Tanzania Plans State-Run Board to Handle Mining-Permit Requests

March 21 (Bloomberg) -- Tanzania may “soon” appoint a state-run board to handle mining permits including a backlog of applications from companies including African Eagle Resources Plc and Uranium One Inc., said a senior government official.

Tanzanian lawmakers changed the way the mining industry is managed in 2010 by passing a law that raised the royalty paid on minerals to 4 percent, from 3 percent, and gave the government shareholding rights in future projects. Tanzania vies with Mali to be Africa’s third-largest gold producer, after South Africa and Ghana. It also has the world’s only known tanzanite deposit at the foot of Mount Kilimanjaro, Africa’s tallest peak.

“The Mining Act 2010 requires a mining advisory board to be established to review mining development agreements and renewal or issuance of new permits and licenses,” Ally Samaje, acting minerals commissioner, said by phone yesterday from Dar es Salaam, the commercial capital. “The process of constituting that board is ongoing, and it could be established soon.” He didn’t specify a timeline.

London-based African Eagle’s projects in Tanzania include a nickel exploration program at Dutwa, about 100 kilometers (62 miles) east of Mwanza on Lake Victoria. Uranium One, a Toronto-based explorer, is seeking to develop the Mkuju River site, located about 470 kilometers southwest of Dar es Salaam.

Apart from a special mining license, Tanzania must also give environmental clearance for the Mkuju River project situated in the Selous Game Reserve, which is designated by the United Nations as World Heritage Site, said Samaje.

To contact the reporter on this story: David Malingha Doya in Dar es Salaam via Nairobi at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.