History of the mining sector
Mining in Tanzania dates back to the pre-colonial era when Arab and local traders mined and sold the country’s natural resources including gold, copper, iron, and salt. The first commercial mining for gold was undertaken in the area surrounding Lake Victoria under the German colonial administrations in the 1890s. The estimated total value of minerals, mainly gold and mica, produced during 34 years of German administration (1884-1918) was between Shs 7 million and Shs 10 million.
During the 1920s and 1930s a number of British and South African mining operations opened and diamonds were discovered in the Mwadui area. However, mining activity subsided during the Second World War, during which prospecting for gold was banned.
Following independence in 1961 the mining sector was increasingly brought under the direct control of the state and public institutions such as the National Development Corporation (NDC) and STAMICO. It was not until the late 1980s that the government embarked upon a process of privatisation and liberalisation.
In the early 1990s the Government of Tanzania created the Investment Promotion Centre under the Investment Promotion Policy, following which the mining industry began to expand and attract international investors. Government efforts to undertake a mineral sector restructuring programme to encourage and promote private sector led development in partnership with the accumulated geo-data revealing Tanzania’s diverse mineral resources base and potential have strengthened the sector considerably and legislation in 1997 and 1998 reinforced this trend.
In 2008 UNCTAD’s World Investment Report showed that foreign direct investment (FDI) had significantly increased with Tanzania ranking as one of the top non-oil African countries in terms of FDI receipts, which was fuelled by the opening up and development of the country’s mining sector. During this period a number of large gold mines were established including Bulyanhulu in Kahama district with a capacity of 450,000 ounces and Geita Gold with a capacity of 650,000 ounces.