests with the president and chairman of the CCM, while legislative power is vested in the 214-member National Assembly. With a new world order developing subsequent to the collapse of the former Soviet Union, Tanzania has opted for a multi-party system. Elections are to be held in 1995 and, at the present time, there are at least 15 political parties registered.
In 1992 the population was just over 26 million, of which 98% are of indigenous African or Arab origin, with the remainder mainly from the Indian sub-continent.
Although there are more than 120 ethnic groups, friction is rare and no group is dominant; in fact, 97 of them account for only one-third of the population. The largest group, the Sukuma, accounts for only 12% of the population.
In 1984, Tanzania had about 82,000 km of roads. Only a small portion of the total network is paved and many roads are impassable in the rainy season. An extensive road rehabilitation plan, costing US$870 million and co-ordinated by the World Bank, began in 1991. The project is on schedule and expected to be completed by 1996.
The northwestern quarter of the country is underlain by an Archean-aged assemblage of granites and greenstones. These greenstone terrains are similar to those containing important gold mineralization in Southern Africa, Canada and Western Australia. Recorded cumulative gold production from the Tanzanian craton is about 55.8 tonnes.
Highly metamorphosed Proterozoic-aged rocks form mobile belts on each side of the Tanzanian shield and to the south. The western belt hosts several gold, copper and lead deposits. Tin and nickel mineralization has been outlined in a sequence of rocks that overlie the western mobile belt.
Gemstones (sapphire, ruby, tanzanite) are the only minerals of commercial importance in the eastern mobile belt.
Currently, mining accounts for less than 1% of the Gross Domestic Product (GDP). Agriculture is the mainstay, contributing over 50% to the GDP. Fishing, forestry, tourism, manufacturing and service industries account for the remainder of the GDP.
Gold and diamonds were found during the German colonial period, but were never really exploited. Little development occurred under the ensuing British administration until the price of gold increased in the 1930s. In the mid-1930s, Geita Gold Mines developed three mines close to the south shore of Lake Victoria. Two of these, the Ridge 8 and Prospect 30 mines, closed in the 1950s while the main mine at Geita operated until 1966. Collectively, the mines produced about 27.4 tonnes of gold.
Additional gold mines were developed near Buhemba, about 50 km east of Lake Victoria.
Although the country contains 300 known kimberlites, only the Mwadui pipe has been commercially exploited. Since its discovery in 1940 by J.T. Williamson, Mwadui has yielded over 17 million carats of diamonds. The majority are of gem quality, with many fancy colors.
Over the past few years, annual production at the mine, which is owned by the Tanzanian Government and De Beers, has fallen to about 150,000 carats from a high of 1 million carats in the mid-1960s.
Aside from Mwadui, there are only three other medium-scale mining operations currently under way in Tanzania. These include one coal, one kaolin and one salt mine. Most production of gold and gemstones comes from artisanal operations, where productivity is poor.
The mining code has evolved from the one developed by the British during colonial times and is currently under review. Under the present system there are three types of licences:
* Reconnaissance licence – 12-month duration, renewable for an additional year.
* Prospecting licence — 3-year duration, but can be renewed for two 2-year periods. The government sets limits on the size of the concessions, and they are generally issued on a performance basis.
* Mining licence – issued for an initial period of 25 years and renewable for 15-year periods thereafter.
Royalty payments are levied on gross value received for minerals as follows: diamonds – 15%; gemstones – 5%; coal, salt – 2%; gold, silver, platinum, base metals – 3%.
Other key points about Tanzania include:
* Currency: Tanzanian shillings, US$1 = 550 shillings.
* GDP per capita: $140 (1991).
* Inflation: 19% (1992).
* Foreign debt: $5.8 billion (1990).
Be the first to comment on "Tanzania offers opportunities"