Tanzania seeks government shareholding in new mines law

By George Obulutsa

DAR ES SALAAM (Reuters) - Tanzania plans to include a clause in its new mining law allowing the government to own shares in firms extracting what it considers strategic minerals, its energy and minerals minister said on Tuesday.

The mining sector is Tanzania's second largest foreign exchange earner after tourism, having earned $1.08 billion in 2008, up from $983 million a year before.

The east African nation is due to revise the mining law passed in 1998, later this year. The law will also compel mining firms to buy goods and services locally when they are available.

Critics have long complained that benefits from the lucrative sector were not benefiting the common citizen.

The law currently allows the government to hold no less than 25 percent in companies mining gemstones like diamond, tanzanite and rubies, but is silent on other minerals.

"In the new law....The government will have the authority to take shareholding even if it is 10 or 15 percent in minerals that the government deems strategic. That is better than having none at all," William Ngeleja told reporters at a minining sector meeting.

Ngeleja said the move would not apply retrospectively to existing companies, adding the government would decide on a case-by-case basis what mineral it considered strategic.

"It is not something automatic, for example, gold to us is strategic, so let's have some shares in the mining company," he said.