The Government to own shares in firms extracting what it considers strategic minerals

Tanzania plans to include a clause in its new mining law allowing the government to own shares in firms extracting what it considers strategic minerals, its energy and minerals minister said on Tuesday.

New law due in parliament in late 2009

The law currently allows the government to hold no less than 25 percent in companies mining gemstones like diamond, tanzanite and rubies, but is silent on other minerals.

In the new law....

*The law will also compel mining firms to buy goods and services locally when they are available.

*The government will have the authority to take shareholding even if it is 10 or 15 percent in minerals that the government deems strategic.

*The move would not apply retrospectively to existing companies; the government would decide on a case-by-case basis what mineral it considered strategic.

*The new law will introduce guidance on the amount of compensation paid to people displaced by mines.

* It also aims to increase royalties paid on minerals like gold and diamonds.

*It would guide how to equitably distribute the gains from the minerals to the country's population of 40 million people.