Nature and determinants of linkages in emerging minerals commodity sectors : a case study of gold mining in Tanzania
Date
2011-03
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The Open University
Abstract
This is a study of backward linkages in emerging mineral economies in Sub-Saharan Africa as a potential driver of industrial development in the region. The study covers two sub-sectors namely the exploration and production in a case study of Tanzania‟s large-scale gold mining operations. For data collection, the study used open-ended interviews, semi-structured interviews, observations and reviewed relevant secondary documents. Based on the two case-studies, the study makes the following broad findings: (i) the Tanzanian large-scale gold mining sector is dominated by multinational companies (MNCs), (ii) the MNCs source high critical and high complex goods and services mostly through long established external supply channels. Local content is limited to low critical products, such as food and beverages, (iii) there is virtually no local value-added in imported high critical and high complex goods and services, and (iv) there is higher volume of local content in the exploration sub-sector than in the production sub-sector. The study concludes that linkages are determined by both public and private sector policies. The main public policy problem is government failure to translate and implement long-term macro policy vision (Vision 2025) to sectoral policies (the mining sector policy) with appropriate sanctions and incentives. And the main private policy problem is the external suppliers driven outsourcing strategy.
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Keywords
MINERALS, GOLD, TANZANIA, MINERAL COMMODITIES, PRECIOUS STONES, INDUSTRIAL DEVELOPMENT, TRANSNATIONAL CORPORATIONS, PUBLIC SECTOR, PRIVATE SECTOR, PUBLIC SECTOR