Gold trading in Tanzania

My colleague and I intend to establish a business involving the purchase and sale of gold within Tanzania and its export to international markets. We intend to purchase gold directly from licensed small-scale miners and subsequently sell it to local dealers and foreign buyers. However, we are uncertain of the type of licence or permit we should have to undertake these activities. We also wish to understand the procedures for obtaining the relevant licences, the regulatory authorities involved, and the requirements for exporting gold.

RG, Arusha

Gold trading in Tanzania is principally governed by the Mining Act, Cap. 123 (the Act) and the Mining (Minerals and Mineral Concentrates Trading) Regulations, 2018. The relevant licences available for your contemplated business are broker’s and dealer’s licences. A broker’s licence authorises its holder to purchase gold at designated buying stations and sell it to licensed dealers but does not permit exportation. Conversely, a dealer’s licence authorises its holder to acquire, possess and trade in minerals, including gold, and permits exportation subject to obtaining the necessary export permit. A broker’s licence is reserved for eligible Tanzanian applicants, while a dealer’s licence may be issued to qualifying companies with foreign participation, subject to a minimum 25% Tanzanian shareholding. Since you intend to purchase gold for both domestic sale and export, a dealer’s licence is appropriate.

In terms of procedure for obtaining a dealer’s licence, you should first establish a place of business like any other entity, including obtaining a TIN certificate and securing the applicable business licence and suitable business premises. Thereafter, you should submit your application to the Mining Commission in a prescribed form, accompanied by the relevant application fee and supporting documentation. Such documentation generally includes the company’s incorporation documents, particulars of directors and shareholders, evidence of financial capacity, details of the proposed trading premises, arrangements for the secure custody of gold, and information demonstrating the applicant’s capacity to undertake mineral trading. Dealer’s licences are generally valid for a maximum of 12 months, subject to renewal in accordance with the Mining Act.

Because you intend to also export gold, export procedures, permits and regulatory obligations are worth addressing. Although a dealer’s licence authorises its holder to engage in gold trading, it does not dispense with the requirement to obtain a separate mineral export permit for each proposed export consignment. Before exporting gold, you must apply to the Mining Commission for an export permit, providing the relevant particulars of the consignment, including its quantity, value, destination and supporting transaction documentation. The gold must undergo the applicable official verification, weighing and valuation procedures to establish its gross value for purposes of assessing statutory payments. The exporter must provide evidence of payment of the applicable royalties and fees before obtaining the necessary export clearance. Further, you must complete the relevant customs formalities with TRA and ensure that the gold is exported in accordance with the permit conditions.

The mining legal framework further requires mineral rights holders and licensed dealers to set aside not less than 20% of gold produced or acquired for domestic processing, smelting, refining or trading. This gold must be sold within Tanzania to authorised refineries, smelters, jewellers or the Government through the Bank of Tanzania (BoT). In this regard, a licensed gold dealer intending to export gold must first ensure that at least 20% of the gold acquired is reserved for domestic sale.