Securing a Social Licence to Operate?

The report examines the Tanzanian mining sector, noting that while it contributes modestly to GDP (2.3%), it accounts for approximately 45% of foreign earnings. It highlights a significant gap between public perceptions of mining profitability and the operational realities of the industry. A case study of Barrick Gold reveals varying levels of social legitimacy across its mines, with the North Mara mine facing severe challenges including criminal activity and community mistrust, while the Buzwagi mine was designed to follow global best practices. The report recommends greater fiscal transparency through EITI compliance and the creation of a national mining forum.

• Mining's contribution to Tanzania's GDP is relatively modest at 2.3%, yet its export value represents approximately 45% of the country's foreign earnings.
• The Tanzanian government has set a target for the mining sector to contribute 10% to the GDP by 2025.
• There is a sharp dissonance between public perceptions of mining profits and reality; the public often assumes profits are simply gold production multiplied by price, ignoring high operating costs and the long-term nature of mining investments.
• Tanzania's mining tax laws generally follow international standards and are not considered overly biased toward companies, though the manner in which the government handles regulatory reviews creates investor uncertainty.
• Mining tax revenue as a percentage of total domestic tax increased from 0.22% in 1998 to 4.65% in 2006, with the majority of this growth driven by royalty payments and PAYE taxes on salaries.
• The mining sector is characterized by a dualistic structure where large-scale multinational companies produce 96% of gold but employ only one-fifth of the sector's workforce, with the rest being artisanal miners.
• Barrick Gold's operations in Tanzania show varying levels of social legitimacy: a 'social licence to operate' appears to be functional at the Bulyanhulu, Tulawaka, and Buzwagi mines, but is absent at the North Mara mine.
• The North Mara mine faces extreme challenges, including criminal intrusions where 200 to 4,000 people enter the mine illegally to steal ore, and a December 2008 invasion that caused $10 million in damage.
• The Buzwagi mine was developed using lessons from previous failures, incorporating a Relocation Action Plan (RAP) and Environmental and Social Impact Assessment (ESIA) to ensure community acceptance and environmental compliance.
• Barrick's local procurement in Tanzania represents 55% of its total inputs, spending $233.2 million on Tanzanian goods and services in 2008 compared to $185.3 million on outside suppliers.
• The report identifies a failure in the 'trickle-down' effect of mining; poverty indicators in some mining regions, such as Shinyanga, remain significantly below the national average despite the presence of large mines.
• The report recommends that the Tanzanian government release its response to the Bomani Commission Report to reduce sector uncertainty and move toward full EITI compliance for greater fiscal transparency.

APA

Goldstuck, A., & Hughes, T. (2010). Securing a Social Licence to Operate? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/02/SAIIA_Research_Report_no_7.pdf

Chicago

Goldstuck, Alison, and Tim Hughes. Securing a Social Licence to Operate? South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/02/SAIIA_Research_Report_no_7.pdf.

Wikipedia

{{cite report |last1=Goldstuck |first1=Alison |last2=Hughes |first2=Tim |title=Securing a Social Licence to Operate? |publisher=South African Institute of International Affairs |date=February 2010 |url=https://saiia.org.za/wp-content/uploads/2010/02/SAIIA_Research_Report_no_7.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{goldstuck2010securing, author = {Goldstuck, Alison and Hughes, Tim}, title = {{Securing a Social Licence to Operate?}}, institution = {South African Institute of International Affairs}, year = {2010}, month = feb, url = {https://saiia.org.za/wp-content/uploads/2010/02/SAIIA_Research_Report_no_7.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }