International Development Association Project Paper on a Proposed Additional Credit in the Amount of Sdr 32.7 Million to the United Republic of Tanzania for the Sustainable Management of Mineral Resources Project

This Project Paper seeks an additional credit in an amount of US$45 million to the United Republic of Tanzania for the Sustainable Management of Mineral Resources Project (SMMRP). The original Project Development Objective (PDO) was to strengthen the government’s capacity to manage the mineral sector, to improve the socioeconomic impact of large-scale and small-scale mining for Tanzania and Tanzanians and enhance private local and foreign investments. The additional financing retains the PDO of the original project but puts greater emphasis on the part which aims to improve the socioeconomic impact of large-scale and small-scale mining for Tanzania and Tanzanians. The scaling up would address the following challenges: difficulty in identifying suitable geological environment for artisanal miners, inadequate training and demonstration centers for artisanal and small scale mining (ASM) and lack of knowledge in value addition (faceting, carving and jewelry), marketing and financial access. To that end, the project expects to expand activities in two of the original components: component A, improving the benefits of the mineral sector for Tanzania (artisanal and small-scale mining, local economic development planning, and skills development); and component B, strengthening governance and transparency in mining. No new activities are anticipated for component C. The project retains the fourth project component (component D) intended for project coordination, management and monitoring and evaluation. In order to improve the socio-economic benefits of mining, the government has adopted a two-prong approach: (i) improving the linkages of large scale mining (LSM) with local communities through better integration of corporate social responsibility programs and local development planning in mine affected areas; and (ii) encouraging the formalization and sustainable development of ASM as a means of boosting local entrepreneurship and employment in mining.