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Tanzania |
ECONOMY
Small-scale mining has in recent years become a major employer of Tanzania’s youth, thus increasing the mining sector’s export earnings tremendously
The government now acknowledges the role of the mining industry in developing the national economy, and raising family incomes, in particular among workers in the small-scale mining sector. Estimates indicate that the number of people engaging in small-scale mining has increased from a few thousand in the 1980s to nearly a million at present, mostly involved in gold and coloured gemstone mining.
Data from the Tanzania Chamber of Mines, show that exports of coloured gemstones rose by 50% in the past ten years, reaching US$ 8,127,000 in 1998.
Past concerns that earnings from small-scale mining hadn’t elicited corresponding attention from the appropriate government authorities, have now ended. It seems the government has woken up and is paying proper attention to this sector of the mining industry. The government is now embarking on establishing mining technology and demonstration centres, with a view to improving productivity and preserving the environment. It has prepared specific programmes in order to develop necessary skills for small-scale miners.
However, following the 1998 Mining Act — which led to significant investment attraction, thereby making Tanzania one of Africa’s leading gold producers, two problems seem to have cropped up.
Who gets the profits?
There’s an on-going hostile relationship between small-scale miners and more powerful miners and dealers; also, between small-scale miners themselves. A second problem comes from the general public — there’s a general feeling that the revenue collected by the government does not correspond to the value of the gold or tanzanite mined. Also, investors feel they are not getting a fair «slice of the cake» and the small-scale miners themselves, feel they are being treated unfairly when it comes to sharing out the profits. Dr. Haji Semboja, a senior researcher with the Economic and Social Research Foundation (ESRF) says revenue-sharing between the government and foreign investors needs to be reviewed, with both the value of the mineral deposits as well as the value of investments committed, being taken into account. Indeed, Tanzania’s President Benjamin W. Mkapa has said it would be unfair of the government to demand an equal share of the profits with an investor who has committed huge capital as well as technology into the mining project.
Mining firms need to collaborate with the government to improve infrastructure such as roads, the communications network, water and power supply in respective mining areas, using revenue collected from the sector. This would further help to diversify economic activities in those areas, thus attracting investment in other sectors. Excessive reliance on revenue from the mining sector in these areas would consequently diminish.
Somehow or other, because of the importance small-scale mining has started to play in the national economy, adequate solutions must be found for the present misunderstandings and hostile relationships existing between small-scale miners and big foreign investors.
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