Every mine carries geology in its rock, but Nyanzaga carries law in its licence. Unlike Geita or Bulyanhulu, which were born in the freer 1990s and later retrofitted into new terms, Nyanzaga is the first Tanzanian mega-project conceived, permitted, and financed entirely under the 2017 reforms. That makes it more than a mine; it is a legal experiment in motion.
The 2017 amendments to the Mining Act, pushed through under President Magufuli, reshaped the ground rules. They mandated a minimum 16% state-free carried interest in all projects, increased royalties on gold from 4% to 6%, added a 1% clearing fee on exports, imposed strict local content obligations, and introduced Community Development Agreements (CDAs) requiring companies to commit 0.7% of their revenues to local projects. The reforms also abolished stabilization agreements and declared all natural resources to be sovereign assets.
Critics warned the package would scare off capital. Advocates said it was long overdue for a correction, following years of “investor-friendly” deals that left little for Tanzanians. Nyanzaga is the first large-scale mine to move from exploration to development under these rules. Its story will decide whether the reforms are remembered as deterrent or enabler.
The 2017 reform package
The reform package was born in confrontation. By 2017, the government and miners were locked in disputes over taxes, exports, and resource ownership. The reforms responded with a legal reset:
- Equity: Every project must allocate the state a free-carried interest of at least 16%. This provision enshrined state ownership, moving beyond the payment of royalties.
- Royalties & levies: Gold royalty lifted to 6% (from 4%), plus a 1% clearing fee on gross export value.
- Local content: Mandatory employment quotas, Tanzanian ownership of supplier firms, and succession plans for expatriates.
- Community obligations: CDAs became compulsory, with 0.7% of revenues earmarked for local development.
- Contracts & stability: Previous stabilisation agreements were voided; Parliament declared mineral resources the property of the people of Tanzania.
These laws were sweeping, disruptive, and politically popular. But their effect on investment appetite was uncertain. Juniors stalled; majors negotiated adjustments. For years, sceptics asked: could a new mine even be built under these conditions? Nyanzaga is the answer unfolding in real time.
Nyanzaga as first post-reform licence
When Cabinet approved Special Mining Licence 653/2021 on 13 December 2021, it was more than a permit. It was a political statement: Tanzania could approve new mines under the 2017 framework.
Nyanzaga became the first large-scale project licensed after the reforms. The process was unusually visible: Cabinet sign-off, public ceremony, and immediate signing of a Framework Agreement and Shareholders’ Agreement. These embedded the reforms into contract: 16% free-carried equity for the Treasury Registrar, board seats for government, and a list of reserved matters requiring state consent.
In 2025, Perseus and the government signed an Addendum, raising the state share to 20% and clarifying governance. That increment, above the statutory 16%, shows how Nyanzaga is not just following law but embodying it. It also signals political pragmatism: a negotiated settlement to remove ambiguities, align incentives, and cement partnership before construction ramped up.
Nyanzaga thus carries the reforms not as retrofits, but as its DNA.
Fiscal regime in practice
The fiscal terms embedded in Nyanzaga show how the reforms play out in practice.
- Royalties & fees: 6% royalty on gross revenue, 1% clearing fee on exports.
- Corporate tax: 30% on net profit.
- Equity: 20% of dividends flow directly to the Treasury Registrar.
- Other contributions: annual environmental fees, training levies, and CDA obligations at 0.7% of revenues.
In aggregate, Tanzania captures roughly half of the project’s net cashflows. This is far more than in the pre-2017 era, when state benefits were limited to royalties and taxes, with no ownership stake.
The debate is whether this fiscal package is sustainable. For critics, it risks leaving investors thin margins, especially at lower gold prices. For advocates, it ensures Tanzanians finally share directly in their resources.
Nyanzaga is the litmus test. If the mine can thrive under these terms, it proves Tanzania’s model is investable. If it falters, the reforms may be cast as overreach.
Local content enforcement
If state equity is the headline reform, local content is its daily enforcement. Under the regulations, Nyanzaga must meet binding quotas: 90% of employees must be Tanzanian within five years; expatriates are permitted only where skills are scarce, and each must have a succession plan with a local understudy. Suppliers must be Tanzanian-owned where possible, and all contracts are logged and audited by the Mining Commission.
For Perseus, this creates both challenge and opportunity. The skills gap is real: heavy equipment operators, metallurgists, and geotechnical engineers are scarce. Training academies and apprenticeships will need to run at scale. On the supply side, Tanzanian firms often lack capital or standards to meet mining contracts, but joint ventures and mentoring can build capacity.
The politics are sharp. Communities and Parliament alike will track contracts, watching for “fronting”, foreign firms masquerading as local. Failure to meet thresholds risks fines or even licence pressure. Success, however, embeds the mine in Tanzania’s industrial ecosystem, ensuring benefits outlast the ounces.
Section 5, Community Development Agreements (CDAs)
A second pillar of the reforms is the Community Development Agreement (CDA), mandatory for all large mines. Nyanzaga must commit at least 0.7% of annual revenues to local projects. That is millions of dollars each year once production begins.
Unlike voluntary CSR of the past, the CDA is a binding contract negotiated with district councils and village leaders. Priorities will likely include schools, clinics, boreholes, and feeder roads. But the political symbolism is greater: communities are no longer passive recipients of corporate goodwill; they are legally entitled to a share of mining benefits.
The challenge will be expectations. Villagers may demand more than 0.7% can deliver, especially in the first years. Spreading funds too thin risks symbolic but shallow impact; concentrating on fewer projects risks alienating those left out. Transparency and participation are crucial: if communities see clear projects, a functioning school, a clinic with staff, a borehole with water, trust grows. If not, the CDA risks becoming another grievance log.
Policy risks and stability
Reforms were designed to hardwire state sovereignty into mining. But rigidity brings its own risks. Investors worry about bureaucratic delays, ever-expanding obligations, or political shifts around elections. Tanzania’s history of abrupt policy changes lingers in boardrooms.
Yet stability has improved since 2021. Agreements like Nyanzaga’s 2025 addendum show pragmatism: ambiguities clarified, government stake increased, partnership affirmed. Investors see a shift from confrontation to collaboration.
The risk remains that future administrations could push for higher state take or stricter controls. But Nyanzaga’s governance model, with government equity, board seats, and transparent agreements, actually reduces incentive for unilateral change. By aligning the state’s revenue with the mine’s success, reforms embed shared interest.
Compared to Ghana’s lighter, more stable regime, Tanzania still looks heavier. But compared to DRC’s volatility or South Africa’s regulatory drift, Tanzania’s compact looks disciplined. Nyanzaga is the test: can a reformed, more demanding Tanzania still deliver projects that attract capital and deliver ounces?
Law on the ground
For Nyanzaga, geology may decide ounces, but law will decide legitimacy. The 2017 reforms are not abstract statutes; they are lived in resettlement villages, in local supplier contracts, in CDA-funded schools.
If Nyanzaga thrives, it will prove Tanzania’s reforms were not a deterrent but a recalibration, sovereignty balanced with investability. If it falters, critics will say the laws were too heavy-handed, choking investment.
The verdict will not be handed down in Parliament or courtrooms. It will come on the ground: in whether families resettled live better, whether Tanzanian firms grow stronger, whether communities see boreholes and classrooms, and whether the Treasury sees its 20% dividends on time.
Nyanzaga is therefore more than a mine. It is the first true test case of Tanzania’s mining reforms, a policy experiment poured into steel and stone. By 2027, when first gold flows, Tanzania will know whether its bold legal gamble paid off.
