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Overview of Tanzania's Mining Operations Public Disclosure Authorized SESA of the Tanzanian Sustainable Management of Mineral Resources Project Final Report May 2013 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Prepared by LUC in association with GEUS & Matrix Development Consultants Project Title: SESA of the Tanzanian Sustainable Management of Mineral Resources Project Client: Ministry of Energy and Minerals, Government of Tanzania Version Date Version Details Prepared by Checked by Approved by Principal 1 21/12/12 Draft Final Report LT, PN, SW, JT LT PN 2 02/05/13 Final Report LT, PN, SW, JT LT, NJ PN, NJ SESA of the Tanzanian Sustainable Management of Mineral Resources Project Final Report Prepared by LUC in association with GEUS & Matrix Development Consultants May 2013 Planning & EIA LUC BRISTOL Offices also in: Land Use Consultants Ltd Registered in England Design 14 Great George Street London Registered number: 2549296 Landscape Planning Bristol BS1 5RH Glasgow Registered Office: Landscape Management Tel:0117 929 1997 Edinburgh 43 Chalton Street Ecology Fax:0117 929 1998 London NW1 1JD Mapping & Visualisation [email protected] FS 566056 LUC uses 100% recycled paper EMS 566057 Contents 1 Introduction 3 Introduction to the Minerals Sector 3 The Sustainable Management of Mineral Resources Project 5 Purpose of the Report 5 2 The SESA Process 7 The Role of SESA 7 Methodology Used 8 3 Background to the Minerals Sector 11 Overview of Tanzania’s Mineral Resource 11 Overview of Tanzania’s Mining Operations 12 Background Context to the Tanzanian Mining Sector 14 4 Stakeholder Analysis 21 Introduction 21 Description of Key Stakeholders 21 Analysis of Stakeholder Roles 28 5 Environmental Issues 34 Key Issues 34 6 Social Issues 40 Key Issues 40 7 Economic Issues 46 Key Issues 46 8 Legislation and Institutional Issues 50 Key Issues 50 9 Workshop Proceedings 55 Regional Workshops 55 National Workshop 62 10 Analysis 64 Introduction 64 Environmental Issues - LSM 64 Environmental Issues - ASM 67 Social Issues - LSM 68 Social Issues - ASM 69 Economic Issues - LSM 73 Economic Issues - ASM 76 Legal, Institutional and Financial Issues – LSM and ASM 78 11 Priorities for Action 82 Introduction 82 Theme A: Finance 84 Theme B: Institutional Structures 84 Final Report 1 07 May 2013 Theme C: Community Development 86 Theme D: Planning 87 Theme E: Awareness Raising 87 Theme F: Monitoring and Enforcement 88 12 Policy Matrix and Action Plan 89 Introduction 89 Theme A: Finance 89 Theme B: Institutional Structures 92 Theme C: Community Development 95 Theme D: Planning 98 Theme E: Awareness Raising 99 Theme F: Monitoring and Enforcement 101 Appendix 1 1 Workshop Attendance and Proceedings 1 Appendix 2 1 National Workshop Attendance 1 Final Report 2 07 May 2013 1 Introduction 1.1 This document forms the final report of the Strategic Environmental and Social Assessment (SESA) of the Minerals Sector in Tanzania. The SESA is a component of the Ministry of Energy and Minerals (MEM) Project for the Sustainable Management of Mineral Resources. Its primary goal is to assist in raising environmental, social and economic standards in the minerals sector by influencing the priorities of the major institutions and the ways in which policy, legislation and regulations are put into effect. 1.2 The Government of Tanzania has a number of aims in undertaking a Strategic Environmental and Social Assessment. These are: • satisfying its own legislation relating to the impact of policies, plans and programmes on the environment and social and local economic welfare; • meeting the requirements of the World Banks’ Environmental and Safeguard policies; and • achieving higher standards of governance, through adopting the principles of good practice in Strategic Environmental & Social Assessment. 1.3 Specific objectives of the SESA are to: 1) Establish the interests and concerns of major stakeholders in relation to current performance of the minerals sector in terms of environmental, social and local economic standards; and 2) Provide recommendations and guidance on: a. Improving environmental, social and local economic performance within the minerals sector; b. Introducing institutional reforms; and, c. Improving governance and social accountability. 1.4 The SESA began in July 2012 and has been divided into five phases of work. • Phase 1: Inception Phase and Situation Analysis • Phase 2: Stakeholder Analysis • Phase 3: Regional Stakeholder Workshops • Phase 4: Action Planning • Phase 5: Reporting 1.5 This report forms the final phase of the project (Phase 5) summarising the work undertaken during the first four phases of the SESA, as a permanent record of progress and to present the recommendations that have come out of the SESA process. Introduction to the Minerals Sector 1.6 Over the last decade there has been a surge in national and international interest in mineral development in Tanzania and other Sub-Saharan African economies. Prospecting and development activity has been stimulated by rising world prices for ferrous and non-ferrous metals, energy minerals including coal, oil and gas and uranium, precious stones and rare earths where world scarcity has prompted high levels of competition. The traditional interests of industrial majors from North America, Europe and Australia have been matched by Eurasian investors including Russian and Chinese companies and their respective governments. 1.7 While metal prices have generally risen faster than overall economic indicators the world-wide recession, which was triggered in 2008, has also depressed trade and construction resulting in Final Report 3 07 May 2013 temporary falls in the price of some commodities. These fluctuations reflect the volatility of the mining and minerals sector and fuel the demands from mining companies for tax concessions and a favourable financial environment. Conversely, many NGOs and Community groups argue that Governments are over-generous in their desire to attract investors and enter into secret contracts which provide inadequate economic returns to those local areas most affected by the development. 1.8 In the 1990’s legal and regulatory frameworks in many countries were ill-equipped to deal with new global financial models and technologies in mining. This led to significant reforms in all continents and there has been significant support from international partners in assisting individual countries to update their mineral laws, policies and regulatory frameworks (for example in Mozambique, Malawi, Uganda and Sierra Leone). Tanzania has, itself, made great progress in repealing the 1997 Minerals Act and replacing it with the 2010 Act (No 10) and also publishing a New Minerals Policy. 1.9 Formulation of new legislation is a critical first step in re-structuring the minerals sector in any country, but international experience shows that follow-up action in expanding staff and strengthening capacity in regulatory authorities and agencies is equally essential. So to, is developing the skills and competence of civil society representatives, NGO’s and the popular and technical media to ensure that debate on all aspects of mineral planning from environmental and social protection to wealth generation takes place in a well-informed, constructive and positive atmosphere. 1.10 The Terms of Reference for this project contain a very significant observation that in Tanzania mineral products have risen from 1% to 52% of all exports over the last decade with an average annual growth rate of 13.74% but the contribution to the economy has remained at around 2.7% (2007 data). This suggests that while mining activity is increasing rapidly in the country, value retention remains poor. 1.11 It is possible to overstate such concerns because mineral development can take time to stimulate other economic sectors and also benefits Gross Domestic Product (GDP) in many other ways through direct and indirect multiplier effects. For example, in Tanzania the creation of new opencast coal mines is providing the potential for increased electric power generation and the expansion of the national grid network which can be highly significant in areas which currently have a relatively poor power infrastructure. However, such figures have to be improved if the minerals industry and government is to reassure local stakeholders, (many of whom have legitimate or perceived social and environmental concerns about adverse consequences of mining on their communities) that local economies will benefit from job creation, improved access and transport and an overall increase in manufacturing and related industrial activity. 1.12 Reference to the Strategic Management of Mineral Resources scoping study1 findings and recent literature on mining activity in Tanzania highlights the nature of social, local economic and environmental concerns which range from restrictions on access to land to pursue traditional livelihoods, involuntary resettlement, security issues and ‘unfair’ labour policies to pollution of water courses, land contamination and conflicts with wildlife. The issues that are cited here have all been raised in recent publications and represent only one aspect of a many-sided debate in which industry and government have equally valid concerns about topics like mine health and safety, taxation and investment strategies. 1.13 It is important to stress here that the role of SESA is to provide an impartial, objective and focused lens through which the views of all stakeholders can be taken into consideration in terms of the scope
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