Te Arusha Declaration was the final nail on the coffin of the large scale mining industry in Tanzania as it triggered a series of actions to reform the mining industry in an effort to localize the economy.
This is the second part of an article on the political economy of reforming the mineral sector in Tanzania
Te Arusha Declaration was the final nail on the coffin of the large scale mining industry in Tanzania as it triggered a series of actions to reform the mining industry in an effort to localize the economy.
Right after the Union between Tanganyika and Zanzibar in 1964, the country’s (Tanzania) political orientation began to change by abandoning the free market economy in favour of the emerging command economy.
This was galvanized by Mwalimu Nyerere’s visit to China and came back a changed man. Not only did he change the British style of wearing a ‘Western suit’ to a Chinese ‘Mao ze Dong’ suit wearing style, but he also changed the political ideology of the country in favour of the socialist command economy. As Mwalimu became a socialist so did Mao’s suits become his cassock as a qualified Chinese political clergy. At this point in time the government took the first step in 1967, to develop the entire mineral sector that not only included mining but also mineral trading and mineral value addition activities.
A mineral sector State-directed economic development strategy was developed and adopted. The strategy directed, among other things, that medium to large scale private owned investments in the mineral sector was not to be allowed without State participation of not less than 51pc.
All means of production were to be nationalised and became public investments, whereby the mining industry was not spared. The Arusha Declaration was coined to clearly show the visionary way. The Arusha Declaration was the guiding flare to achieve this noble goal of public ownership of means of production.
The State Mining Corporation (Stamico) was then created in 1974 to run all public investments in the mining industry. However, mining policies and statutes remained colonial and it was not until 1979 when a Mining Act, of 1979 was put in place to match with the new mining regime of the command economy political orientation. As the large scale mining industry had long collapsed and artisanal and small-scale mining had become a key rural mining activity and a major producer of minerals in Tanzania, Stamico had to quickly establish a gold mine at Backreef in Geita District by salvaging old processing plant equipment from the closed Geita and Buhemba Gold mines that were abandoned earlier to rot at the sites. The Buckreef mine was put in place to kick start Stamico operations. Stamico also took over the running of the Williamson Diamond Mine that was a 50pc -50pc Joint Venture investment between the government of Tanganyika and later Tanzania and De Beers Company of South Africa. All salt works including the Uvinza Salt Mine were placed under Stamico.
Other mines that were started under Stamico investments included the Kiwira Coal Mine in Kyela District that came up as a Tanzania-China bilateral investments package (including the Tazara railway line and some textile industries) in the early 1980s. The mine was constructed by the Chinese government between 1980 and 1988; the Minjigu Phosphate Mine in Arusha Region was also established in 1979; while the Pugu Kaolin Mine in Kisarawe District began in 1982. Stamico also operated and ran TanCut Almasi, a diamond value addition - diamond cutting and polishing factory in Iringa Town.
The 1970s and 1980s was the socialists’ time - the command economy era and every means of economic production was put under the public eye. Stamico had now a huge responsibility of taking care of all mining investment activities of the country. The government through a Geological Survey of Tanzania was also responsible for advancing all exploration ventures in the country. With the help of loans and grants from the United Nations Development Program (UNDP); exploration projects for gold and basemetals was launched in Lake Victoria Goldfields under the Geology section of the Mineral Resources Department that was based in Doodoma.
To put a special push to the development of the mining industry in the 1980s, the government established the ministry of minerals dedicated to regulating the mining industry. The ministry was based in Dodoma. It was at this time the Mineral Resources Department (MRD) led by a commissioner for mineral resources was created. All these efforts activated and sustained the growth of the mining industry in Tanzania in anticipation that it would become the engine for economic growth in the future.
Next week we will examine the political and economic forces that drove the agenda of reforming once again the mineral sector in Tanzania during the 1990s at the onset of the free market economy.
