December 13, 2017

Tanzania puts more pressure on mining companies

Strict laws, high taxes: Africa’s governments are looking more closely at foreign mining companies. In future, more locals will benefit from the extraction of raw materials. But the strategies are controversial.

Tanzania‘s President John Magufuli does not need any more opponents than he already has. Since taking office, he has contended with critical journalists, lazy officials and the European Union. The temperamental president, nicknamed “bulldozer” by the people for his strict leadership style, is now targeting foreign mining companies.

“We must profit from our God-given mineral resources,” the president said at a rally last month. His parliament made good on his words: At the president’s initiative, a new mining law was passed. In future, foreign companies will have to pay higher taxes. Their operations in the country must be 16 percent locally owned. Existing agreements with the government will be allowed to be renegotiated.

What is more, the British mining company Acacia is in trouble with local financial authorities. It is accused of deliberately downgrading its gold exports in the past to save on taxes. The group asserts that it was not aware of such practices and says it is cooperating fully with authorities. To no avail: Foreign employees are currently not being granted new visas.

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