In this month’s briefing we look at the application procedure for processing and smelting/refining licences and the obligations imposed on the holders of these licences.

Legal basis

The Mining Act of 2010 (the Mining Act) is the basic law which governs all mining and mineral activities in Tanzania. There are a number of regulations made under the Mining Act including the Mining (Mineral Beneficiation) Regulations of 2010.

A. Application for a Processing Licence

Holders of Mining Licences, Special Mining Licences and Primary Mining Licences (Mineral Rights) are allowed to process their minerals within or outside of the mining area hence they are not required to apply for a separate processing licence. However if the holder of Mineral Rights wishes to process minerals other than minerals extracted from his mining area, the holder will be required to apply for a processing licence. In addition any other person who wishes to separately engage in the business of minerals processing will be required to obtain a processing licence from the Commissioner for Minerals (Commissioner).

A person applying for a processing licence is required to submit to the Commissioner an application in the prescribed form along with the following documents:

  • Receipt as proof of payment of the prescribed fee
  • Environment management plan
  • Environmental impact assessment certificate
  • Process plant layout
  • Procurement, haulage and processing inputs plan
  • Compensation, relocation and resettlement plan, if land will be acquired for the processing plant
  • Succession plans for any foreign expatriates
  • Identification documents in relation to the land where the processing plant will be set up
  • Identification documents of the applicant, if a corporate body, the memorandum and articles of association, certificate of incorporation and registered address should be provided
  • Such other documents and information as may be required by the licensing authority

B. Application for a smelting and refining licence

Any person who wishes to engage in the smelting or refining of minerals is required to apply to the Minister for Energy and Minerals (Minister) for a smelting or a refining licence. Holders of Mineral Rights are not allowed to engage in the smelting or refining of minerals on their own without applying and obtaining a smelting or a refining licence from the Minister.

A person applying for a smelting or refining licence is required to submit to the Minister an application in the prescribed form along with the following documents:

  • Receipt as proof of payment of the prescribed fee
  • Environment management plan
  • Environmental impact assessment certificate
  • Smelter or refinery plant layout
  • Waste disposal management plan
  • Compensation, relocation and resettlement plan, if there will be land acquisition for setting up a processing plant
  • Succession plan from the foreign expatriates to local Tanzanians
  • Identification of land where the refining or smelting activities will be undertaken
  • Identification documents of the applicant, if a corporate body the memorandum and articles of association, certificate of incorporation and registered address should be provided
  • Such other documents and information as may be required by the licensing authority

The Minister may issue a smelting or refining licence for a duration not exceeding twenty five years and the holder of the licence may renew it.

Renewals

The application for renewal of a processing licence or smelting/refining licence is done through submitting prescribed forms to the Commissioner or the Minister respectively. The application for renewal should be accompanied by evidence of turnover of the last ten years in the case of processing licences and 25 years in the case of smelting/refining licences.

The renewal process is fairly straightforward however if the holder of the respective licence is in breach of any of its legal obligations, it will affect the renewal process and in some cases renewal may be rejected until the breach is rectified.

C. Rights of the holders of processing and smelting/refining licences

Holders of processing and/or smelting/refining licences have the right to:

  • Carry on processing, smelting or refining operations in the specified area
  • Acquire, dispose or possess the minerals specified in the licence and carry on business as a dealer licence holder
  • Export minerals specified in the licence
  • Erect the necessary equipment, plant and infrastructure for the purposes of operations and the transporting, dressing or treating of the minerals in his possession

D. Obligations of the holders of processing and smelting/refining licences

Holders of processing and smelting/refining licences are required to:

  • Employ and train citizens of Tanzania and implement succession plans for expatriate employees in accordance with the Tanzanian labour laws
  • Utilize an implementation plan for the procurement of goods and services available in Tanzania
  • Stack or dump any mineral or waste products in accordance with Tanzanian environmental laws
  • Keep a sign board with the words “holder of processing, smelting or refining licence” (as applicable) and also display the licence in the place of business
  • Keep a register in respect of each relevant mineral and mineral products
  • Send to the Commissioner for Minerals quarterly reports
  • Any other activity as may be required by the Commissioner for Minerals

E. Challenges

The major challenge in undertaking processing and smelting/refining licences is locating suitable land to undertake those activities. The applicant is required to disclose to the licensing authority the proposed area for setting up the processing and smelting/refining activities and the licencing authority may in its discretion require that the activities should be undertaken in another area. It is recommended that the person seeking to establish a processing or smelting/refining plant should first consult the licensing authority with the proposal of the project prior to lodging the official application. The previous discussion with the licensing authority will assist the investor to locate an area which is likely to be acceptable to the licensing authority.

Mining events in Tanzania

Tanzanian Explorers’ Club

The Tanzanian Explorers’ Club (TEC) is for people working in, or affiliated with, the Tanzanian mineral exploration sector and provides an informal environment to facilitate networking within the industry and information sharing between key participants in the Tanzanian mining sector. If you are interested in joining the next TEC meeting please email Clyde & Co’s mining team to find out further details.