Finance minister Mwigulu Nchemba speaks during the signing of gold purchase and refining agreements between the Bank of Tanzania and three mining firms and a gold refinery in Dodoma yesterday. PHOTO | CORRESPONDENT
Dodoma. The Bank of Tanzania (BoT) has signed a milestone agreement with key gold mining firms and the Geita Gold Refinery in a move aimed at streamlining gold purchases and transportation within the country as part of efforts to strengthen Tanzania’s foreign exchange reserves.
The agreement signed on Monday June 16, 2025 brings together Geita Gold Mining (GGM), Shanta Gold, Buckreef Gold and Geita Gold Refinery (GGR). It comes as the BoT scales up its gold-buying programme from the local market to bolster the country’s reserve assets.
Speaking during the signing ceremony, Finance minister Mwigulu Nchemba said the gold purchase was helping to increase external reserves.
He urged local refineries to raise their operational standards to meet international requirements for certification by the London Bullion Market Association (LBMA).
“Accreditation by LBMA will increase the global acceptability of Tanzanian gold and allow it to be traded in international financial markets,” Dr Nchemba said.
He explained that for gold to be recognised and accepted by central banks and international financial institutions, it must be refined to a high purity level and certified by approved entities such as the Bank of England.
Tanzania currently sends refined gold abroad for hallmarking through a gold-swapping arrangement.
Dr Nchemba said the deal aligns with Section 59 of the Mining Act, which requires mining companies to set aside 20 percent of their production for local markets, including the BoT, which holds the right of first refusal.
“This arrangement supports BoT’s gold purchase programme and helps local refineries work towards LBMA accreditation,” he said.
Dr Nchemba acknowledged outstanding legal and tax-related challenges, including VAT on refining services and the logistics of gold storage abroad. He said the government would resolve the issues in line with national laws.
BoT governor Emmanuel Tutuba said the deal is part of wider efforts to reduce reliance on foreign borrowing and promote financial independence by leveraging Tanzania’s mineral resources.
He revealed that BoT had exceeded its 2024/25 gold procurement target, having purchased 5.022 tonnes worth $554 million as of June 13, surpassing the $350 million target.
“The gold has been purchased at competitive prices from three local refineries without any complaints. Payments are made within 24 hours,” Mr Tutuba said.
He added that 162 kilogrammes of gold are currently held in Tanzania’s account with the Bank of England, 2,775kg at BoT’s Mwanza branch and 719kg in Dodoma, with more gold set to be shipped for certification.
Minerals minister Anthony Mavunde said the agreement marked a significant step in Tanzania’s economic development, attributing it to President Samia Suluhu Hassan’s leadership and commitment to value addition in the mining sector.
He noted that the sector’s contribution to GDP had risen from 9 percent in 2015 to 10.1 percent in 2024/25, while revenue to the government increased from Sh162 billion to Sh753 billion, with plans to reach Sh1 trillion.
“While early negotiations with mining firms were challenging, the amended Mining Act, which introduced the 20 percent local sales clause, has enabled smoother implementation.”
Mr Mavunde reaffirmed the government’s commitment to promoting local beneficiation, noting that Tanzania currently has eight gold refineries and encouraging more investment in value addition.
For Tanzanian gold bars to qualify for international trade, they must be accredited by recognised bodies such as the LBMA.
Experts say this would open up global market opportunities, particularly for small-scale miners, by ensuring their gold meets international quality standards and thus fetches better prices.
