The World Bank Report No: ISR16459 Implementation Status & Results Tanzania Sustainable Management of Mineral Resources (P096302) Public Disclosure Copy Operation Name: Sustainable Management of Mineral Resources (P096302) Project Stage: Implementation Seq.No: 10 Status: ARCHIVED Archive Date: 03-Nov-2014 Country: Tanzania Approval FY: 2009 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Key Dates Board Approval Date 09-Jun-2009 Original Closing Date 30-Jun-2014 Planned Mid Term Review Date 15-Oct-2012 Last Archived ISR Date 11-Aug-2014 Effectiveness Date 22-Sep-2009 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 12-Nov-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) To strengthen the Governments capacity to manage the mineral sector to improve the socioeconomic impacts of large and small-scale mining for Tanzania and Tanzanians and enhance private local and foreign investment. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost A. Improving the Benefits of the Mineral Sector for Tanzania: Artisanal and Small-scale Mining, and 15.90 Local Economic Development, B. Strengthening Governance and Transparency in MIning 8.70 C. Stimulating Mineral Sector Investment 25.00 D. Project Coordination and Management 2.50 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Moderate Implementation Status Overview This ISR reports on progress for the period May through September 2014. During this period, the Bank completed one supervision mission from August 29th to September 19th 2014. The mission focused on: i) in response to the government’s written request for additional project financing, development of the first draft of the Additional Financing Project Paper, including amendments to the current project’s Results Matrix; ii) monitoring the remainder of the current Operation's activities following the one year extension provided in July Page 1 of 9 The World Bank Report No: ISR16459 2014; and iii) participate in the launch of the first of two pilot projects on artisanal and small-scale mining (ASM) under the Multi-Stakeholder Partnership Initiative (MSPI). More details on the activity can be found in the summaries under the Components section of the ISR. Considering the strong progress made in completion of outstanding activities in Component A and B over the last one year, the Team has proposed to upgrade the PDO rating from Moderately Satisfactory (MS) to Satisfactory (S). Public Disclosure Copy Project Development Objectives are being met with steady performance of the mining sector over the Project period. This is evidenced through considerable increases in revenues collected, the relatively stable ranking of Tanzania by the Frasier Institute as a mining investment destination, and the reduction in processing time for mineral rights. The reforms under the original project have resulted in significant improvements in policy (increase in the Tanzania's Frasier Institute policy perception index by over 10 points from 32.4 points in 2010 to 43.0 points in 2013), institutional capacity (significant reduction in license processing time), and geological knowledge (increase in survey coverage from 3% to over 15%). In addition, gold production reached 40 metric tons per year and taxes exceeded US$150 million in 2013. Extractive sector revenues quadruple from US $ 102.1m in 2009 to US $ 468.2m in 2012, and mineral exports boomed during the project period, peaking at 44.79% of total exports in 2011 and fueling rapid economic growth. Of the 6 Project Development Outcome (PDO) indicators, 4 have been successfully completed, requiring no further monitoring. Of the 17 Intermediate Project Indicators, 4 have been successfully completed, requiring no further monitoring. All other indicators are on track to achieving the final Project targets set forth in the Project Appraisal Document (PAD) by June 2015. Implementation progress remains Satisfactory. During the above mentioned period, the project has further increased disbursements, now representing 90% of the total Project's cumulative amount. This is up from 83% noted in the last ISR. At this time, only US$5.13 million remains undisbursed of the total project allocation of US$50 million). The Task Team reviewed the procurement plan with the PMU for remaining undisbursed funds during the August-September 2014 mission, and is assured that full project disbursement will be achieved by the new extension time-frame of end of June 2014. Remarkable progress continues for the small-scale mining sub-component that had known significant delays in start-up up until 1 year ago. The Small Grants Program, Phase 1, has disbursed of the initial US$500,000 envelope upwards of US$350,000 to 10 small-scale mining grantees. Of these 10 grantees, 2 are women-led businesses or women's mining associations. Based on the success to date of Phase 1, the mission agreed to increase the total Small Grants Allocation to US$1M, allowing for another 10 grantees to benefit directly from financial support to their small-scale mining operations before the close of the Original Project in June 2015. Multi-Stakeholder Partnership Initiative (MSPI) on ASM-LSM Coexistence in Tanzania launched the first pilot site in Rwamgasa, near Geita. The launch was attended by over 150 persons representing government, small-scale miners, large-scale mining companies, the World Bank, and local community members. The launch officially opened the mine site chosen to benefit from a combination of government and mining company technical and financial support. The site was chosen through a detailed technical and organisational assessment of the Primary Mining License (PML) Holder, carried out by a third-party Tanzanian firm reputed in the domain of ASM development. The launch took the opportunity to demonstrate appropriate mineral processing technology to be used as part of the pilot's objective to increase mineral recovery and production for small-scale miners operating in Tanzania. Locations Country First Administrative Division Location Planned Actual Public Disclosure Copy Tanzania Mara Region Tarime District Tanzania Not Entered United Republic of Tanzania Tanzania Tanga Region Tanga Region Tanzania Kilimanjaro Region Same District Tanzania Kilimanjaro Region Rombo District Tanzania Rukwa Region Mpanda District Page 2 of 9 The World Bank Report No: ISR16459 Country First Administrative Division Location Planned Actual Tanzania Not Entered Morogoro Urban Public Disclosure Copy Tanzania Mbeya Region Mbozi District Tanzania Mbeya Region Mbeya Region Tanzania Singida Region Manyoni District Tanzania Lindi Region Mandawa Tanzania Iringa Region Makete District Tanzania Kilimanjaro Region Kilimanjaro Region Tanzania Kigoma Region Kasulu District Tanzania Shinyanga Region Kahama District Tanzania Kagera Region Kabanga Tanzania Singida Region Itigi Tanzania Mwanza Region Geita District Tanzania Mbeya Region Chunya District Tanzania Shinyanga Region Bukombe Tanzania Kagera Region Bukoba District Tanzania Kagera Region Biharamulo District Tanzania Arusha Region Arusha Tanzania Kagera Region Kagera Public Disclosure Copy Tanzania Mtwara Region Mtwara Region Tanzania Ruvuma Region Mbinga District Results Project Development Objective Indicators Page 3 of 9 The World Bank Report No: ISR16459 Indicator Name Core Unit of Measure Baseline Current End Target Percentage increase of household income Percentage Value 0.00 200.00 100.00 levels in selected ASM communities Date 07-Oct-2014 30-Jun-2015 Public Disclosure Copy Comments 2009-baseline US$4/day ASM baseline finalized and US$8/day estimates 16$/day. The significant difference in figures can be explained by fluctuating gold prices andmethods for calculating household income levels. The Team continues to work with the ASM baseline consultants to determine the bestmethod for determining and tracking this indicator as part of the AF project Percent of citizens in participating communities Percentage Value 12.00 35.00 60.00 who consider that their views have been taken Date 31-Dec-2010 07-Oct-2014 30-Jun-2015 into account in the local economic development Comments Based on field survey under Participatory planning strategic planning process (perception survey) the Benefits Study occurred in Geita, Sunya and Tarime. In addition Zonal offices now submit their plans to Districts and Regional authorities for input and consultation. Time to process mineral rights (exploration Months Value 18.00 0.25 2.00 licenses, 2 months). Date 09-Jun-2009 30-May-2014 30-Jun-2015 Comments 15 Months was a rough 1 week now to complete No more than two months for estimate at appraisal and was processing. This indicator has review and approval of underestimated. been achieved. prospecting licenses. Annual publication of mining sector revenue Yes/No Value No Yes Yes Public Disclosure Copy Date 30-Jun-2009 30-May-2014 30-Jun-2015 Comments In addition to the 4 TEITI Fourth report and compliant reports, TMAA, MEM and the status Parliamentary sessions are now publishing revenue figures. This indicator hasbeen achieved. Page 4 of 9 The World Bank Report No: ISR16459 Improvement in Tanzania's ranking as a mining Text Value 48/71 for policy ranking & N/A Increase of 2-3 points/palces investment destination as evidenced by 22/71 for mineral potential or more over baseline in one independent investor survey (Fraser Institute). or both indicators. Public Disclosure Copy Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Tanzania has risen back up this year to 62nd Percentage increase in mining revenue Percentage Value 0.00 100.00 5.00 Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments First EITI Report showed According to TRA figures, all Revenues increase of 5% consolidated revenue of taxes contributed by mining in over baseline. $100million. calendar year 2013 amounted to 1.15 billion $. This represents over a hundred percent increase from baseline target. This indicator is achieved. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Improved performance in selected ASM Text Value 4.7 tons of gold TBD TBD coummunities as evidenced by increased Date 09-Jun-2009 07-Oct-2014 30-Jun-2015 production (quantity and USD). Comments Baseline. Yearly targets to be The Small Grants have made developed in tandem with their first disbursements but it ASM baseline survey (see is too early to track changes PDO indicator 1). in increased production. This will be done at the end of the Project extension (June 2015). Improved performance in selected ASM Text Value 5 50 500 communities as evidenced by number of Date 30-Jun-2009 07-Oct-2014 environment plans (mercury, and tailing Public Disclosure Copy Comments 50 PMLs have environmental management) in place. plans in place. This target will most likely need to be revised before the end of Project extension, andwill remain a focus of Additional Financing activities. Page 5 of 9 The World Bank Report No: ISR16459 Number of small scale miners who received Text Value To be developed during 4000 TBD during project formal training in mining. project. development. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Public Disclosure Copy Comments Miners have benefited from Zonal Mining Offices training. Number of ASM associations and enterprises Text Value 20 250 250 established and operational under a mineral Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 right. Comments Number of ASM licenses. Text Value 11000 14880 Trend to be tracked. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments MEM database as of October 2014 Number of LGAs in large-scale mining areas Text Value 0 3 3 with strategic plans developed in participatory Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 manner. Comments Geita, Sunya and Tarime Mining technical skills accreditation framework Text Value None In progress Completed framework. established. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Draft framework has been developed for the Gemological Institute Revised mineral law and regulations Text Value Revisions ongoing Completed Revisions and dissemination disseminated completed. Date 09-Jun-2009 07-Oct-2014 30-Jun-2015 Comments 2008 Mining Law was revised in 2010 and adopted. Further revisions included ASM demarcation procedures, online application procedures, changes to the Mine Public Disclosure Copy Development Agreement and clarification of roles and responsibilities of the Commissioner. Draft legal and regulatory frameworks on value Text Value None Draft completed. Draft completed/ addition developed. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Draft law is developed and under review. This indicator is considered successfully achieved. Page 6 of 9 The World Bank Report No: ISR16459 Percentage of pending mineral rights Percentage Value 0.00 100.00 80.00 applications reduced. Date 01-Mar-2009 07-Oct-2014 30-Jun-2015 Comments Pending/backlog of This indicator is considered Public Disclosure Copy applications from Oct 2007- successfully achieved. March 2009. 10000 applications in total. Number of mines inspections (including Text Value 1,000 per year Standard practice now. Regular and systemized environmental) and remedial actions; number inspections and audits of audits. Date 09-Jun-2009 07-Oct-2014 30-Jun-2015 Comments This indicator is considered successfully achieved. Percentage of increase in collection of license Text Value 3% 180% 5% fees. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments License fees collected is reported by the Zonal mining offices on a quarterly basis. This indicator is considered successfully achieved Specific environmental and social policies and Text Value None Yes Yes guidelines (mine closure, mercury) developed. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments SESA, Resettlement Policy and Environmental Framework. This indicator is considered successfully completed. Computerized environmental management Text Value None Yes Yes system developed. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Percentage of country covered by geophysical Percentage Value 3.00 15.70 14.00 airborne surveys at 1:100,000 scale. Public Disclosure Copy Date 09-Jun-2009 30-May-2014 30-Jun-2015 Comments 3% of the country covered by This indicator is successfully airborne geophysics achieved. Area of coverage (14%) by new geological Text Value 8% 12% 14% maps (1:100,000 scale), as percentage of the Date 09-Jun-2009 07-Oct-2014 30-Jun-2015 total area of Tanzania. Comments Near completion. Percentage of geological maps digitized (map Text Value 39% 60% 65% MIS). Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Page 7 of 9 The World Bank Report No: ISR16459 Comments This indicator is on track to be achieved by June 2015. Area covered by new metallogenic map of Text Value Nil 70% 100% Public Disclosure Copy Tanzania for mineral promotion as percentage Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 of total area of Tanzania. Comments This target is on track. Annual mining sector statistics report Text Value None Regular Regular published. Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Four sources: TEITI, MEM quarterly reports, Parliamentary reports. Percentage of public satisfaction with the Text Value 6% 15% 35% mining sector (survey). Date 30-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Survey completed by MEM. Project monitoring and evaluation. Text Value Project start In progress Successful M&E Date 09-Jun-2009 07-Oct-2014 30-Jun-2015 Comments Project M&E system, building ASM Baseline completed, Regular project reporting will on results framework, to be agreed with Client, and be used to track project developed in Year 1 successfully incorporated into results. the Additional Financing proposal. Data on Financial Performance (as of 17-Oct-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P096302 IDA-45840 Effective 09-Jun-2009 22-Jul-2009 22-Sep-2009 30-Jun-2014 30-Jun-2015 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed Public Disclosure Copy P096302 IDA-45840 Effective XDR 33.50 33.50 0.00 32.36 1.14 97.00 Disbursement Graph Page 8 of 9 The World Bank Report No: ISR16459 Public Disclosure Copy Key Decisions Regarding Implementation The August-September Supervisory Mission confirmed that the project development objective remains valid. The Project's performance, after the one-year extension that was approved in June 2014, continues in accordance with the schedule and all activities are expected to complete. Based on the success of the original project, per request of the Government of Tanzania, the Bank is in the process of preparing an Additional Financing for SMMRP in the amount of US$30 million which will continue implementation of components related to economic development, diversification and ASM. The preparation process just started and appraisal stage is expected to be reached by mid February 2015. Restructuring History Level two Approved on 25-Jun-2014 Related Projects Public Disclosure Copy P151124-TZ Sustainable Management of Mineral Resources, P152916-Additional Financing for P096302 Page 9 of 9