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Thursday, August 6, 2020

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Parliament passes laws on renegotiation of mining, gas contracts in Tanzania

Tanzania’s parliament passed two laws on Monday allowing the government to force mining and energy companies to renegotiate their contracts, despite pleas from the mining association for more time.

Businesses have complained that they feel President John Magufuli is unfairly squeezing them through a strict interpretation of tax laws, increased fines and demands they rapidly list on the local stock markets.

Magufuli has said the reforms will increase transparency and revenues.

There are three bills in total covering natural resources contracts, sovereignty and amendments to existing laws and they could allow the government to renegotiate or dissolve contracts.

“Parliament has passed two (laws) legislation – the Natural Wealth and Resources (Permanent Sovereignty) and the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) bills,” the state-run Tanzania Information Services said in a statement.

The statement did not mention the third bill, which is also in parliament, but the justice minister Palamagamba Kabudi said on Friday that all three would be passed this week.

The bills follow months of wrangling between mining companies and Magufuli’s government. The government has repeatedly targeted Acacia Mining, majority-owned by Barrick Gold. Acacia has most of its productive assets in Tanzania and its share price has nearly halved since March.

The government had submitted the bills to parliament on Thursday and the legislation was fast-tracked despite calls from the mining industry lobby, the Tanzania Chamber of Minerals and Energy, for a delay to allow more consultations.

“The chamber is concerned at the lack of stakeholder consultation prior to the publication of the proposed legislation and the short notice set aside for consultation, given the material impact it will have on almost every area of the mining industry,” the chamber said in a statement on Monday before the bills were passed.

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