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China in Africa: Tanzania grants Chinese firms licences to build gold refineries

China in Africa: Tanzania grants Chinese firms licences to build gold refineries
Africa’s fourth-biggest producer of gold, Tanzania, has awarded licences to China to construct a mineral smelter and two gold refineries. The Tanzanian government seeks to generate more revenues from the nation’s mining industry.

According to Minister for Minerals Doto Biteko, 37 Chinese companies expressed interest after the government invited bids from mining firms to build smelters and refineries there.

“After carefully assessing the financial capability and history of those companies, we have issued licences for the construction of two gold refineries and a smelter,” Biteko said as cited by Reuters.

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“We will also soon award special mining licences to two companies to build large-scale mines, whose individual investment is above $100 million,” he added.

The government said it had set up 28 mineral trading centers since March to improve revenue collection from small-scale miners.

“Gold worth a total of 136.7 billion Tanzanian shillings ($60 million) has been traded through the new mineral centers since March and the government has collected 7.7 billion shillings ($3.3 million) royalty and clearance fees,” Biteko said.

Tanzania is Africa’s biggest gold producer after South Africa, Ghana and Mali. Small-scale miners in Tanzania produce around 20 tons of gold a year but 90 percent is illegally exported, according to a parliamentary report.

The country’s President John Magufuli said revenue collection from mining had increased over the past two years, after his government tightened controls.

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“African countries have not been benefiting from their natural resource wealth, including minerals. Our minerals have been stolen through smuggling or through exploitative mining contracts,” said Magufuli.

Gold exports are a key source of foreign exchange for the country. Central bank data showed Tanzania exported $1.549 billion-worth of the precious metal last year, up from $1.541 billion in 2017.

Some 301 billion shillings ($130 million) in mining revenue has been collected in the 2017-2018 fiscal year. That figure rose to 310 billion shillings ($134 million) in 2018-2019. The government aims to collect 470 billion shillings ($204 million) in 2019-2020.

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