By Nneka Nwogwugwu
Tanzania government signed an agreement with four mining companies to form joint ventures (JV), a move which is meant to set the stage for Tanzanians to benefit from the country’s natural resources.
The companies born out of the JV – and which are to invest a total of Sh1.755 trillion – are Faru Graphite Corporation, Petra Diamonds Ltd (PDL), Nyati Mineral Sands Ltd and Sotta Mining Corporation Ltd.
The negotiation team’s chairman, Prof Palamagamba Kabudi, said in all companies except the PDL, the government enjoys 16 percent free-carried interest.
For PDL, Prof Kabudi said the government had agreed an issue of shares in the mine’s holding company Williamson Diamonds Ltd (WDL).
The deal with the London-listed miner will increase the government’s interest to 37 percent from 25 percent.
This suggests that deal will reduce Petra’s stake in the mine to 63 percent from 75 percent.
In addition, the two partners have agreed to an economic benefit ratio of 55 percent for the government and 45 percent for Petra.
On the other hand, the government agreed with Faru Graphite Corporation an economic benefit ratio of 52 percent for the former and 48 percent for the latter.
The inking of deals with the four companies is the latest move which defines a new level of the government’s partnership with investors, thanks to its initiatives in creating conducive business environment and negation power when it comes to issues of national interests.
Speaking at the signing ceremony event President Samia Suluhu Hassan said the signing of the agreement to form JVs is a tangible fruit of the review of minerals laws under the stewardship of the late President, Dr John Magufuli.
Further, she added, for the industry to have a meaningful contribution to the country’s economy, value addition should be done here in the country, and not otherwise.
Official data have it that the mining sector’s contribution to the Gross Domestic Product (GDP) is 6.7 percent, but President Hassan was optimistic the figure will change for the better in the near future.
Minerals minister Doto Biteko said: “Today (yesterday) we have written a history. Signing four joint ventures agreements at ago, is a big deal.”
He gave credits to the late President Magufuli and President Hassan for giving a much-needed back up to the mining sector.
Noting that the sector was improving to a better shape, minister Biteko said since President Hassan took power in March this year, the government has issued 20,277 mining licences to investors.
