"Stage Set to Renegotiate Mining Deals"

As the dust is settling after the government agreed to resolve its dispute with Acacia Mining through discussion, the stage is now set for renegotiation of the mining deals that have been denying the country of its fair share from its mineral resources...Following a release of reports by two Presidential committees that investigated mineral exports by Acacia Mining, the head of Barrick Gold, Acacia's largest shareholder John Thornton, flew in to meet President John Magufuli where they agreed to negotiate a resolution for the escalating dispute over Acacia Mining operations in Tanzania.

The context of the dispute is increasingly typical of Africa's mining industry. The government is seeking more tax revenue from a foreign mining firm that was initially wooed into the country by generous tax concessions. The state also wants to generate more value and jobs by smelting Acacia's concentrates domestically, rather than abroad. Though richly endowed with mineral deposits, Tanzania has not obtained its fair share of its mineral riches thanks to mining contracts which granted mining companies with generous deals in terms of taxes and royalties.

And this situation reflects the reality of the mining industry in Africa where countries earn little from their mineral resources. Former Bostwana president, Festus Mogae provides the context of signing of poor contracts which have seen countries earning little from their mineral riches. Speaking at a meeting of the Africa Development Bank (ADB) in December 2008, he said most mining contracts in Africa were negotiated in the 1980s and 1990s when low world prices and high political risks discouraged foreign investments in the continent's mining sector.