Under the Mining (Minimum Shareholding and Public Offering) Regulations 2016, as amended by the Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations 2017, a holder of a Special Mining Licence (SML) had the following obligations:
- To maintain a 30% total issued and paid up shares as a minimum local shareholding (see Regulation 4(1)).
- To obtain a minimum local shareholding through public offering in accordance with the provisions of the Capital Market and Securities Act 1994 immediately after commencement of the mining operations (see Regulation 5(1), as amended).
- A licensee whose SML was issued prior to commencement of the Regulations shall ensure compliance within 6 months from the date of publication of the Regulations (see Regulation 5(2), as amended).
On 6 March 2020, the Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations 2020 came into force and changed this position so that SML holders can be exempted from listing their shares publicly as follows:
- Regulations 4 and 5 shall not apply where a company holding an SML has entered into an agreement with the Tanzanian Government which provides for a non-dilutable free carried interest shares in the capital of the company and with an economic benefits sharing arrangement (see Regulation 2).
Therefore, now when an SML holder has entered into an appropriate agreement with the Government then the SML holder can be exempted from the original Minimum Shareholding Regulations.
Please contact us if you have any comments or questions.