By The Ministry of Minerals
The mining sector is a vital pillar of Tanzania’s economy. While large mines owned by domestic and foreign companies, as well as joint ventures between the government and foreign companies, contribute significantly, small-scale miners remain a critical element in the development of this sector.
Despite using outdated and inadequate technology and facing limited capital, small-scale miners significantly contribute to national revenue, job creation, and the improvement of many Tanzanians’ lives.
In this article, we will analyze the contribution of small-scale miners to Tanzania’s mining sector and the steps taken so far by the government and various stakeholders to support this important group to grow.
Contribution of Small-Scale Miners to the Mining Sector in Tanzania
In recent years, the contribution of small-scale miners to the mining sector’s revenue has been rapidly growing. Statistics from the Ministry of Minerals show that the contribution of small-scale miners increased from five percent (5%) before the amendment of the Mining Act in 2017 to nearly forty percent (40%) in the 2022/2023 fiscal year. This increase is a clear indication of their importance in this sector. Small-scale miners have significantly contributed to the production of various minerals such as gold, Tanzanite, and other gemstones, thereby greatly increasing government revenues.
Employment and Social Development from Small-Scale Miners
Small-scale miners have provided employment for thousands of Tanzanians, especially in rural areas where job opportunities are scarce. These jobs help people of different genders earn an income to sustain themselves and improve their living conditions. Besides employment, small-scale mining contributes to community development by supporting social services such as schools, health centers, and other essential infrastructure. Many areas with small-scale mining activities have seen rapid development in the provision of social services due to the direct contribution of small-scale miners.
Issuance of Licenses to Small-Scale Miners and Control of Mineral Smuggling
The government has created an enabling environment for small-scale miners through the issuance of licenses and the control of mineral smuggling. The increase in the issuance of mining licenses from 5,094 licenses in the 2018/2019 fiscal year to 10,067 licenses in the same period from July 2023 to March 2024, of which 6,934 are for Small Mining (PMLs).
On the other hand, the establishment of Mineral Markets in Tanzania has helped control mineral smuggling and increase transparency in the Mining Sector. Currently, there are 42 Markets and 100 small purchase centers across the country.
These markets have helped establish systems to monitor and manage the mineral trade, including digital technologies that help record mineral information from miners to buyers.
Also, the establishment of these markets has helped regulate prices by providing competitive and fair reference prices, similar to the global market, thus reducing the incentive for people to smuggle minerals to sell at higher prices in the black market. Additionally, these markets have increased government revenue through various fees and charges imposed at these markets.
Efforts of Cooperation Between Small-Scale Miners and Financial Institutions
A major challenge facing small-scale miners is the lack of capital and modern technology. The government, through the State Mining Corporation (STAMICO), has taken steps to enable small-scale miners to obtain loans and capital in collaboration with financial institutions. Agreements between STAMICO and banks like CRDB, KCB, and NMB have been catalysts for financial institutions and built trust with small-scale miners. This cooperation has enabled small-scale miners to obtain loans at low-interest rates and thus purchase modern equipment and operate more efficiently.
For instance, in the period from July 2023 to March 2024, a total of TZS 187 billion was loaned to small-scale miners, compared to TZS 145 billion loaned in 2022.
Training for Small-Scale Miners and Technology Development
STAMICO has organized a program to provide training for small-scale miners across the country. This training aims to build the capacity of small-scale miners to use better and modern technologies to increase productivity in their mining activities. Cooperation with the Tanzania Geological and Mineral Research Institute (GST) has also helped in obtaining crucial geological information that enables small-scale miners to work more efficiently.
Through Vision 2030: Minerals are Life and Wealth, GST aims to use modern technology to conduct high-resolution geophysical surveys using unmanned drones to assist small-scale miners in obtaining detailed information on mineral deposits.
Challenges Facing Small-Scale Miners
Despite the significant contribution of the small-scale mining sector, it faces many challenges, including a lack of capital and modern technology. Many small-scale miners cannot afford modern mining equipment, leading to the use of inefficient tools that are not productive in mining.
To address the technology challenge for small-scale miners, the government through STAMICO has already purchased five drilling rigs worth TZS 2.22 billion and plans to purchase 10 more rigs to reach a total of 15 rigs for small-scale miners.
Drilling rigs have brought significant improvements to small-scale miners in several ways, including increasing efficiency in mining, allowing deeper and safer mining compared to traditional methods, and reducing production costs and time. Overall, drilling rigs have improved working conditions, increased productivity, and increased income for small-scale miners.
Government and Other Stakeholders’ Efforts to Empower Small-Scale Miners
The government has taken various steps to enable small-scale miners to address their challenges. Through the Mining Commission, the government has created an enabling environment for small-scale miners, including simplifying the issuance of licenses and providing education on safe and productive mining.
Other efforts include training visits organized by the Ministry in collaboration with the Federation of Miners Associations of Tanzania (FEMATA). For example, in 2023, small-scale miners made a special training visit to China, where they had the opportunity to visit factories manufacturing mining and mineral processing equipment. In this visit, the miners gained skills, experience, and learned about new technology.
The growth of the small-scale mining sector in Tanzania has been impressive enough that some countries from Sub-Saharan Africa are requesting to come and learn about the management and operation of the mining sector, including small-scale mining.
The contribution of small-scale miners in Tanzania is significant and cannot be overlooked. They provide employment, increase national revenue, and contribute to community development. The government, through the Ministry of Minerals and its related institutions, continues to create an enabling environment and provide the necessary support for small-scale miners to contribute more to the development of the Mining Sector and the economy as a whole.
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