Samia: 1tri/- to boost country’s gold reserve

GEITA: PRESIDENT Samia Suluhu Hassan has announced that the Bank of Tanzania (BOT) has set aside 1tri/-for a domestic gold purchase programme aimed at boosting the country’s gold reserves.

This initiative is designed to address foreign currency shortages, which have been a major obstacle to the development of various sectors, including mining.

“I assure you, BOT has allocated 1tri/- for purchases, and payments are made within 24 hours, ensuring we are ready to buy gold,” President Samia stated while closing the 7th Mining Technology Exhibition in Geita Region, today.

She emphasized that the implementation of this program is already underway, with amendments made to the Mining Act under Section 59, requiring license holders and mineral traders to sell 20 percent of their gold production to the BOT.

President Samia also revealed that the central bank is offering attractive incentives under the program.

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These include reducing royalty fees from 6 percent to 4 percent, eliminating inspection fees, and providing zero-rated VAT, allowing sellers to claim input tax. Payments by the BOT are made in full upon receipt of the fire assay report from an approved refinery, ensuring swift and efficient transactions.

In addition to the gold purchase program, the President announced that the government has allocated 250 billion shillings as part of a loan guarantee scheme to support mineral buyers, enabling them to borrow and operate more effectively.

“All of this is to ensure that the mining sector grows, and that a certain percentage of wealth remains in the country as a future guarantee,” President Samia explained.

She further underscored the importance of the mining sector to Tanzania’s economy, highlighting its role in improving the lives of citizens, particularly small-scale miners, and contributing significantly to the nation’s foreign currency earnings.

“Last year, the mining sector contributed approximately 56 percent of all foreign exchange earnings, making it the leading sector in this regard. That is why we prioritize this sector,” she added.

The Head of State said the government has also increased the Ministry of Mineral’s budget from 89bn/- for the fiscal year 2023/2024 to 231bn/- for 2024/2025 year, aiming to increase efficiency in the mining sector, including strengthening revenue collection systems and building the capacity of the Geological Survey of Tanzania (GST) to conduct comprehensive mineral exploration across the country.

Currently, she said, only 16 per cent of mined areas have undergone survey. To address this, the government is purchasing equipment to conduct survey nationwide to identify which minerals exist in each region and in what quantities.

“This investment is already bearing fruit. For instance, in 2023, the mining sector’s contribution to GDP rose to 9 per cent, up from 7.2 per cent in 2021. Our target is to reach 10 per cent by next year.

President Samia attributes the increase to various government efforts, including creating a conducive investment environment. Additionally, through State Mining Corporation (STAMICO), they have purchased 15 drilling machines; five have already arrived in the country and 10 are on their way.

The government has also expanded mineral buying centres, with 44 markets in all regions and 103 buying centres. This has facilitated efficient market operations nationwide. In 2023/2024, minerals worth more than 2tri/- were sold through these markets, enabling the government to collect 180bn/- in revenue.

“I acknowledge that this sector still faces challenges, including the continued export of raw minerals, mineral smuggling, unsustainable mining practices and miners lacking access to mining areas.

Going forward, our direction is to ensure Tanzanians benefit more from mineral resources by adding value to the minerals within the country. For gold and silver, we already have machines for refining minerals to 99.99 per cent purity,” said President Samia.

President Samia further said some factories can refine more gold than what is produced locally, presenting an opportunity for Tanzania to invite or attract gold miners from neighbouring countries to bring their gold here for refining.

The government has put in place several incentives to attract foreigners to bring their gold to Tanzania, such as waiving import duties and VAT on imported gold for refining, according to the president.

“I call on our embassies abroad to seize this opportunity and promote it, especially to our neighbouring countries, so they can take advantage of it,” she asserted.

She also invited those interested in partnering with Tanzania in mining and adding value to graphite, cobalt, nickel, copper, iron and other minerals to bring their capital and technology. “This opportunity is available for both domestic and foreign investors, or even in collaboration.”

However, she said there are women and youths in this sector who are unable to expand their operations due to a lack of mining areas, which hinders their efforts.

“Some licence holders have not developed the areas they were allocated and the government has already reclaimed undeveloped areas, which will be redistributed to small-scale miners,” said President Samia.

Chairman of the Federation of Miners Associations of Tanzania (FEMATA), John Bina, said when the BoT programme was introduced, there was a minor disruption, but miners’ leaders, in collaboration with the government they have already resolved the issue.

“Throughout the BoT programme, we have been actively involved with miners nationwide, we have reached a consensus to sell 20 per cent of our mineral resources to BoT as a demonstration of our patriotism,” he said.

Mr Bina said they request a tax exemption for mining equipment imported for small-scale operations. This exemption would enable them to compete more effectively on the global market.

Minister for Minerals, Anthony Mavunde said they have been revoking mining licences held by individuals who were not actively utilising them. This action has aimed to address the challenges faced by small-scale miners who struggle to secure mining concessions.

“To date, we have cancelled 2,648 licences, including 24 large-scale licences encompassing a total area of 4.3 million hectares. Additionally, 54 Tanzanians have submitted applications for mining licences covering an extensive area of 13.4 million hectares,” he said.