A refresher on requirements for service providers to the mining sector in Tanzania

The Mining Act R.E. 2019 (the Act) and the Mining (Local Content) Regulations 2018 (the Regulations) provide for minimum local content shareholding requirements for entities operating in and servicing the mining sector. In this article, we set out the varying positions under each, the Act and the Regulations and for ease of understanding, we have provided a flowchart which identifies the three options for compliance in relation to shareholding for service providers.

Position under the Act

Mining companies are required to comply with the requirement to give priority to local companies according to the Act.

A local company is defined as a company or subsidiary company incorporated under the Companies Act R.E 2002, which is either:

1. one hundred percent owned by a Tanzanian citizen (note, single shareholder companies are not allowed in Tanzania, so we understand this to mean Tanzanian citizens); or
2. a company that is in a joint venture partnership with a Tanzanian citizen or citizens whose participating shares are not less than fifty one percent.

Position under the Regulations

Mining companies are required to comply with the requirement to give priority to indigenous Tanzanian companies according to the Regulations.

An indigenous Tanzanian company is defined as a company incorporated under the Companies Act R.E 2002 that has:

1. at least twenty percent of its equity owned by a citizen or citizens of Tanzania; and
2. has Tanzanian citizens holding at least eighty percent of executive and senior management positions and one hundred percent of non- managerial and other positions.

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