Tanzania to adopt RP?s ?best mining practices’

“When I started reviewing our mining legislations, laws and contracts, I was
told that this has never been done anywhere on earth only to find out that
you have mineral production sharing agreements here,” he said in a press
conference here this morning.

The Mineral Production Sharing Agreement (MPSA), one of the mining policies
enhanced by the Mining Act of 1995, allows the government to share in the
production of a mining contractor, whether in kind or in value, as owner of
the minerals.

In return, the contracting firm would provide the necessary financing,
technology, management and personnel for the mining project.

Masha led an eight-man delegation from Indaba, southern Africa’s premiere
mining conference, in a two-day cross visit to the copper and gold project
site of Australian-backed Sagittarius Mines Inc. (SMI).

The group visited SMI’s base camp in barangay Tablu in Tampakan town, South
Cotabato and conferred with officials of the Department of Environment and
Natural Resources (DENR) on Wednesday.

They are in the country on an invitation from Environment Secretary Angelo
Reyes who attended the 11th Annual Investing in African Mining Conference or
Indaba 2006 last February in Cape Town, South Africa.

Four other delegations from Indaba, a Zulu term which means “together and
discuss,” separately visited mining projects in Baguio, Surigao, Cebu and

Masha said the Philippines is quite similar to Tanzania in terms of
abundance of mineral resources, a large part of which remains undeveloped.

Although mining activities were recorded in Tanzania in as early as 1925,
Masha said its minerals industry only started to take off after the
exploration boom a decade ago.

“(But) for many years in the past, many people came in to mine and gave
great wealth for the country which they came,” he said.

He said they understand such practice since mining is highly capital-
intensive but he pointed out that the mining companies should also be able
to properly return the benefits to the owner of the natural resources.

He said the adoption of a similar policy on mineral production sharing in
Tanzania would ensure that “we get the benefits that we deserve.”

According to records at the DENR’s Mines and Geosciences Bureau, the
government has approved at least 288 MPSA applications as of January.

SMI acquired three of these MPSAs, which have an aggregate area of 9,477
hectares, from their local partners Sagittarius Mines Inc., Tampakan Group
of Companies and SouthCot Mining Company.

These MPSAs are subsumed in the Financial and Technical Assistance Agreement
or FTAA held by SMI, which is currently completing its explorations on the
copper and gold deposits in the area.

The copper deposit, placed at two-billion tons, is touted as the biggest in
Southeast Asia.

Masha said they were impressed with the “nature of responsible mining taking
place at SMI” during their visit to the company’s project site and its
partner communities.

“It’s very rare to see a situation wherein a company comes in and at pre-
feasibility stage embarks on an exercise to train and facilitate the
participation of locals within an area for the preparation of services to a
mine which is yet to be opened,” he said.

Masha cited the training programs and capability-building activities being
implemented by SMI in the area and its scholarship program that now covers
more than 5,000 students, mostly belonging to the B’laan tribe.

He stressed that it is important for the people on the ground to see the
wealth that are generated from the mining sector.

He said the best way to prepare people to actually receive the benefits of
the mining sector is to “prepare them to participate and benefit from the
mines that have been on the ground.”

“That is the secret of ensuring that mining is a win-win situation for the
foreign direct investor and the locals,” Masha said.

He said he would send a group of mine experts from both the government and
private sector of his country to visit the Philippines again and conduct
some studies so they would be able to emulate what they have seen at SMI’s
mining project in Tampakan.

Tanzania, located in Africa’s east coast, is the third biggest producer of
gold in the African continent and the only source of the Tanzanite gemstone.
It is also one of the biggest producers of diamonds in recent years.

But Tanzania’s mining industry, which is largely financed by foreign
companies, only comprises 2.3 percent of its gross domestic product.