Tanzania’s Mining Shake-Up: The New Local Content Rules You Need to Know
Highlights:
- Stricter Joint Venture Rules: Non-indigenous companies must now form a joint venture with a partner that is 100% owned by Tanzanian citizens and operates in the same line of business as the goods or services supplied.
- Lowered Procurement Threshold: The value of a sole-sourced contract that requires a contractor to inform the Commission has been drastically reduced from USD 100,000 to just USD 10,000.
- Mandatory Contract Submission: For the first time, entities must submit their actual joint venture agreements to the Mining Commission for approval before commencing mining activities.
- Exclusive Services List: The Mining Commission now has the power to publish a list of goods and services that are exclusively reserved for 100% Tanzanian-owned companies.
- New Sub-Plans Required: Local content plans must now include a Banking Services Sub-Plan and a Procurement Sub-Plan.
Introduction:
On September 12, 2025, the Tanzanian government published Government Notice No. 563, officially enacting the Mining (Local Content) (Amendment) Regulations, 2025. These new regulations are a significant and substantive evolution of the country’s legal framework for the mining sector. They build upon the Mining (Local Content) Regulations, 2018, which were previously amended on February 8, 2019, and July 8, 2022. The 2025 amendments came into force on the date of publication, without a grace period or transitional arrangements, which creates immediate compliance obligations and new strategic considerations for all entities operating in the sector.
Key Changes: A Detailed Comparison
The 2025 amendments introduce several key changes that fundamentally alter the landscape of local content compliance.
1. The Indigenous Tanzanian Company (ITC) Definition and Joint Venture Requirements
Before: The 2018 regulations defined an indigenous Tanzanian company as one with at least 51% of its equity owned by a citizen or citizens of Tanzania. However, a separate provision in Regulation 8(6) required a non-indigenous company seeking to provide goods or services to incorporate a joint venture with an indigenous Tanzanian company, affording it an equity participation of at least 20%. The regulations were silent on the type of partner (individual or corporate) and whether they needed to be in the same business line.
Now: The 2025 amendments codify a much stricter requirement. A non-indigenous company must establish a joint venture with an indigenous Tanzanian company that is wholly owned (100%) by Tanzanian citizens and operates within the same line of business as the goods or services to be supplied. The indigenous company must hold a minimum equity participation of 20%. This change removes ambiguity but also creates new challenges for compliance, particularly for existing ventures.
2. Submission of Joint Venture Agreements
Before: The 2018 regulations required a contractor or other allied entity to submit a local content plan to the Mining Commission before commencing mining activities. The plan was required to specify the indigenous company’s role, equity participation, and the strategy for technology transfer.
Now: The 2025 regulations go a step further by mandating that a contractor, subcontractor, or other allied entity must now submit the actual joint venture agreement to the Commission for approval before commencing mining activities. This gives the Commission a direct and explicit role in vetting the commercial terms of these agreements to ensure they align with the government’s local content objectives.
3. Exclusive Services for 100% Tanzanian-Owned Companies
This is a new provision introduced by the 2025 amendments. It empowers the Mining Commission to publish a list of specific goods and services that are to be provided exclusively by indigenous Tanzanian companies that are 100% owned by Tanzanians. This presents a significant risk for non-indigenous companies whose core business may be included on this list, potentially requiring them to cease operations in those areas.
4. Procurement Thresholds and Plan Content
Lowered Sole-Sourcing Threshold: The 2018 regulations required a contractor to inform the Commission of any proposed contract to be sole sourced or sourced via competitive bidding if its value exceeded the equivalent of one hundred thousand United States Dollars. The 2025 amendments have drastically lowered this threshold for sole-sourced contracts, reducing it to the equivalent of ten thousand United States Dollars. This expands the scope of regulatory scrutiny to a much broader range of contracts.
Expanded Sub-Plans: The 2018 regulations required local content plans to include five specific sub-plans: Employment and Training, Research and Development, Technology Transfer, Legal Services, and Financial Services. The 2025 amendments expand this by mandating the inclusion of a Banking Services Sub-Plan and a Procurement Sub-Plan. This reflects a broader scope of compliance.
Financial Institution Definition: The 2025 regulations also introduce a new definition for a “Tanzanian financial institution,” which was not present in the 2018 regulations. The new 2025 regulations define a “Tanzanian financial institution” simply as:
“a financial institution which is registered in Tanzania under the Banking and Financial Institutions Act (Cap. 396).”(BFIA)
The previous rules required the financial service provider to meet specific local equity ownership thresholds to qualify as “Tanzanian” for the mining sector. This new definition is a shift in focus:
- Expanded Pool: It broadens the category of compliant banks and financial institutions, as compliance is now determined by registration under the BFIA, rather than a specific minimum local shareholding. This allows more large, established, and fully-licensed international banks operating locally to qualify as “Tanzanian financial institutions” for mining projects.
- Regulatory Certainty: It removes the need for mining companies to constantly verify the specific local equity ownership of a financial provider, linking compliance directly to registration and licensing by the Bank of Tanzania (BoT).
New Obligations: Banking Services Sub-Plan
To enforce the use of these newly defined institutions, the 2025 amendments made a corresponding change to the Local Content Plan submission:
- Replaced Sub-Plan: The previous “Financial Services Sub-Plan” has been replaced with two separate sub-plans:
- Banking Services Sub-Plan: This plan outlines how the mining entity will utilize and maintain accounts with the now-defined “Tanzanian financial institutions” for all transactions related to mining activities.
Procurement Sub-Plan: This new plan mandates detailed reporting on all local procurement activities.7
Practical Implications for Mining Companies
The 2025 regulations create a more stringent and prescriptive environment for mining sector stakeholders. Companies with existing joint venture arrangements may need to restructure their shareholding to comply with the new corporate ownership requirements. This process will likely be complex, time-consuming, and may require a new partner search. The absence of specific transitional provisions leaves the fate of existing arrangements in a state of uncertainty.
The new requirement to submit joint venture agreements for approval gives the Commission a powerful tool for oversight, and the lowered sole-sourcing threshold means that even small-scale procurement decisions are now subject to regulatory review. Companies must proactively update their internal processes to ensure full compliance. The potential for a list of exclusive services to be published means that companies must also monitor official communications from the Commission and be prepared to adapt their business strategies accordingly.
To read the Mining (Local Content) (Amendment) Regulations, 2025 click here
Disclaimer
The content of this update is intended for general informational purposes only and does not constitute legal advice. It should not be relied upon without seeking specific legal counsel on any particular matter.
Author Details
The author is Sunday Ndamugoba , Partner, RIVE&Co he can be reached at sunday@rive.co.tz