Tanzania is known to have a conducive and prospective geological environment with abundant potential of economic mineral deposits. From 1979 to 1997, the sector was administered under the Mining Act of 1979. The Act provided insufficient incentives to attract foreign and local investment. In 1997, the Government opened doors to foreign investment in the mineral sector to attract investors to bring into the country capital, technology and expertise.
Measures taken include: formulation of the Mineral Policy of 1997; enactment of the Mining Act of 1998 which repealed and replaced the Mining Act of 1979; and establishment of fiscal incentives aimed at attracting both local and foreign investors. These measures resulted into increased large scale exploration and mining activities, including the opening of 6 large scale gold mines (1998 - 2005). However, the public was not satisfied with the contribution of the sector to the economy. They were of the opinion that the sector was inadequately monitored by the Government.
In an effort to address the public outcry, the Government initiated a number of measures, including strengthening monitoring and auditing of minerals produced and exported by major gold mines. M/S Alex Stewart (Assayers) Government Business Corporation (ASAGBC) was engaged under Section 16 (5) of the Mining Act, Cap. 123 to undertake gold auditing of the major gold mines in the country from June, 2003 to August, 2007. ASAGBC was also engaged to build capacity of nationals to enable them to take over the minerals auditing activities in the future.
Despite the work done by ASAGBC, the operation cost was 1.9% of the market value of the audited gold exports, which is equivalent to 64% of royalty paid to the Government by the major gold mines. This was high compared to the services rendered. Therefore, the whole exercise defeated the Government’s good intention of increasing revenue from the mineral sector.
In this regard, on 15th August 2007 the Government approved the formation of Gold Audit Program (GAP) under the Ministry of Energy and Minerals to take over the activities previously undertaken by ASAGBC. As a result of GAP’s operations, the Government:
1. collected corporate tax from one major gold mine;
2. recovered uncollected royalty from major gold mines;
3. acquired accurate information and statistics of minerals produced and exported by major gold mines; and
4. cut monthly operations cost by 75% of the costs previously paid to ASAGBC.
These achievements prompted the Government to strengthen monitoring and auditing of the mining operations by mainstreaming GAP operations into the Ministry’s organization structure as Minerals Auditing Section under the Minerals Department.
In July 2009, the Government approved the Mineral Policy of 2009 which stipulates, among other things, the establishment of the minerals auditing institution. The proposed institution would take over the functions previously undertaken by the Minerals Auditing Section with increased scope to cover large, medium and small scale mines for all minerals so as to maximize the benefits from the mining industry, thereby enhancing socio-economic development.
On 6th November, 2009 the Government established the Tanzania Minerals Audit Agency (TMAA), which is a semi-autonomous Institution established through Government Notice No. 362 under the Executive Agencies Act, Cap. 245. TMAA took over the functions previously undertaken by the Minerals Auditing Section (commonly called GAP) in the Minerals Department under the Ministry of Energy and Minerals.