Tanzania: Mortgage Of A Mineral Right And Mining In Wildlife Conservation Areas

Last Updated: 19 July 2016
Article by Peter Kasanda, Michael Strain and Amalia Lui

In this month's briefing, we look at the process to mortgage mineral rights and undertake mining operations in Wildlife Conservation Areas in Tanzania.

Legal Basis

The Mining Act of 2010 (the Mining Act) is the basic law which governs all mining and mineral activities in Tanzania. The Wildlife Conservation Act of 2009 (the Wildlife Conservation Act) is the principal act of parliament providing for all wildlife related activities.

A: Mortgage of a Mineral Right

Holders of Mining Licences, SpecialMining Licences and Primary Mining Licences (Mineral Rights) may mortgage their Mineral Rights to a financial institution, bank or any other person as a security for funds advanced to the mineral rights holder. The Mining Act does not expressly use the word 'mortgage' however it uses the term 'assign' which includes the right to mortgage or charge mineral rights. A mortgage of Mineral Rights is subject to obtaining the prior written consent of the licensing authority, however no such prior written consent is required if:

  • the mortgage or charge is to a financial institution or bank as security for a loan or guarantee;
  • the assignment is to an affiliate where the obligations of the affiliate are guaranteed by the holder of the mineral rights or by the parent company of the holder of the mineral rights (an affiliate for this purpose means a company which directly or indirectly controls or is controlled by the holder of the mineral rights); or
  • the mortgage or charge or assignment is provided in favour of another person who is considered to be the holder of the Mineral Rights i.e. where a Mineral Right is jointly owned by more than one person.

The person applying for consent to mortgage or charge Mineral Rights is required to submit to the Ministry of Energy and Minerals (MEM) an application in the prescribed form as well as the following certified copies of documents:

  • application letter requesting for consent and giving summary of the transaction;
  • executed Mortgage Agreement;
  • executed Loan Agreement or letter of offer of a loan facility signed by the parties;
  • certificate of incorporation and memorandum and articles of association, if the holder of the Mineral Right is a corporate body;
  • copy of identification of the holder of the Mineral Right, if an individual;
  • incorporation documents or copy of identification card of the mortgagee;
  • copy of the Mineral Rights being mortgaged; and
  • payment of the relevant taxes including stamp duty at the Tanzania Revenue Authority (TRA) and the respective agreements being stamped by TRA.

The application should be submitted to MEM in case of Mining Licences and Special Mining Licences and to the Zonal Mines office in the case of Primary Mining Licences.

Points to note:

  • A Primary Mining Licence, cannot be mortgaged to a person who is not a Tanzanian, or to a company which is not owned 100% by Tanzanians.
  • If the Mineral Right being mortgaged is owned by a corporate body, the mortgage should also be registered at the Business Registrations and Licencing Agency (BRELA) and a certificate of creation of charge should be obtained. The application at BRELA should be submitted using BRELA Form No. 96 and should be accompanied by a copy of the mortgage agreement and the prescribed fee.
  • It is possible to engage a security trustee which can be a bank, a financial institution or any other person e.g. a law firm to hold the Mineral Right being charged/ mortgaged on behalf of the lender. If the security trustee is a bank or a financial institution, no consent will be required from a licensing authority. However if the security trustee is another person e.g. a law firm, prior consent from the licensing authority to mortgage/ charge the Mineral Right will be required.

Once the consent from the relevant authority has been obtained, the parties can proceed to lodge an application to mortgage the Mineral Right at the MEM or Zonal Mines Office by submitting certified copies of the following documents:

  • receipt as proof of payment of the prescribed fee
  • consent letter
  • form no. MRF 13
  • the mortgage agreement
  • letter of offer, loan agreement or any other agreement showing what the mortgage/charge is for
  • application letter stating in summary the nature of the transaction
  • incorporation documents of the mortgagor and mortgagee if corporate bodies
  • identification documents for the mortgagor or mortgagee if individuals
  • mineral rights licences which are being mortgaged/charged
  • valid business licence
  • proof of payment of the relevant taxes

B: Mining in Wildlife Conservation Areas

A wildlife conservation area includes national parks, game reserves, game controlled areas and the Ngorongoro Conservation Area. The Wildlife Conservation Act restricts any person from collecting sand, prospect or mine in any wildlife conservation area however the person may prospect or mine in a wildlife conservation area if the undertaking involves prospecting for or mining oil, gas or uranium. Hence mining or exploration in a wildlife conservation area is allowed if:

  • the mining or exploration is for uranium i.e. no other minerals will be mined in the wildlife conservation area;
  • the holder of the Mineral Rights has undertaken environmental impact assessment as required by the Environmental Management Act of 2004;
  • protection cost has been paid by the holder of the Mineral Rights as prescribed in the regulations made under the Wildlife Conservation Act;
  • concession fee has been paid to the Minister responsible for wildlife; and
  • the Government of Tanzania is the initiator of such undertaking.

In support of the Wildlife Conservation Act, the Mining Act provides that the holder of Mineral Rights shall not undertake mining activities in a wildlife conservation area without obtaining the prior written consent from the Ministry of Natural Resources and Tourism (MNRT).

However there is a lacuna in both laws because neither the Mining Act nor the Wildlife Conservation Act provides a clarity in the situation where Mineral Rights have been ranted by MEM within a wildlife conservation area yet the same area covers hunting blocks which have been granted to other persons by MNRT. The Wildlife Conservation Act allows a person to apply for hunting blocks for commercial purposes, while in some cases MEM may grant Mineral Rights over areas which fall within the hunting blocks granted by the MNRT.

Due to this lacuna, over the years Mineral Rights holders and the companies holding hunting blocks have entered into agreements in which Mineral Rights holders pay compensation to companies holding hunting blocks and in return the holders of hunting blocks do not undertake hunting activities in areas falling within the boundaries of the Mineral Rights holders. This has led to strong opposition in the Tanzanian parliament where it was argued that holders of hunting blocks have authorised mining companies to enter and mine within wildlife conservation areas without proper authorisation from the relevant government authorities. In response to this, MNRT imposed a restriction that no hunting block owners are allowed to enter into such agreements with owners of Mineral Rights unless such agreements have been submitted, reviewed and approved by the MNRT. This has been the practice to-date pending the implementation of the regulations which will clearly provide as to how such situations should be dealt with.

Mortgage of a Mineral Right and Mining in Wildlife Conservation Areas

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions