By DAILY NEWS Reporter, 27th February 2011 @ 19:30, Total Comments: 0, Hits: 3416
A NEW US legislation has wrongly classified Tanzania as a source of "conflict minerals" in Africa, an error that may cost the country huge losses in export earnings and thousands of jobs in the mining sectors.
The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by United States President Barack Obama in July 2010 was aimed at improving transparency and accountability in the supply of minerals from the conflict zones of the Democratic Republic of Congo (DRC).
However, the controversial 2,300-page legislation erroneously describes Tanzania as a "DRC country" and imposes burdensome new mineral export regulations.
"It appears likely, therefore, that unless amendments are made to the regulations, Tanzania will suffer significant collateral hardship and economic damage," the Chairman of the Tanzania Chamber of Minerals and Energy (TCME), Ambassador (rtd) Ami Mpungwe, told the 'Daily News' in Dar es Salaam yesterday.
Referring to the TCME comments on Proposed Rule relating to the Dodd-Frank Wall Street Reform Act, Ambassador Mpungwe said Tanzania has, at no point, sought to pursue any strategic or self-interested objectives in the DRC and, therefore, managed to avoid any direct involvement in the conflict, other than the pursuance of sustainable peace and stability.
Tanzania has for years lived up to its humanitarian responsibilities by providing asylum for over 150,000 refugees.
He said Tanzania welcomes measures to scrutinise manufacturers of tin, columbite, tantalum, tungsten and gold from non-conflict sources and work for the success of these measures.
It has, however, expressed grave concern over the potential impact of the current draft of the regulations in the country's gold industry.
The legislation identifies "conflict minerals" as gold, wolframite (tungsten), cassiterite (tin) and columbite-tantalite (coltant) from the DRC and the nine adjoining countries -- Tanzania, Central African Republic, Sudan, Uganda, Rwanda, Burundi, Zambia, Congo, Angola.
It is estimated that more than 2,000 jobs could be cut off in the mining sector due to the burdensome new regulations created by the law.
For example, a 10 per cent reduction in demand for gold from Tanzania would result in a reduction of around $200 million in Foreign Direct Investment (FDI) due to a reluctance to develop projects.
Tanzania is Africa's fourth-largest gold producer with its production rising from 40.9 tonnes in 2009 to 44.6 tonnes in 2010. The value of gold produced in Tanzania in 2010 jumped to $1.77 billion from $1.076 billion the previous year.
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