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Tanzania’s Formalization of Artisanal and Small-scale Mining

Vast savanna landscapes of Tanzania are fertile ground for many minerals. Photograph by Thabit Jacob

Artisanal and Small-scale mining (ASM) continues to be a major source of hope for millions of peasants and rural entrepreneurs worldwide. Yet, it also poses challenges for states in terms of regulation and capturing resource rents for national development. The sector has been widely studied in social science and has interested me for the past 15 years, ever since I became involved in the Communities and Artisanal Small Scale Mining Initiative (CASM) which operated until 2012, and whose archived material is maintained.  Donors remain interested in this sector through various efforts, most recently, UNDP’s Development Minerals program which exclusively focuses on ASM in the neglected non-metallic industrial minerals. ASM has also come into greater limelight in the gold sector because of concerns around mercury usage for gold processing in ASM. The signing of the Minamata Convention to phase out mercury has led to additional release of donor funds in this arena. The impact of all these activities to improve the development outcomes of ASM remains to be seen. 

In this guest contribution, Tanzanian researcher Thabit Jacob shares perspectives on what has been achieved in his home country in this regard.

Article Contribution by Thabit Jacob

Although there are no official statistics, recent estimates noted by the World Bank suggest over a million people are involved in artisanal and small-scale mining (ASM) in Tanzania. Artisanal miners are dominant in gold, diamonds, coloured gemstones and construction minerals. ASM is both a source of livelihoods to small-scale miners and a source of income to the state.  The importance of ASM was downplayed by the government for many years due to the low taxes generated from the sector. While the country has progressive ASM legislation, its implementation is still a challenge.

Where ASM has come from: Featuring Mining legislation (1929, 1979, 1998, 2010).[1]

The plight of ASM In Tanzania has come a long way. From the first colonial mining law (the 1929 mining ordinance) which preferred large-scale miners and discourage artisanal mining to the 2010 Mining Act which offers a glimmer of hope after many years of neglect. The 1929 colonial law required mining rights holders to demonstrate the ability to raise sufficient working capital and the capacity to operate a mine, a mandatory requirement that only large-scale miners could fulfill.

The 1929 colonial legislation was later replaced by the first post-independence socialist-inspired Mining Act of 1979. The 1979 Act allowed artisanal mining and encouraged formalization of the sector leading to the adoption of the Small-Scale Mining Policy Paper of 1983, which encouraged small-scale miners to supplement their incomes by venturing in mining activities. The 1979 Mining Act was replaced by the neoliberal Mining Act of 1998 which was inspired by a World Bank-supported mining reforms program in the mid 1990s which sought to enable Tanzania to create an investor friendly regulatory framework to boost Foreign Direct Investments (FDI) in the mining. The 1998 Act opened up the mining sector to foreign investments with massive allocation of land to foreign mining companies in the late 1990s and 2000s. Although artisanal miners were mentioned in the 1998 Act, the emphasize was on the need to upgrade and formalize the sector. Allocation of huge mining blocks to foreign multinationals led to conflicts and resettlement when large-scale miners moved into areas with poorly-documented artisanal rights especially in the gold sub-sector.

ASM was officially recognized by the 2009 Mining policy which laid the foundation for the current Mining Act (2010.) The current Mining Act offer more protection and saw the strengthening of artisanal miners’ rights. It also emphasizes the granting exclusive areas for primary licenses to artisanal miners. The Act also provides for confiscation of exploration licenses held for speculative purpose instead of active exploration. Despite the strengthening of artisanal miners’ rights in the 2010 Act, artisanal miners are still vulnerable to violence and abuse by multinational companies with close ties to Tanzania’s ruling elites. They are also prone to land use conflicts and safety hazards. Recent rhetorics to uplift the conditions of artisanal miners has not been accompanied by a clear commitment to improve their conditions.

Lessons and Key concerns

  • Multinational corporations have over the years acquired licenses in areas where artisanal miners have occupied and worked for many years.
  • Apart from land-use rights conflicts with multinational corporations, artisanal miners in Tanzania faces various risks such as occupational accidents in mines, pollution and mercury contamination.
  • Despite its potential for livelihood support, ASM still doesn’t get the respect and recognition it deserves. Artisanal miners are widely considered as invaders (wavamizi in Swahili), criminals and chaotic and disorganized people.
  • Other issues of concerns include the need to strengthen ASM technical and entrepreneurial capacity, widening access to capital and reliable market, geological information and awareness on health and safety hazards associated with ASM. Three deadly accidents involving artisanal miners have been report between January – February 2016.

 Currents efforts to improve the welfare of artisanal miners

Since the election of President John Magufuli in October 2015, the government has come up with various measures to improve the Status of ASM. In January 2016, the President ordered the Ministry of Energy and Minerals to strip a prospecting license from Canadian company Pangea (A subsidiary of Acacia Mining) and return the mining block to 5,000 artisanal miners. The move was hailed as a brave decision in favor of ASM after many years of neglect by the government and abuse by multinational corporations.  The government also plans to build seven centres of excellence focusing on ASM. The role of centres will be to providing training and ensuring ASM access to modern technologies.

Through the State Mining Corporation (STAMICO) and the Geology Survey of Tanzania (GST), the government has embarked on a project which seek to enhance the capacity of artisanal miners in various ways.  This collaboration would provide miners access to market indicators and sales platforms, expert and technical advice on geology, subsidies to boost ASM capital and productivity; and training to improve occupational safety and health. The government is also encouraging artisanal miners to form groups to facilitate networking, exchange of information and joint access to government subsidies, while announcing  a major audit of mining practices across the country in April 2017. Thus Tanzania has positioned itself as the leading player in formalizing the ASM sector with clear development outcomes being monitored along the way. The long-term successful coexistence of large-scale and small-scale mining in the country will need to be carefully evaluated as these nee initiatives unfold.

[1] This discussion has been drawn from our recent working papers on the history and recent developments on land in Tanzania’s extractive industry. For more on the papers, visit https://www.econstor.eu/handle/10419/148326 and https://www.econstor.eu/handle/10419/148327

Comments

  1. Daudi Mmbaga
    Arusha
    October 10, 8:13 am

    Many thanks Prof. for putting together all the necessary details regarding ASM in Tanzania. Lack of finance to scale up ASM projects is very critical because all micro-finance and banks do not understand ASM methodologies and their business models. It is exciting to hear UNDP has recently started to support ASM. I hope to get more details regarding UNDP support on ASM.

  2. Eric Deche
    Curretly Emerald-Australia
    July 29, 8:28 am

    Thank you Prof. This is a great analysis. I believe Tanzania will use these formal structures to promote responsible mining and share there experiences with the rest.

  3. Johann Verster
    South Africa
    May 16, 7:10 am

    Thank you Saleem for the interesting article. Our company, LegadimaRBT has a very keen focus on producing products and methodologies to enhance safety in mining practices in general. I, personally have engaged some of the ASM structures in Zimbabwe and have provided solutions to 2 of the many aspects in the mining and processing of gold ore.
    These 2 solutions are: 1) Safer blasting products and practices and 2) processing of the gold ore without the use of mercury.
    The economic situation in Zim was not conducive to the start of our program, which was a shame. However, we as a company recognise the existence of the ASM`s and the fact that it is very important to improve not just production, but more importantly the H&S aspects in their daily lives. We will be very happy should a country like Tanzania wish to liaise with us and share information.

  4. Dr A.Massawe
    Dar es Salaam
    May 13, 4:31 pm

    I think the talk of ‘’ The Act also provides for confiscation of exploration licenses held for speculative purpose instead of active exploration. ’’ is unfounded and highly counterproductive due to the fact that, yes, most holders of many prospecting licenses in Tanzania are the unfunded Tanzanian and foreign geologists and other explorers trying to earn through the continuing acquisition of prospecting licences over prospective grounds in Tanzania and their promotion (the Act calls speculation) for the well funded and experienced mostly foreign explorers to come to buy in, finance and carry out the actual exploration for the benefit of all stakeholders; and that more than 99% of the prospecting licences they are earning foreign exchange for themselves and the country and its government in the form rents, fees, exploration funding through the promotion the Act labeled bad speculation are over grounds which don’t have mines or profitable mineral deposits to mine. Moreover, most of the foreign exploration companies spending on exploration for the benefit of the country on more than 99% of the prospecting licences issued by the government which won’t give them mines wouldn’t have been here in the absence of the promoters the Act labeled speculators of prospecting licences who are bringing them in.