Summary Note:
• Overview
• Content Plan List
• Why Content Plan
• Environmental, Health and Safety Regulations
• Environmental Compliance

Overview
The Mining (Local Content) (Amendments) Regulations, 2019 (hereinafter referred to as “the Mining Local Content Amendments Regulations”) aim at developing local skills to build a workforce that is skilled and a competitive supplier force in the mining sector. This being the case, the Regulations under Regulation 7 requires all contractors, subcontractors, licensees, or other allied entity carrying out a mining activity to comply with local content requirements.

The Regulations have established the Local Content Committee, which is amongst other things, responsible for overseeing its implementation and ensuring measurable and continuous growth in local content in all mining activities.

According to Regulation 8 (1) of the Regulations, preference in the grant of a mining license shall be granted to Tanzanians. If there is a competition between an indigenous Tanzanian company and a non-indigenous company, first preference shall be given to a local Tanzanian company.
The Regulations as amended by the Mining Local Content Amendments Regulations define an indigenous company to mean a company incorporated under the Companies Act No. 12 RE. 2002 and has at least 20% of shares owned by Tanzanians and has at least 81% of Tanzanians in the executive and senior level position and 100% of Tanzanians in non-managerial and other positions.

For a non- indigenous company to be awarded a mining license under Regulation 8 (2), at least 5% equity participation should be held by an indigenous Tanzanian company. Although, the Minister from time to time may determine the equity participation ratio on a case-by-case basis. This is to provide an exception to Regulation 8(1) on granting a Special Mining License to a non-indigenous company.

For a non-indigenous company to provide goods or services to a contractor or licensee in Tanzania; it will be required to form a joint venture company with an indigenous Tanzanian company after affording such company an equity participation of at least 20%.
The Regulations require a contractor or licensee to submit the Local Content Plan for approval by the Mining Commission. Local Content Plan shall be submitted at the time of making an application to undertake mining activities in Tanzania.
The local content plan should include long-term projections which must be approved and reviewed by the Local Content Committee.

The content plan should contain the following:
i. Employment and training;
ii. Research and development;
iii. Technology transfer;
iv. Legal services and
v. Financial services.

The whole point of the Content Plan is to make sure that:

i. The Licensee holder is willing and able to involve indigenous Tanzanians throughout its mining operations.
ii. To stimulate the development of capabilities of Tanzanian locals so as to encourage local investments and participation
iii. To enable Tanzanian citizens to develop skills subsequently giving the highest priority to local goods and services
iv. To provide efficient and transparent monitoring and reporting system to ensure delivery of local content policy objectives
v. To increase the capability and international competitiveness of domestic businesses.

After receiving the Local Content Plan, the Mining Commission shall within seven (7) days acknowledge receipt and send the same to the Local Content Committee who shall review it and revert to the Mining Commission within sixty (60) days. The Mining Commission may either approve or disapprove the application based on the recommendations from the Local Content Committee. However, if the Mining Commission approves an application, it shall communicate its decision to the applicant within thirty (30) working days of approval. If the Mining Commission rejects an application, it shall communicate its decision with reasons to the applicant within thirty (30) working days of its decision. This is provided under Regulation 11 of the Regulations read together with Regulation 3 of the Mining Local Content Amendments Regulations.

The Licensee is required by law to set up a bidding process for procuring goods and services that gives Tanzanian priority over foreigners; hence contractors are mandated not to award a contract basing only on the principle of the lowest bidder. A Tanzanian company will not be disqualified on the basis that it’s not the lowest bidder.
If a Tanzanian company bid does not exceed the lowest bid by more than 10%, the contract must be awarded to the Tanzanian company. If the bids are equal, the bid with the highest level of local content should be selected. In a case where a non-indigenous Tanzanian company is engaged, it must incorporate a company in Tanzania, operate it from Tanzania and execute its tasks in association with a Tanzanian company.

The contractor is required to submit a Local Content performance report within 45 days of the beginning of each year after commencement of mining activities covering all its projects and activities for the year under review. It must contain a category of expenditures and employment achievements.
The Mining Commission upon receiving the Local Content Performance Report, it’s supposed to assess and review within fifty (50) working days if it’s in compliance with the Regulations.

Disclaimer: This article is authored by Irene Gunze of 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.