The wording of the new law from the Government Notice No. 286 of 2016, published on 7th October 2016, has a new look and effect on the Mining sector in Tanzania, This is "Mining (Minimum Sharing and Public offering) Regulations.
These regulations has two-way effects on the holders of Special Mining License (SML) these means the new regulations do not have any exceptions for "special conditions". The regulations are acting retrospectively and here below is the detailed extract.
SHAREHOLDING REQUIREMENTS AND OBLIGATIONS
The regulation requires, the minimum local shareholding requirement of a holder of Special Mining License shall be thirty percent (30%) of the total issued and paid up shares. Local Shareholding in relation to a natural person, means shares held by a citizen of the United Republic, and a body corporate means shares held by a company incorporated under the Companies Act in which citizens or the Government of the United Republic has beneficial interest in at least fifty percent (50%) of the ordinary shares of such company or other body corporate established or incorporated in the United Republic under the provisions of any written law.
There is an obligation that, minimum local shareholding shall be obtained through the Capital Market and Securities Authority, in compliance with the Capital Market and Securities Act.
A licensee referred in the regulations, whose license was issued prior to commencement of these regulations, shall, within two years from the date of commencement of these Regulations, ensure compliance with the local shareholding obligation.
That, a licensee referred herein, whose license is issued after the commencement of these regulations shall, within one year from the date of grant of a Special Mining License, ensures compliance with the local shareholding obligation.
That, a holder of special Mining License shall list its shares on a stock exchange within the United Republic in accordance with the applicable listing rules of the stock exchange.
Minimum Shareholding Requirement
Obligations for Local Shareholding
Obligation for Listing
Though it is required for a holder of a Special Mining License to issue a Minimum of 30% of local shareholding, The Regulations has provided that, "Where the holder of a license has failed to secure the minimum local shareholding due to an unsuccessful public offer, the Minister may, upon application of the holder of a license granted under the Act (The Mining Act) and on the recommendation of the Authority, grant a waiver to the holder from the minimum local shareholding requirement.
The above waiver, is appearing to be available exception which the mining company operating under special mining license, can undertake mining activities in Tanzania under Special Mining License without local shareholding.