Overview
This memorandum provides an overview of the principal mining licences available under the Mining Act, 2010 (as amended) in Tanzania and outlines key regulatory requirements applicable to investors seeking to undertake mineral exploration and mining activities. Mining activities in Tanzania are regulated by the Mining Commission, which is responsible for the administration of mineral rights. In addition to obtaining the appropriate mineral licence, investors must comply with environmental regulations, local content requirements, and other statutory obligations.
1. Prospecting Licence (PL)
A Prospecting Licence is issued to companies seeking to explore an area to determine whether it contains commercially viable mineral deposits. Under Tanzanian law, prospecting licences are granted only to companies incorporated in Tanzania.
The licence is granted for an initial period of up to four (4) years. It may be renewed twice: the first renewal for a period not exceeding two (2) years and the second renewal for a further period not exceeding two (2) years. After the second renewal, the licence cannot be extended and the area reverts to the Government, making it available for other applicants.
Holders of a Prospecting Licence are required to conduct exploration activities in accordance with an approved prospecting programme and must notify the Mining Commission of any discovery of mineral deposits that may have potential commercial value. The licence holder must also comply with environmental, health and safety, and reporting obligations.
Application Procedure
The application process for a Prospecting Licence begins with identifying an area that is free from conflicting mineral rights. The applicant must conduct due diligence to ensure that the proposed area is available and suitable for exploration.
The applicant then prepares and submits Form MRF-1 to the Mining Commission together with supporting documentation including a prospecting programme, location map, environmental management plan, proof of financial capability, and company incorporation documents. Once submitted, the Commission reviews the application to assess the applicant’s technical and financial capability and to ensure compliance with regulatory requirements.
If the application is approved, the applicant receives a Letter of Offer requiring payment of the prescribed fees. Following payment and completion of the required formalities, the licence is issued and registered by the Mining Commission.
2. Mining Licence (ML)
A Mining Licence is issued for medium-scale mining operations typically involving capital investment between USD 100,000 and USD 100 million. This licence authorizes the holder to undertake mineral extraction and associated activities within the licensed area.
A Mining Licence is granted for a period of up to ten (10) years and may be renewed for an additional ten (10) years. Renewal applications must generally be submitted at least six (6) months before the licence expires.
3. Special Mining Licence (SML)
A Special Mining Licence is issued for large-scale mining projects with capital investment exceeding USD 100 million. The licence is granted for the life of the ore body or a period of twenty-five (25) years, whichever is shorter, and may be renewed for successive periods of twenty-five (25) years.
The issuance of a Special Mining Licence involves a more extensive approval process and typically requires Cabinet approval before the licence is granted.
Government Participation
Under the Mining (State Participation) Regulations, 2022, the Government of Tanzania is entitled to acquire not less than sixteen percent (16%) non-dilutable free carried interest shares in the capital of a mining company holding a Mining Licence or Special Mining Licence. This interest is granted without the Government contributing financially to the capital of the company and may increase depending on negotiated fiscal arrangements.
4. Primary Mining Licence (PML)
A Primary Mining Licence is intended for artisanal and small-scale mining operations, often undertaken by Tanzanian citizens or locally owned companies. The licence is issued for a period of seven (7) years and may be renewed for successive seven-year periods.
Foreign investors are generally not permitted to directly hold Primary Mining Licences but may participate through structured arrangements such as joint ventures, equipment leasing agreements, or technical service agreements with Tanzanian licence holders.
Local Content Requirements
The mining sector is subject to local content requirements which aim to promote participation by Tanzanian companies and citizens in mining activities. Recent amendments to the Mining (Local Content) Regulations require non-indigenous companies to enter into joint ventures with indigenous Tanzanian companies that are wholly owned by Tanzanians and operate in the relevant line of business. In such arrangements, the indigenous partner must hold at least twenty percent (20%) equity participation.
In addition, contractors and subcontractors must submit their joint venture agreements to the Mining Commission for approval prior to commencing operations. The Commission may also publish lists of goods and services reserved exclusively for indigenous Tanzanian companies.
Environmental Compliance
Environmental compliance is a key requirement for all mining projects in Tanzania. Under the Environmental Management Act, investors must conduct an Environmental and Social Impact Assessment (ESIA) before commencing mining operations.
The ESIA process is administered by the National Environment Management Council (NEMC). The applicant must submit a Project Brief describing the proposed project and its potential environmental impacts. Following review and approval of the ESIA, NEMC issues an ESIA certificate which is generally required before a mining project can proceed.
In addition to obtaining the ESIA certificate, licence holders must implement environmental management plans, monitor environmental impacts, and comply with applicable environmental regulations throughout the life of the project.
Conclusion
Tanzania offers a structured legal framework governing mineral exploration and mining activities. Investors must obtain the appropriate mineral rights, comply with environmental and local content requirements, and adhere to ongoing reporting and regulatory obligations. Early engagement with regulators and proper structuring of mining investments is critical to ensuring compliance and successful project development.
