February 2021: Update on recent development for investors across East Africa
Energy & Natural Resources
Tanzania recently issued new Mining (Disputes Resolution) Rules, directly impacting companies and individuals operating in the mining sector and revoking the previous rules in effect. In this article, we provide an overview of the new rules and the key implications to consider.
The Mining (Disputes Resolution) Rules (the Rules) which are made under section 122 of the Mining Act Cap 123 Revised Edition 2019 (the Mining Act), were published in the Government Gazette dated 16 April 2021 and repeal the Mining (Disputes Resolution) Rules Government Notice No. 224 of 1999.
The Rules will directly affect persons engaged in prospecting or mining operations and any third parties but not the Government. This means that the Executive Secretary of the Mining Commission (the Commission) will have power to inquire into and decide disputes between the abovementioned persons. The law permits this power to be delegated to any officer of the Commission who holds - at a minimum - the rank of a director.
Section 119(1)(a)-(d) of the Mining Act provides that the Commission will decide disputes in connection with:
The Commission is managed by the Executive Secretary who is the Chief Executive Officer. The Executive Secretary is appointed, for a term of five years, by the President of the United Republic of Tanzania to oversee the management of the Commission. After the five year tenure, the Executive Secretary will be eligible for re-appointment.
A complaint is lodged, upon payment of a fee, by way of a memorandum of complaint (the Memorandum) in Form MDF.1. Upon receipt of the Memorandum the Commission will register and assign a dispute number. We have noted that the Rules have not provided the time limit within which to lodge a complaint which leaves room for the complainant to lodge a complaint at any time.
The minimum fee for lodging a complaint is TZS 200,000 and the maximum fee is TZS 1,500,000. The fees vary depending on the type of licence held by the complainant or if the complainant is a third party.
Upon receipt of the complaint, the Commission will have fourteen days from the date of registration of the Memorandum to assess whether the dispute falls within its scope i.e. whether it is a dispute in connection with the provision of section 119(1)(a)-(d) of the Mining Act. Upon the Commission's satisfaction that there is a dispute to be decided, the complainant will have seven days to serve the respondent with the Memorandum which will be accompanied by a notice to file a defence in Form MDF.2. The respondent will be required to reply to the Memorandum within fourteen days from the date of receipt of the Memorandum. However, the Rules are not clear as to which document the respondent will use to reply to the complainant's Memorandum.
Where the dispute does not fall within the Commission's scope, the Commission will notify the complainant and the dispute will be thrown out.
The notice of hearing in Form MDF.3 will be issued to the parties by the Commission by registered post, fax, emails, dispatch or other acceptable electronic means of communication.
Each party will bear the cost of witnesses appearing to give evidence in support of their case. However, the cost for calling witnesses will not act as a waiver of the right of the decree holder to claim for costs.
The Rules have not made it clear whether the decision of the Commission is final or whether there is a possibility of appeal. However, the Mining Act provides that appeals can be made to the High Court of Tanzania within 30 days from the date of the Commission's decision.
This briefing is prepared for clients and contacts of Clyde & Co Tanzania. We aim to keep our clients abreast of developments in Tanzania as they happen and if you have any questions on the issues raised above please contact us directly.
Further advice should be taken before relying on the contents of this summary. Clyde & Co Tanzania accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co Tanzania.