Amendments to the Mining Local Content Regulations, July 2022

We wish to highlight the amendments made to the Mining (Local Content) Regulations on 8 July 2022:

The definition of a contractor now made wider to include all persons who have entered into a contract with licence holders within or outside of Tanzania for provision of all goods and services in mining operations.

The definition of mining services made wider as well to include provision of goods and services for the purpose of the mining operations. Prior to this amendment, provision of goods and services was not part of the definition.

Subcontractor is amended to now include all third parties to whom a corporation or a contractor has entered into a contract for provision of goods and services for mining operations. Prior to this amendment, the subcontractor was a person who had entered into a mining contract for the provision of services – this restrictive definition excluded persons who have not entered into a mining contract from being considered as subcontractors.

The effect of amending the definitions of contractor, mining services and subcontractor is to include a variety of vendors who are supplying goods and services to the licence holders and their contractors regardless of the nature of the service or goods being supplied. Accordingly, this leads to extension of the obligation to prepare and submit local content plans to a lot more vendors who had no such obligation prior to these amendments.

The labour commissioner and representative from the immigration department will now be part of the local content committee.

There is introduction of a new provision which states that a contract shall be sole sourced only under the following conditions: if an advertisement for expression of interest was issued for particular goods or services and only one tenderer is suitable for the supply of such goods or services or where there is an urgent demand for the goods or services which could not be foreseen by the licensee, contractor, sub-contractor or other allied entity.

Format for filing quarterly performance reports now published. The quarterly reports must be filed not later than 14 days after the end of each quarter.

Obligation for a contractor, subcontractor, licensee or allied entity to file an annual local content plan to the Mining Commission has been extended from 45 days to 60 days from the beginning of each year.

Undertaking mining activities without the required local content requirements, failure to submit a local content plan, failure to satisfy the content requirements for local content plan and failure to inform the Mining Commission of each proposed contract or purchase order may lead to cancellation of a contract and paying the Mining Commission an administrative penalty of 5% of the value of the proceeds obtained or paying TZS 50 million, whichever is greater.

A person who fails to submit any quarterly or annual performance report within the prescribed time shall be liable to a penalty of TZS 10 million, which shall be payable to the Mining Commission. Continuous breach of this obligation shall lead to a prohibition from participation in any bids until the said entity has complied.

Disclaimer

The views expressed in this paper are those of the author only and should not be considered as an official interpretation, defamatory or interference of any legislation, laws or policies of any country including Tanzania. The contents of this paper should not under any circumstances be reproduced or used without our express written consent. It should not be considered as a legal advice to any of its recipient(s) and should not be relied upon without obtaining further legal advice. We accept no liability for any loss occasioned or suffered due to the contents of this paper.