Chinese firms to build gold smelter, refineries in Tanzania

DAR ES SALAAM, July 24 (Reuters) - Tanzania said on Wednesday it had awarded licences for the construction of a mineral smelter and two gold refineries to Chinese firms, as part of government efforts to generate more revenues from the nation’s mining industry.

Minerals Minister Doto Biteko said the Chinese companies would also soon be awarded licences for mines, each of which would require investment worth more than $100 million.

He did not name the firms or give details about the mining or other projects in the East African nation, Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali.

President John Magufuli banned the export of mineral sand in March 2017, a concentrate that contains silver, copper, gold and other minerals, sparking a $190 billion tax dispute with Acacia Mining, which already has mining operations in Tanzania.

The government invited bids from mining firms to build smelters and refineries, although Tanzania’s chamber of mines has said such projects would not be economical.

Biteko said 37 Chinese companies had expressed interest.

“After carefully assessing the financial capability and history of those companies, we have issued licences for the construction of two gold refineries and a smelter,” he said.

“We will also soon award special mining licences to two companies to build large-scale mines whose individual investment is above $100 million,” he added.

He was speaking in a televised address at a ceremony in Dar es Salaam at which the Kenyan authorities handed back 35kg of gold it intercepted after it was smuggled out of Tanzania.

The government said it had set up 28 mineral trading centres since March to improve revenue collection from small-scale miners.

“Gold worth a total of 136.7 billion Tanzanian shillings ($60 million) has been traded through the new mineral centres since March and the government has collected 7.7 billion shillings royalty and clearance fees,” Biteko said.

Small-scale miners produce around 20 tonnes of gold a year but 90% is illegally exported, a parliamentary report said.

Magufuli said revenue collection from mining had increased over the past two years after his government tightened controls.

The government collected 301 billion shillings in mining revenue in the 2017/2018 fiscal year, a figure that rose to 310 billion shillings in 2018/2019. It aims to collect 470 billion shillings in 2019/2020.

“African countries have not been benefiting from their natural resource wealth, including minerals. Our minerals have been stolen through smuggling or through exploitative mining contracts,” Magufuli said.

Gold exports are a key source of foreign exchange for Tanzania, which exported gold worth $1.549 billion last year, up from $1.541 billion in 2017, central bank data shows.

$1 = 2,295.0000 Tanzanian shillings Editing by Katharine Houreld and Edmund Blair