This briefing looks at the launch of the OMCTP and provides a summary of the key mineral rights available in Tanzania. We also take a look at the manner in which mineral rights can be transferred.
Developments in the mining sector in Tanzania
On 12 August 2014, the Ministry of Energy and Minerals in Tanzania (MEM) announced the launch of the OMCTP. The OMCTP is a geo-portal which will allow holders of mineral licences and stakeholders to apply for mineral rights, maintain existing rights, submit reports and production returns electronically and make online payments using mobile phones.
Some of the benefits of OMCTP include:
- facilitating MEM to swiftly improve the delivery of service and increase transparency in the administration of the mineral sector;
- reducing backlog of applications, especially those experienced in the Regional Mines Offices, by allowing applicants to record applications directly;
- allowing for the online management of mineral rights renewals, transfers and extensions;
- authorising for payments to be submitted and monitored through the OMCTP with the funds being deposited directly into MEM’s bank account;
- monitoring all reports submitted electronically through the OMCTP;
- facilitating the Cadastre Officers with more time to process applications and follow up on compliance issues; and
- allowing for the timely update of information such as change of address and contact numbers by registered clients.
Current mineral rights holders are required to submit the following documents for validation by identified licensing officers (Licensing Officers) at the office where the mineral licences were issued:
- A duly completed OMCTP registration form which will become available from MEM’s website as of 1 September, 2014;
- For Division A and B mineral licences holders, submission of the completed registration form at MEM should be accompanied by the original licence documents and proof of payments from the last renewal. Where licences were acquired through transfers, the transfer certificate should also be attached;
- Whereas, Division C and D mineral licence holders shall submit the completed registration form together with the original licence and proof of last renewal payment to the relevant Zonal or Resident Mines Office. Likewise, transfer certificates must also be attached for in the case of transferred licences; and
- Clients who wish to be represented by agents to operate the OMCTP will require an original power of attorney endorsing such agents to be submitted together with the completed registration form.
Upon presentation of the documents, the validation process will be carried out as follows:
- Preparation of a Legal Entity History Report (LEHR) - the Licensing Officers will generate a LEHR which details the particulars of licences held by the respective licence holder. The LEHR will cover information such as particulars of licences held, overdue payments and overdue reports;
- User Registration- the Licensing Officers will only proceed to capture the User Registration once the data has been updated and will notify the OMCTP applicant should more information be required;
- Creation of User Profile- the Licensing Officers will create a User Profile in the OMCTP upon validating that the information has been duly updated;
- Activation of User Profile- the registered users will receive an email notifying them of the User Profile activation; and
- Creation of a password- the registered users will then be required to create an initial password before access on the OMCTP is enabled.
Notably, other users who do not currently hold mineral rights but wish to register in the OCMTP may submit a completed registration form accompanied by identification documents.
The table below highlights the differences between the various types of licences and the manner in which they can be transferred
Comparison of licences for mineral rights:
Click here to view the table.
Primary mining licence (PML) transfers
A PML is exclusively reserved for Tanzanians and requires the lowest capital investment of less than US D100,000. PMLs only cover small scale mining operations in the country.
The steps which are involved in the transfer of a PML include:
- determining the entity to which the PML will be transferred (e.g. individual or corporate body);
- verifying that the PML will be transferred to a Tanzanian entity;
- ensuring that there are no encumbrances on the PML before the transfer (e.g. debts);
- drafting the deed of transfer;
- finalizing the transfer documents (e.g. tax clearance certificates); and
- submitting the transfer application to the relevant licensing authority (i.e. the Minister of Energy & Minerals, Commissioner for Minerals or Zonal Mines Officer).
The transfer fee for a PML is currently USD 200 as per the Schedule to the Mining (Mineral Rights) Regulations 2010 (the Mining Regulations). The transfer process may take up to two weeks depending on the availability of the licensing authority and the accuracy of the transfer documents.
Prospecting licence (PL) transfers
A PL gives the holder the right to search for a variety of minerals and gemstones pursuant to section 28 of the Mining Act 2010 (the Act) a PL can be held by both Tanzanian and foreign entities.
The transfer of PLs is similar to that of PMLs. However, section 8(6) of the Act states that a PL cannot be transferred where the transferee owns more than twenty valid PLs, unless the cumulative prospective areas of the PLs do not exceed 2,000 square kilometres.
The transfer fee for a PL is currently USD 3,000.
Mining licence (ML) transfers
An ML caters to medium scale mining operations where capital investment is between US D100,000 and US D100,000,000. Section 8(3) of the Act gives Tanzanians the exclusive right to mine for gemstones under an ML. Nevertheless, this right is limited by section 8(4) which states that the Minister may grant an ML to a foreign entity if the mining area requires specialised technology or a high level of investment. In such circumstances, the foreign entity is entitled to no more than fifty percent of the shares in the company that holds the ML. The remainder must be ultimately controlled by Tanzanian nationals.
Compared to the transfer of PMLs and PLs, written consent from the Minister must be obtained prior to the transfer of an ML. However, there are exceptions to this requirement which are listed in section 9(3) of the Act as follows:
- transferring to an affiliate, where the obligations of the affiliate are guaranteed by the transferor or by a parent company approved by the Minister;
- transferring to a bank or other financial institution by way of mortgage or charge given as security for any loan or guarantee; and
- transferring to another entity that constitutes the holder of the ML.
As in the case of PLs, the transfer fee for a ML is currently USD 3,000.
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.