In this updater, we review the legal regime in place for importation and exportation of mineral concentrates in light of the formation of the new body, Tanzania Shipping Agencies Corporation (TASAC) that was established by the Tanzania Shipping Agencies Act 2017 (the TSA Act). We also briefly consider other regulations i.e. the Mining (Minerals and Mineral Concentrates Trading) (Revocation of the First Schedule) Regulations, the Mining (Mineral Beneficiation) (Revocation of the First Schedule) Regulations and the Mining (Mineral Rights) (Revocation of the First Schedule) Regulations.
The TSA Act came into force on 23 February 2018 and the most significant change that affects the mining industry is contained in section 7. The TSA Act gives TASAC an exclusive mandate in relation to clearing and forwarding functions relating to import and export of the following:
- Mineral Concentrates;
- Equipment; and
- Products or extracts related to minerals and petroleum.
It is our internal view that, strict interpretation of the TSA Act means that only TASAC may undertake clearing and forwarding of those items. It is interesting to note that there is no express provision in the TSA Act which allows outsourcing of services but rather there is a restriction under section 50(1) which states that TASAC shall not arrange, outsource or engage a contractor, subcontractor or supplier for procuring services or goods in the course of performing its functions unless the contractor, subcontractor or supplier is licenced or registered by a relevant authority or institution. Our internal interpretation of this section is that TASAC may opt to procure a contractor / subcontractor to perform either of these functions provided they are licenced or registered by a relevant authority or institution.
This would concur with the industry practice for example the Tanzania Ports Authority may operate the port but it may also enter into concessions with private port operators, same as the Tanzania Airports Authority authorising private airport operators to operate Tanzanian airports. It is undoubtable that the public procurement laws will apply if TASAC decides to procure such services.
However, it is worth seeking confirmation from TASAC on this issue, especially since there is a fine of not less than twenty thousand United States Dollars and / or imprisonment of two years should a person be found liable of breaching this provision. Until then, mining and petroleum companies should reconsider their clearing and forwarding arrangements.
Finally, we note that the Mining (Minerals and Mineral Concentrates Trading) (Revocation of the First Schedule) Regulations, the Mining (Mineral Beneficiation) (Revocation of the First Schedule) Regulations and the Mining (Mineral Rights) (Revocation of the First Schedule) Regulations have been gazetted and are now in force. These regulations revoke the first schedules and replace them with new ones. They provide new fees for (amongst others) dealer licences, processing, smelting and refining licences and fees for other licences including prospecting licences, special mining licences and mining licences among others.
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.