Summary Notes:

• Minimum Requirements
• Rights Under a Prospecting License & Purpose of a Prospecting License (PL).
• Costs of PLs.
• Renewals of PLs.
• Other Limits on Grants or Renewals.
• Effect of Expiry of PL.

Mining business in the United Republic of Tanzania (“Tanzania”) is governed by the Mining Act CAP 123 R.E 2019 (the “Mining Act”) and the Regulations made thereunder.  The Mining Act is administered by the Ministry of Minerals. The basic concept under the Mining Act is that control over minerals is vested in the Government of Tanzania subject to the Mining Act. Mineral rights are granted under the Mining Act to allow for prospecting, exploration, and mining.

Rights for prospecting for or mining minerals are granted in the form of mineral rights evidenced by licenses issued under the Mining Act. Pursuant to Section 32 of the Mining Act, the Minister for Minerals has power to grant, renew, suspend, or cancel any prospecting licence if the holder fails in a material respect to comply with the Mining Act or the conditions on which the licence is granted. 

Minimum Requirements:

Step 1: Applicant identifies Area of interest Site Plan /Topographical Map/ Geological Info (1:50,000 Scale)

Step 2: Applicant completes and submits a Prospecting License Application Form and supporting documents to the Commissioner for Minerals. The following documents are required in triplicate:

1. Application form (MRF 1) with Coordinates in Arc 1960
2. Map of the area of interest, with reference to a topographic sheet
3. Work Program for the proposed prospecting operation
4. Local procurement plan and training program
5. Particulars of Company: (i) Certificate of Incorporation (ii) Memorandum and articles of Association (iii)Latest audited Accounts of the Company.
6. Evidence of financial capability to carry out the proposed operations.

Step 3: Evaluation of application by the Technical Committee on Mineral Titles Background information of applicant relating to financial capability and technical expertise

Step 4: Recommendation to the Commissioner for Minerals by the Registrar of Mineral Rights Application Evaluation Report

Step 5: The Commissioner for Minerals issues an Offer Letter to applicant with prescribed fees or issues a Rejection Letter Memos/Reports

Step 6: The Registrar of Mineral Rights sends a Recommendation to the Commissioner for Minerals to grant Mineral Right to applicant (a) Letter of acceptance (b) Payment of Fee as stated in the Offer Letter (c) Memos/Reports

Step 7: Commissioner for Minerals reviews and Grants the Mineral Right to Applicant Memos/Reports

Step 8: The applicant obtains an entry Permit from respective local authority body before any work on the concession area can commence. Copy of the Registered and Stamped Mineral Right.

Where there are two (2) or more competing applications for a grant of mineral rights over the same area, the person whose application was first registered under the Mining Act, provided there is no reason for disqualification, would be granted the mineral right.

Rights Under a Prospecting License & Purpose of a Prospecting License (PL):

• The holder of a PL has the exclusive right, subject to the Mining Act and the Regulations, to carry on prospecting operations in the defined prospecting area for minerals to which the licence applies and the holder of a PL, its employees or agents have rights to enter upon the prospecting area and erect camps and temporary buildings and may erect installations in any water forming part of the prospecting area.
• A PL (can be granted only to companies incorporated in Tanzania, which may be owned by locals or foreigners, under the Mining Act to enable only prospecting (exploration) of minerals by the PL licence holder. A PL is the only type of exploration licence available to a foreign owned company like the Company (100% Tanzanian owned companies and Tanzanian citizens expecting to do small-scale mining can both prospect and mine under a Primary Mining Licence, and only Tanzanians can hold PLs for gemstones).
• A PL does not permit mining (extraction of minerals) other than for testing / assay purposes. The idea is that a PL holder has a set number of years (up to nine (9) years, including licence renewals) to explore the PL licence area to determine whether it has sufficient ore body (minerals) to proceed to apply for a Mining License (“ML”) for medium scale mining or a Special Mining License (“SML”) for large-scale mining and, if so, to compile a feasibility study and all other necessary studies and other documents to apply for an SML or ML.  Once an SML is granted, further prospecting/exploration can take place in that SML area, so the Company can still explore on its SML areas for as long as they have valid SMLs.
• SMLs and MLs are usually only granted to “entitled applicants” being the holder of an existing PL over the area (although there is also a way to obtain SMLs and MLs by tender, which is not often used in practice). 

Costs of PLs:

1. Application fees:

• Application for Prospecting licence for metallic minerals, energy minerals and kimberlitic diamond:  USD $ 300 (or TZS 700,000).
• Preparation fees for PL for any minerals: USD $ 300 (or TZS 700,000).
• Licence Renewal: Application fees for renewal of prospecting licence for metallic minerals, energy minerals or kimberlitic diamond: USD $ 300 (or TZS 700,000).

2. Annual Rents:

1. (Prospecting licence for metallic minerals, energy minerals and kimberlitic diamond): for initial period (up to years 1 to 4 inclusive): USD $100 or TZS 230,000 per square kilometre per year.
2. (all prospecting licences) for first renewal period (up to years 5 to 7 inclusive): USD $150 or TZS 340,000 per square kilometre per year.
3. (all prospecting licences) for second renewal period (up to years 8 to 9 inclusive): USD $200 or TZS 500,000 per square kilometre per year.

[Note: may be paid up-front on grant/renewal]

3. Compliance Costs:

• Various fees for searches or registration of any document in the office of the Commission or approval of any document by the Commission.

• If prospecting falls under section 95 or 96 (etc.) of the Mining Act, PL holder may need to compensate occupants of the surface of the tenements.
• Licence Surrender: No filing fee for application to surrender a prospecting licence. 

Renewals of PLs:

• The maximum period for a Prospecting Licence (including renewals) was eleven (11) years, but on each renewal 50% of the area subject to the Prospecting Licence would have to be relinquished (and the previous owner could not reapply for the relinquished area four (4) months – opening this up to the risk that another person would apply for it).
• Today the maximum period for a Prospecting Licence (including renewals) is now only nine (9) years; comprising the initial four (4) year prospecting period, which can be renewed for three (3) years and thereafter a further two (2) years. Section 32 of the Mining Act. 

Other Limits on Grants or Renewals:

• Section 8(8) of the Mining Act provides that a prospecting licence will not be granted to an individual, partnership, body corporate (or any one of the partners, shareholders or directors of a partnership or body corporate) who owns more than 20 (twenty) other valid prospecting licences, unless the cumulative prospecting areas of such other prospecting licences does not exceed 2,000 square kilometres.

Effect of Expiry of PL

• Under section 15(2) of the Mining Act, where a PL (or part of a PL) has been expired or relinquished by the holder under section 32,  for four (4) months from the date of expiry or relinquishment the area of that PL (or part of the PL) will be automatically deemed be a designated ‘vacant area’ during which time the Minister may invite applications by tender (from any person, including a third party)  for new PLs, MLs and/or SMLs, or declare such an area to be exclusively reserved for allocation to small scale miners (PML holders). If the Minister does not act within four (4) months, the area falls vacant.

Section 32 and 15 of the Mining Act were amended by the Written Laws (Miscellaneous Amendments) (No. 3) Act 2022 (Act No. 12 of 2022)  to provide that where a prospecting licence is no longer renewable (and where the Minister has not exercised his right to put the area to tender within four (4) months), the Minister of Minerals may, within four (4) months from the date of cessation of the PL (e.g. expiry), cause the licence area (provided it has not been otherwise been designated  a reserved area by the Minister of Minerals) to revert to the Government of Tanzania.

Disclaimer: This article is authored by Ruwaida Manji, Associate from Rive & Co, a new and innovating law firm as a result of the partnership between ABC Attorneys, Stallion Attorneys and Sepia Attorneys, built on the foundation of trust, credibility, and novelty, offering expert legal solutions. This Article is for informational purposes only and should not be construed as legal advice. It is recommended to consult with a qualified legal professional for advice specific to your situation.