The East African - - BUSINESS -

Un­happy in­vestors ar­gue that Tan­za­nia does not pro­duce enough ore to make build­ing a do­mes­tic smelter com­mer­cially vi­able. Yet, be­ing Africa’s fourth­largest gold pro­ducer, Tan­za­nia is also a source of graphite, di­a­monds, tan­zan­ite and rare earth min­er­als. Un­der the reg­u­la­tions, the state can force min­ing and en­ergy firms to rene­go­ti­ate con­tracts to give the state at least 16 per cent in projects, ris­ing to 50 per cent in some cases, and raise ex­port roy­al­ties. The move is not so un­usual in Africa. South Africa in June raised the thresh­old for black own­er­ship in min­ers to 30 per cent. In­creas­ing shares of roy­al­ties is also part of a wider global trend that could lead to higher prices. The Philippines, the world’s top nickel sup­plier, and Brazil, which pro­duces gold, cop­per, tin and baux­ite, are mak­ing the same push.

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