The document discusses the roles and functions of the Tanzania Minerals Audit Agency (TMAA) in auditing Tanzania's mining sector. Specifically: 1. TMAA conducts physical audits of mineral production and exports to verify quantities, qualities, and ensure accurate royalty payments. This protects investors. 2. TMAA performs financial audits and tax reviews of mining companies to ensure accurate revenue and expenditure reporting, and compliance with tax laws. This broadens tax revenue and provides a predictable fiscal regime for investors. 3. TMAA monitors company environmental practices through site inspections and reviews of environmental plans, to help investors mitigate risks while ensuring environmental stewardship.

1. Presented by
Prof Handley Mpoki Mafwenga,
[PhD, MSc, MBA, PGDTM, ADTM, LLB]
BERLING GERMANY
50TH UNION ANIVERSARY OF THE REPUBLIC OF TANGANYIKAAND
THE REPUBLIC OF ZANZIBAR
FRIDAY, 25 APRIL 2014
THE UNITED REPUBLIC OF TANZANIA
MINISTRY OF ENERGY AND MINERALS

2. 1. Vast unexploited mineral resources coupled with Stable
political environment; Tanzania has so far extracted less
than 10% of the various types of minerals found in the
country;
2. Emerging economy with high growth potential which prevail
under transparent regulatory and administrative system; It
thus satisfies two criteria 1) a rapid pace of economic
development and 2) Government policies favoring economic
liberalization and the adoption of free-market system-This
is in line with NSGRP Cluster 3 which advocates for Good
Governance and Transparency and African Mining Vision
adopted by AU Head of States in Feb, 2009 which calls for
transparency, equitable and optimal exploitation of mineral
resources to captures broad based economic growth;
3. Geological resource database with adequate information
which is a major assets in mineral resource evaluation; and
4. Fiscal regime that provides incentives which are
internationally competitive, non-discriminatory, stable and
predictable.

3. • Mining contributes about 3.5% of GDP as per 2012
prices [Table 2.1].
• Large Scale mines employed 8,024 people in 2013 of
which 6% were expatriates. ASM employs directly
more than 700,000 people [Table 2.2].
• Large Scale mines paid about TZS 2,070 bil. to the
Government in form of taxes and royalties in 2013
[Table 2.4].
• In 2011, seven Large Scale mines (GPM, GGM, BZGM,
TGM, BGM, WDL & TTM) voluntarily committed USD
7.44 mil. to CSR projects representing 0.4% of their
mineral revenues in the same year [Table 3.5].

4. • Gold exports accounts not less than 25% of total
exports and 51.1% of non-traditional export
earnings in 2012 [Table 3.4].
• Spill-over effects of mining: notable sectors that
have benefited from mining are
Banking/Financial Services; Transport & Logistics;
Manufacturing & Fabrication; Hospitality &
Catering; Consulting (Environmental &
Engineering Services).

5. 1.4 1.4
1.5
1.8
2.1
2.4
2.6
2.9
3.2
3.5
3.4
3.3 3.3 3.3
3.5
0
0.5
1
1.5
2
2.5
3
3.5
4
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
GDP[%CurrentPrices,1998to2012]
FISCAL YEARS
GDP

6.  From 1997 through 2000 Tanzania opened door
to foreign investment in the mineral sector to
attract investors to bring technologies and
expertise [Increasing large Scale Mining
Exploration and Mining activities];
 From 2001 through 2007 there has been a GDP
contribution at an increasing rate due to active
mining activities and related sub-sectors-
incentives contribution from the Government to
enhance mining life cycle into productive
capacity;

7.  From 2008 through 2010 the sector contribution
declined due to significant reduction in the prices
of Tanzanite, Diamonds, Aluminium and Nickel
while world market declined by 50% and Diamonds
prices fell by 26% [$8,870 to $ 6,608 per carat]
 However, recovery came into being due to
Government intervention through substantial Fiscal
Stimulus Package announced on 9th June, 2009
[reduction of VAT from 20% to 18% coupled with
efficiency in VAT refund, exemptions from royalty
payments for Diamonds and Tanzanite for two
years] The economy came to Medium Term Growth
Path

8. 6,999 7,139 6,917
7,361
7,753
8,134
7,542
460 567 583 650 718 669 482
7,459 7,706 7,500
8,011
8,471
8,803
8,024
2007 2008 2009 2010 2011 2012 2013
NOOFEMPLOYEES
FISCAL YEARS
Locals Expatriates Total

11. Export Permits are given to the following:
 Mineral right holders that have Special Mining
Licence, Mining Licence, Primary Mining Licence,
Processing Licence, Smelting Licence and
Refining Licence. Additionally, an individual or
company holding a Dealer Licence .
 Non-resident who has acquired minerals from an
authorised miner or licensed dealer and has
applied to the Commissioner for Minerals for a
special permit.

12.  Non-resident who has obtained minerals from a
Gem Trade Fair in Tanzania .
 Non-resident with a Tourist Visa is also
permitted to export minerals.

13.  Export Permits are required for all minerals and
samples of minerals.
 In case of Tanzanite, a Certificate of Origin for
Tanzanite is required.
 For diamonds, Kimberley Process Certificate is
required.

15. 3,853,183
10,776,687
2,385,978
1,036,889
3,975,167
617,991
3,511,676
26,157,571.00
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
GPM GGM BZGM TGM BGM WDL TTM TOTAL
AMOUNTINUSD
Grand Total

16.  The CSR being the voluntary commitment for
mining companies was enhanced by the
TMAA through financial audit which
facilitated Disclosures to be reliable and
intelligible to the users;
 The CSR reduced disputes between
community members and the mining
companies and TMAA was solely engaged to
pursue awareness campaign on part of the
stakeholders so as to built up confidence on
the execution of the scheme.

17. 4.0: AUDITING UNDER TMAA
[ROLES & FUNCTIONS OF TMAA]
• Increased Govt.
Revenues
• Availability of Reliable
Minerals Data• Quality
• Quantity
MINERALS PRODUCTION
& EXPORT AUDIT
•Financial
Analysis
•Tax Review
FINANCIAL AUDIT
•Compliance
ENVIRONMENTAL
AUDIT
GOVTTMAA
• Environmental
Stewardship
Mining
Entities

18.  Physical audit of minerals production and export
(quantity and quality of minerals);
 Stationing full time Auditors to witness and record daily
production, weighing, packaging, sealing and export of
minerals. This helps investors to have a sustainable ethical
values to the investors over the employees;
 Taking mineral samples and performing logistics for shipments
of collected samples from the mine sites to the TMAA laboratory
for assaying. This ensures investors over the actual values and
quantity of minerals exploited;
 Conducting royalty reconciliation by comparing mines’ assay
results against those of TMAA. This gives investor high degree
of confidence on how much royalty to be paid
 Strengthening efforts to counteract minerals smuggling and
royalty evasion. This protects investors in the competitive
environment to conduct the projects fairly and rationally.

19. Mineral samples being inserted in the furnaces

22.  Auditing financial records of mining entities so as
to attain quality assurance on the disclosures.
 Financial audit and analysis: Verifying the authenticity of
revenue declared, capital and operating expenditure
incurred by the mining companies; So as to help investor
to be in the reliable, predictable, stable and neutral fiscal
regime.
 Tax review and analysis: Reviewing and Analysing the
tax accounting of mining companies in order to
determine whether accounting methods used were
appropriate and in compliance with statutory
provisions; So as to broaden tax base and enhance tax
net which put fair tax system among the investors .
 Revenue forecasting modelling: Performing revenue
forecasting based on available historical, current and
future economic variables relating to large and medium
scale mining projects; So as to have predictable and
sustainable fiscal flows on the investors and the
Government.

23.  Monitoring environmental management activities
around mining areas through:
 Reviewing Environmental Management Plans (EMPs),
rehabilitation programs and environmental reports. This
would help investor to be cost leader in lieu of mitigating
environmental risks that would affect the projects on one
hand and the environment on the other hand.
 Conducting physical inspection at mine sites to verify
implementation of EMPs. The aim including among others is
to ensure corporate integrity over environmental concern.
 Verifying whether mines are setting sufficient funds for
environmental conservation, progressive rehabilitation and
mine closure. This helps investor to have a sustainable
provisions of funds and efficient implementation of
environmental obligations.

25.  TMAA is a key instrument to protect
investors from the environmental risks which
are caused by ASM closer to the mines;
 TMAA has also been a key instrument in
curbing environmental risks that would affect
the Flora and Fauna within the mine sites and
closer thereof;
 TMAA has also helping investors to abide to
the Standards and Regulations under EMA
and providing inputs to other stakeholders

26. The mineral sector remains critical to Tanzanian
development, and has been an important contributor
to the national economy. TMAA being a key
stakeholder in the mineral sector is solely committed
to excel its role of ensuring that the Government
maximizes benefits from the sector. TMAA has
shown positive outcomes through realization of
significant revenue in terms of royalty and taxes
collected from the mining industry.

27. THANK YOU FOR YOUR
KIND ATTENTION
www.tmaa.go.tz