Mining licenses in Tanzania are crucial for anyone looking to explore, develop, and exploit mineral resources legally. These licenses, issued by the Mining Commission, grant individuals or companies the right to extract specified minerals within a designated area for a specified period. To mine the minerals, Tanzania offers four types of licenses: Primary Mining Licenses (PML), Prospecting Licenses (PL), Mining Licenses (ML), and Special Mining Licenses (SML). However, in the context of Artisanal and Small-Scale Gold Mining (ASGM), only PMLs and, to a lesser extent, MLs are applicable.
How to create an opportunity with PML or ML in ASGM
Many may wonder how to leverage PMLs or MLs to create profitable opportunities in ASGM. Beyond exploiting the gold within your licensed area, there are other strategies to generate revenue. For instance, license holders can rent out their licenses or enter into joint venture agreements with investors. These alternatives can be particularly lucrative if the area covered by the license has proven gold mineralization, which enhances its market value and profitability.
It’s important to note some specific considerations. For example, PMLs are exclusively available to Tanzanian citizens and companies. For companies, this means that all members and directors must be Tanzanian citizens. MLs, on the other hand, require a capital investment between US$100,000 and US$100,000,000 or its equivalent in Tanzanian shillings.
How to mitigate the risks associated with insufficient deposits in the license.
Given the potential risks associated with insufficient gold deposits in a licensed area, thorough research is essential before making any significant investment. This research should include a background check on historical gold production in the area, seeking survey data from the Geological Survey of Tanzania (GST), site visits, and geological mapping. These steps can help identify promising areas and mitigate the risk of financial loss
A conservative approach of starting small and scaling up operations as production increases helps manage risks, as even professionally explored areas in and out of Tanzania sometimes fail to be profitable in the long run. Balancing a team of mining professionals with locally experienced individuals is crucial for success. While professionals bring scientific expertise and case studies, locals often have a deeper understanding of the geology and unique characteristics of the area.
In conclusion, it’s important to note that the profitability of a mining license (PML or ML) in ASGM largely depends on the geology of the area, mining method and metallurgy of the ore. By making informed choices and carefully planning, you can maximize your chances of success in Tanzania’s ASGM sector, potentially reaching the next level in this competitive industry.
