Tanzania - Mineral Sector Development Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 24382 IMPLEMENTATION COMPLETION REPORT (PPFI-P8180; IDA-26480) ON A CREDIT IN THE AMOUNT OF US$11.6 MILLION TO THE UNITED REPUBLIC OF TANZANIA FOR A MINERAL SECTOR DEVELOPMENT TECHNICAL ASSISTANCE PROJECT June 27, 2002 Sector Management Unit: CMNDR Country Management Unit: AFCO4 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2001) Currency Unit = Tanzania Shillings (Tsh.) Tsh.1.00 = US$ 0.00109 US$ 1.00 = Tsh.916.30 FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS FEMATA Federation of Miners Associations of Tanzania EIA Environmental Impact Assessment GS Geological Survey GOT Government of Tanzania ICR Implementation Completion Report MD Minerals Division MEM Ministry of Energy and Minerals MEM MIGA Multilateral Investment Guarantee Agency MRD Mineral Resource Department NDF Nordic Development Fund NGO Non-governmental Organization NVTC National Vocational Training Centre PMU Project Management Unit PSR Project Status Report QAG Quality Assurance Group REMAS Regional Miners Association SEAMIC Southern and Eastern Africa Mineral Centre SIDO Small Industries Development Organization SSM Small-scale Minifig STAMICO State Mining Corporation TAMIDA Tanzania Mineral Dealers Association TAWOMA Tanzanian Women Miners Association TCM Tanzania Chamber of Mines UNIDO United Nations Industrial Development Organization Vice President: Callisto Madavo Country Manager/Director: James W. Adams Sector Manager/Director: Peter van der Veen Task Team Leader/Task Manager: Leo Maraboli  TANZANIA MINERAL SECTOR DEVELOPMENT TECHNICAL ASSISTANCE PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 7 5. Major Factors Affecting Implementation and Outcome 12 6. Sustainability 14 7. Bank and Borrower Performance 15 8. Lessons Learned 17 9. Partner Comments 18 10. Additional Information 26 Annex 1. Key Performance Indicators/Log Frame Matrix 27 Annex 2. Project Costs and Financing 28 Annex 3. Economic Costs and Benefits 30 Annex 4. Bank Inputs 31 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 33 Annex 6. Ratings of Bank and Borrower Performance 34 Annex 7. List of Supporting Documents 36   Project ID: P002812 Project Name: MINERAL SECTOR DEV. Team Leader: Leo Maraboli TL Unit: CMNPO ICR Type: Core ICR Report Date: June 27, 2002 1. Project Data Name: MINERAL SECTOR DEV. L/C/TFNumber: PPFI-P8180; IDA-26480 Country/Department: TANZANIA Region. Africa Regional Office Sector/subsector: NN - Mining & Other Extractive KEY DATES Original Revised/Actual PCD: 12/03/93 Effective: 10/15/94 12/21/94 Appraisal: 01/20/94 MTR: 09/30/96 07/31/97 Approval: 07/28/94 Closing: 12/31/99 12/31/2001 Borrower/lImplementing Agency: Government of Tanzania/GOVT: Ministry of Energy & Minerals (MEM) Other Partners: STAFF Current At Appraisal Vice President: Callisto Madavo Edward Jaycox Country Manager: James W. Adams Robert Hindle Sector Manager: Peter van der Veen Peter A. Van der Veen Team Leader at ICR: Leo Maraboli Seung Choi ICR Primary Author: Leo Maraboli 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: HS Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The main objectives of the project were to attract new private mining investment to Tanzania, and support the growth of mineral exports, under environmentally sound conditions. They also aimed to increase production, regularize and improve the overall conditions of small-scale miners, with emphasis on arresting and mitigating the adverse environmental impacts resulting from the rudimentary and ineffective  technologies used by most of these miners. The project was to provide the government with necessary technical, managerial and material support to implement a mining development strategy, which would promote the growth of mineral exploration and mine development by both, foreign and local private sectors, in an environmentally sustainable manner. The main objectives set by the government and the associated initiatives were crucial for expanding further the economy of the country, and realistic from a technical perspective. They were recognized as particularly valid considering the: a) potential for developing an industrial-scale mining sector to produce 20-30 tons of gold annually, over a medium term of 5 to 7 years; b) favorable natural endowment conditions for diversification of mineral production, through the potential for improving existing gemstone mining activities and developing additional deposits, as well as for mining base metal minerals to produce nickel; and c) opportunity to facilitate the growth of diamond output by 200-300 percent. These project considerations were fully justified and supported initially by the results from studies on the mineral endowment of Tanzania; and later by the results of the project, which exceeded these target levels nearly by double; and presently by additional growth anticipated from new projects and expansion of some of the new mines. The objective related to artisanal and small-scale mining (SSM) was highly relevant for the country, considering the growing trends of such activities conducted mostly informally, at the time of project initiation, and their eventual boom towards the end of the 1990s. Informal mining indeed represented a major and widespread source of income, but had adverse impacts on nearby communities and the environment, including a latent threat to biodiversity, and to other important activities including tourism and agriculture, as well as fishing at lake Victoria, which are of major importance for the national economy. Accordingly, the efforts under the project aimed at helping to improve the situation of the miners, mainly through the: a) execution of extensive baseline surveys to detennine existing practices, main issues and constraints; b) determination of strategy and phased steps to improve their activities and working conditions; c) establishment of pilot centers based on simple and environmentally friendly technologies to disseminate best practice for mining, processing and safety; d) provision of extension services and training; and e) incorporation of environmental standards and monitoring arrangements. The project was consistent with the Bank's country assistance strategy to support the development of the private sector Tanzania. It strengthened resolutely the government's National Investment Promotion Policy of 1990. This policy recognized the importance of the private sector, reducing and subsequently removing requirements for government equity participation in mining ventures, but it attracted only initial interest of private investors in the Tanzanian mining sector, because of not including crucial mineral policy aspects and related modem legal, regulatory and fiscal regimes. These remained as deterrents to investment, and only minor new investments materialized prior to 1994. The govemment recognized these deficiencies, and assigned a high priority to attract more attention from potential investors. It sought assistance from the Bank to make Tanzania intemationally competitive, by establishing a modem and comprehensive investment framework to promote and expand private sector investment in the mining sector. Having completed a mineral sector review of Tanzania in 1990, the Bank was able to respond quickly with a Mineral Sector Development Technical Assistance project in December 1994, to support mineral sector reform. The Bank's involvement in the project was geared to enhance the govemment's capacity to: a) promote mineral investments; b) modemize policy, regulatory and fiscal frameworks; c) oversee, administer and enforce compliance with applicable laws and regulations; and d) restructure mineral institutions and agencies, incorporating intemational experiences and practices, particularly on environmental matters. The Bank assistance also supported the govemment in the mobilization of financing, and coordination of - 2 -  activities with international agencies such as the Nordic Development Fund (NDF), the Australian High Commission, and bilateral agencies such as the Canadian International Development Agency, interested in the mining sector of Tanzania. The project also took into account three main risk factors: * The risk ofpossible future interest by existing state owned mines and government for an expanded role in mining. This risk was alleviated through the new Mineral Policy approved by the Cabinet in 1997, which restricted the role of government to stimulate and guide private mining investment by administering, regulating and facilitating the growth of the mining sector through a well organized and efficient institutional framework. The risk was minimized further by the divestiture, to the private sector, of the subsidiaries owned and operated by the State Mining Corporation (STAMICO). * The risk of adverse impacts caused by the continuing trend of rushes of artisanal and small-scale miners, to areas with new discoveries of gemstones and/or gold. This risk was alleviated by strengthening arrangements and capacity building at the Ministry of Energy and Minerals (MEM) to: a) provide rapid field response, to process mineral rights applications from artisanal and small-scale miners during rush conditions; b) ensure security, with law and order arrangements for compliance and enforcement of assigned mineral rights, which resulted in significantly more orderly operations and conditions; c) initiate extension services and training, from the start of new mining activities, to ensure the establishment of adequate mining and processing practices, rather than dealing later with complex corrections of adverse practices and legacies; and d) establish simple and environmental satisfactory pilot centers, to familiarize with best mining, processing and safety practices, as a first step towards adopting community and miners based arrangements to establish district processing and service facilities. * The risk ofpossible surfacing of impediments for the sustainability of components implemented under the project. The project endeavored to decrease this risk by incorporating into its design institutional restructuring and development of main functions, to enable the continuation of specific crucial activities for technological improvements, introduction of environmental control and management, and establishment and operation of a mineral sector cadastre. 3.2 Revised Objective: There was no revision of project objectives as presented in the MOP and the Loan Agreement. 3.3 Original Components: The project consisted of the following four components: A. Legal, Regulatory, Fiscal and Environmental component The main focus of this activity was to simplify the complicated and contradicting regulatory setup so that investors, both local and foreign, could easily identify the legal and fiscal regimes as intemationally competitive and transparent, and responsive to health and safety issues. It embraced principally the revision of the mining legal and regulatory regimes including environmental matters, and determination of improvements for the fiscal regime. Specific activities included: (i). Lezal, Regulatory and Fiscal Framework. It was carried out with the assistance of intemational and - 3-  local consultants (UK/TZ), with considerable input from local associations and NGOs. It involved: a) Review and analysis of existing laws and regulations concerning mineral sector activity, with emphasis on exploration, mine development, mineral rights, sectoral investments, and health and safety standards and practices; b) Review and improvement of Model Mineral Investment Agreement, and preparation of appropriate modem policy, legislation and regulations; c) Preparation of detailed operational manuals relevant to the above; and d) Conduction of appropriate training programs for applicable relevant Government staff; (ii). Environmental Framework. It was carried out with the assistance of international and local consultants (UK/TZ), with substantial input from local associations, NGOs, mining companies relevant stakeholders. It involved: a) Preparation of an inventory of existing environmental liabilities within the mining sector, and conduction of related quantitative analysis on pollution and health hazards associated with mining activity; b) Preparation of appropriate environmental legislation for mineral activities; c) Formulation and design of institutional procedures for environmental management of the mining sector, with emphasis on arrangements to monitor and address appropriate compliance, and enforcement of environmental law and regulations; and d) Preparation of a detailed operational manual for environmental management, which deal with the above mentioned aspects. B. Institutional Strengthening of MEM's Mineral Resource Department (MRD) component The main focus of this activity was to provide technical assistance, consultancies, training, equipment, and logistic support to enable MRD to fully and effectively implement the new mining sector policy, strategy, legal and regulatory regimes. Emphasis was placed to strengthen the organizational, manpower and logistic capabilities of MRD, and its zonal offices, to enable efficient and periodic monitoring of mineral activities and environmental performance. Specific activities included: (i). Actions to strengthen the field operations of MRD by implementing a Priority Work Program. It was conducted with the assistance of local consultants, and centered on the following main activities: a) mine safety and environmental field inspection practices, and related compliance; b) management of mineral rights, including legal and procedural aspects on the provision, registration, and termination of rights; and c) revenue collection, determination of fees and royalties, and associated accounting and administrative activities. (ii). Actions designed to strengthen the geological services of MRD by facilitating the execution of main activities to enable the development, publication and dissemination of basic geological information for promotional purposes. The main selected activities included: a) Compilation of available geological data, field checking, editing and publishing of approximately 40 regional geological maps with scale of 1 :100,000; b) Partial rehabilitating of the existing mineral laboratory; c) Overhaul and maintenance of the existing data base, and establishment of a mineral cadastral system; and d) Dissemination of geological data to the investors community. (iii). Actions to restructure the organization of MRD, with emphasis towards enhancing the capacity building of staff. It focused on measures to: a) restructure the responsibilities and organization of MRD b) undertake active professional manpower development and training; c) conduct skills assessment and career development programs, and d) provide required equipment. C. Artisanal and small scale mining component - 4 -  The activities under this component were geared to identify and appreciate the crucial issues of this sub-sector, in order to test options for improvements. These involved technology transfer from other mining countries, including health and safety aspects, with relevant tailoring to Tanzanian conditions, giving full recognition to the acceptability by small-scale and artisanal miners, and enterprises, as fundamental to enable adopting improved practices, technologies and management. They were carried out with assistance from local consultants, and cooperation from the Ministries of Mines of mining countries mainly from Africa, Asia, South-America and North-America. It included the main following tasks: a) completion of a baseline survey and formulation of a development strategy; b) provision of technology information and operational demonstrations; and c) provision of training for capacity building. D. Project Management Unit component The project financed the project management unit (PMU), which would manage and coordinate project activities under MEM, including staff, incremental operating costs, office equipment, and transport. 3.4 Revised Components: None of the project components was modified formally. However, the approach used for the implementation of some components was adapted to circumstances and priorities found in Tanzania during actual project execution: * Legal, Regulatory, Fiscal and Environmental component: Considerable expansion of these activities resulted from the approach used, with comprehensive dialogue and exhaustive determinations for mineral policy and strategy, on basis of exhaustive participation of stakeholders. * Investment promotion: Major increase of emphasis for minerals investment promotion, including strategies and arrangements for attracting investments. These involved the development and dissemination of basic information, with determinations of promising target areas, and their examination through aerial surveys and associated interpretations. * Mineral rights administration: Recognition of the need to modernize further the processing and administration of applications received from mining companies, through the establishment of a comprehensive cadastral mineral system to record, monitor, and facilitate the provision of information, on the status and location of mineral concession areas, and support for the development of required capacity. * Institutional Strengthening of MEM's agencies: a) increased linkages between institutions and agencies involved in the mining sector; b) revised phasing for strengthening activities, to reflect field priorities and ensure achievement of project results, under initial implementation conditions with acute scarcity of capacity and human resources; c) increased concentration on capacity building, needed for project implementation and timely achievement of results, and d) downsizing zonal offices improvements, to avoid over-extending MRD's physical and human resources, and allow subsequent dimensioning from baseline surveys and formulation of programs for small-scale and artisanal miners. * Artisanal and small scale mining: Change of phasing to improve small-scale and artisanal mining due to human resource constraints, and need for: a) baseline characterizations, deternination of options, and program formulation; b) design, acquisition and installation of suitable pilot testing equipment; and d) preparation of MRD's staff, to train miners and provide extension services. - 5 -  * Gemstone and carving training center: Introduction of training for gemstone polishing and carving, to take opportunity of the abundance of semiprecious stones, for developing new handicrafts activities in rural areas. * Environmental and Social aspects: Incorporation of extensive participation of stakeholders and communities to address constraints, priorities and initiatives related to environmental, social, health, safety and education matters in the mining sector. The total cost of the project was US$12.54 million, which is US$1.4 million below the US$13.9 million estimated in the MOP. A credit balance amounting to US$0.9 million remained to be cancelled at the end of disbursements of the IDA Credit on April 30, 2002. The balance concemed components for small-scale mining pilot testing, training in gemstone polishing carving, and rehabilitation of regional mining offices. These were delayed by the project slowdown experienced during 2000-2001. However, all project objectives had been ensured and achieved through two extensions to the loan closing date, and more extensive contracting of national consultants, instead of intemational ones as originally planned, principally regarding the legal and institutional reform process, assistance to small-scale miners activities. 3.5 Quality at Entry: The Quality Assurance Group (QAG) did not assess formally the quality at entry of the project. However, the reviews conducted during the preparation of the ICR concluded that quality at entry was generally satisfactory. The objectives of the project were consistent with the priorities of the Government, and the country assistance strategy for Tanzania, which responded pragmatically to the fundamental issues that affected the mining sector. The selected approach to mineral sector reform also reflected recent experiences from Bank mineral development projects in Latin America and Westem Africa, which indeed constitute effective instruments to achieve coherent sector growth and sustainable results. MEM reinforced its technical capacity with the assistance of external consultants, which provided adequate technical design quality, to meet the overall objectives of the project, and reflect findings from stakeholder consultations held during project preparation. Overall, the project design was not considered difficult to manage for MEM, principally because its main components would be executed with the assistance of consultants. In addition, during project preparation, main risk factors were also identified, examined and addressed. The broad scope of the project resulted in numerous project sub-components (21), which in combination with the institutional weaknesses of MEM, and the production difficulties and geological information constraints augmented project risks since the start of implementation. Consequently, during execution, a major emphasis was given to prioritize, phase and adjust the planned activities, in order to enable the achievement of clear results, by reflecting these circumstances and adopting a more focused approach. This was done by promoting an active participation of relevant institutions and stakeholders, which eventually accounted for more strengthened inter-Ministerial and inter-agency linkages, with enhanced inputs and commitment. This approach accentuated particularly environmental matters and social aspects, including rural life and sustainability, and facilitated the transformation of the mineral sector of Tanzania, in a very short time, to its present status as the main destination of investments for mineral exploration and mine development in Africa. It is anticipated that such approach will be fruitful again, in the short term, for considerations on second generation mineral sector reforms, which are needed to consolidate the realized achievements, and to address further in-depth improvements on the agenda for social, environmental and sustainability matters. The institutional components of the project did run into several difficulties from time to time, including changes at the project management unit, with associated difficulties for ensuring continuity of - 6 -  professionally qualified services to conduct the implementation. These were addressed in pragmatic and participatory manner, which expedited the determination and adoption of solutions to deal with existing issues. From the mineral commodities perspective, it is recognized that project preparation did not address the risks related to downturns of commodity prices, or possible major events with adverse impacts on the global trends for mineral investments, such as the Bre-X scandal in Indonesia and effects from the East Asian crisis. On the other hand, it is also recognized that quantifications on the above mentioned situations would have been of no major consequence under the circumstances of Tanzania, at project design. This is because the enabling mineral frameworks established under the project made possible to take stock of very favorable geological conditions (Archean greenstone belts), which although identified had not yet been examined comprehensively, or explored in detail, to accentuate their significance. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Highly Satisfactory. The project succeeded in achieving the objectives. Under the project, the government created a structural enabling environment for the development of the mining sector, which facilitated an outstanding growth of investments, production and related service, supply, support and indirect activities. The direct and indirect investments and expenditures generated exceeded the costs incurred by the government to establish this environment, by a ratio of over 110 to 1. Additionally, the resulting increases of formal annual sectoral export values exceeded the expenditures of the Government by a ratio above 40 to 1. These represent by far the largest performance achieved for a comparable development project in Tanzania. The major achievements and outcome of the project are: * Policy and Legal Framework. A modemn mineral policy and strategy was prepared under the project, and approved by the government in 1997. It was followed by the formulation of new mining law enacted as the Mining Act of 1998, which was subsequently complemented with regulations approved in 1999. This regulatory package constitutes a competitive framework for the development of the mining sector. It includes laws and regulations for small-scale mining, and for environmental controls and management. Additionally, the matter of compensation requirements for resettlement of land tenants and users is also duly addressed under existing Tanzanian law, which has enabled the resolution of some compensation cases through payments for crops, land, facilities and mineral works. After three years of service, the regulatory package for the mineral sector has proven to be satisfactory and effective. However, the ongoing participatory dialogue on sectoral issues indicates a growing need for second generation reforms over the short- to medium-term, to adjust and improve this package, in order to address full coverage of sustainability issues. This should focus on reflecting the trend of persistent global evolution on social aspects, the continued growth and importance of small-scale mining on which further information continues being gathered, and the further customization of environmental management to match the particular conditions of Tanzania. * Institutional Framework The responsibilities of the State as a mining operator were eliminated and the institutional setup of the mining sector was restructured with modem functions and organization, and with strengthened capacity, in accordance with the role adopted by the government to: (a) stimulate and guide private mineral investments; (b) facilitate, administer, monitor and regulate mineral activities and sectoral growth through a modem and efficient institutional framework; (c) compile and - 7 -  disseminate basic promotional geo-information; and (d) provide extension services to small-scale and artisanal miners. * Artisanal and Small-scale Mining. Achievements included: o incorporation of improved organization structure and processing, through pilot testing with model district facilities suited to the conditions of artisanal miners, and worked on toll basis and batch mode, to process separately minerals from different clients. Plant operation is by contractor, with agreed purchase arrangements, under oversight of a commission with representatives of MEM and district authorities, miners, and community stakeholders. However, only one of the eight pilot-demonstration plants included in the project design was undertaken and completed due higher than anticipated costs, adoption of a phased approach, and delays in procurement o involvement of local communities and miners, in addressing the orderly establishment and enforcement of mineral rights during events of mining rushes, through participatory public meetings with participation of mineral authorities, regional authorities, and involved dealers o facilitation of diversified economic activity, through the establishment of a gemstone polishing and carving center in Arusha, to provide training for new handicraft activities in rural areas, and for manufacturing gold jewelry. This is a joint effort with one of the large local gold producers, to transfer skills and know-how from South Africa and Peru o fomnalization of the Tanzanian Women Miners Association - TAWOMA. This group includes representation from most of the country. Its significant advocacy initiatives address support and recognition of women in mining, provision of training and technical needs, and development of financing mechanisms. They also account for contributions to improve intemational markets for Tanzanian gemstones (Knowledge and Learning Center: Findings - issue 189 - August 2002). o introduction of practices to decrease adverse environmental impacts, reduce the release of polluting substances, and reduce job-related toxic hazards. This involved mainly: the adoption of better mining and processing equipment, suitable to Tanzanian conditions, that can be built locally; reductions and improvements in mercury use; and improvements in tailings disposal. o provision of extension services through guidance for gcology and mineral reserves, and improvement of mining and processing practices, with incorporation of technology and procedures to improve reserve recovery. * Mining Production and Investment. The anticipated increase on mineral investments and mining production was exceeded by far during 2000. The number of prospecting and mining licenses increased from 9 in 1990 to 250 in 2001. Total mineral exports increased from only US$15 million in 1996 to US$312 million in 2001, and are anticipated to exceed US$400 million during 2002. Revenues from gold exports rose from virtually nil in 1996 to US$120 million in 2000, and are anticipated to exceed US$326 million during 2002. This scenario could increase significantly over the medium-term, with the expansion of production and some of the existing mines, and active exploration at two major gold prospects and a large deposit of base metals. Additionally, a low-altitude aerial survey is about to be initiated under financing from the Nordic Development Fund, to establish a pipeline of promising target areas, which can be used to attract potential investors. * Environmental Management. In respect of environmental management and controls, for large-scale - 8 -  mining the conditions are established to provide satisfactory monitoring of sectoral performance, compliance with regulations, and related enforcement. For small-scale and artisanal mining, ongoing activities are on schedule at pilot-testing stage, but considerable work still remains, out of the scope of the project, on the formulation of mechanisms and arrangements to establish satisfactory environmental controls and management. * Indirect Benefits. The project provided many indirect benefits for Tanzania, which cannot be quantified in monetary terms, but make extremely important contributions to the economy: o Contractors are increasingly employing services from Tanzanians suppliers in many mineral sector activities, ranging from drilling at exploration stage to tire servicing for the new mines. Local suppliers are increasingly supplying the industry with goods, both local and foreign, needed to support mineral exploration, mine development and mine operation. As planned, local consultants were utilized extensively and successfully throughout the project. o The project increased the skill levels of many Tanzanians, both by formal training and on-the-job development of know-how thus ensuring that benefits from the mineral sector can be are shared by many. O The exploration activities and the new mines have brought with them improved infrastructure, not only for their operations, but also for associated communities. o The Geita-Mwanza area, with three new gold mines operating and dynamic exploration activity underway is witnessing and taking opportunity of major improvements in employment opportunities, new infrastructure, evolution of air transport capacity, and growing demands for services and support facilities. o The progressive evolution of improvements in services for expatriate community both in Dar es Salaam and in Mwanza, which has broadened to housing, education, markets, hotels and restaurants. This is important if the Tanzanian mining sector is to attract and retain highly skilled personnel - essential for a successful mining industry. 4.2 Outputs by components: A. Legal, Regulatory, Fiscal and Environment Frameworks Policy Framework. Prior to the preparation of new mineral law and regulations, significant efforts were undertaken under the project, as preceding steps to formulate and establish formally a modem mineral policy and strategy. It involved the active encouragement of participatory inputs and establishment of consensus with stakeholders, principally through the actions of specific commissions, workshops, roundtables and seminars. This was completed and approved in 1997. Re2ulatory, Fiscal and Environmental Frameworks. The new policy and strategy enabled the preparation and passing of new Mineral Law in 1998, which focused particularly on mineral rights, security of tenure, small-scale mining, and environmental aspects. It was followed during 1999, by the development of improved model mineral investment agreements, and with comprehensive regulations, which also included stipulations and guidelines for small-scale and artisanal mining, health and safety, and environmental control and management. Additionally, these were paralleled by the establishment of more competitive fiscal conditions for the mineral sector, in line with intemational trends, and with regulatory improvements of the general investmnent frameworks of the country. -9-  Environmental Management. Environmental surveys were conducted in areas with current large- and small-scale mining, and zones previously mined. Results were addressed at workshops and roundtables for social and environmental assessments of issues related to mineral activities. These enabled the development of an integrated multi-institutional approach to monitor and maintain a detailed information management system for the environmental conditions, issues and performance of the mining sector. B. Institutional Strengthening of MEM's Mineral Resource Department (MRD) Field Operations of MRD. The improvement of field operations was addressed through the execution of a Priority Work Program, which received strong institutional support throughout the implementation of the project. It improved the field inspection capabilities and practices, the provision and administration of mineral rights, and the collection and administration of revenues from fees and royalties, which was of particular importance given the progressive growth of the small-scale mining sub-sector. Geological Services of MRD. The improvement of geological services was achieved through the execution of all planned components, to support the development, publication and dissemination of basic geological information for investment promotion. These strengthened significantly the geological database of the countiy. They included the preparation and publication of 40 geological maps, partial rehabilitation of laboratory, improvement of existing mineral and geological information systems and databases, promotion of information to investors, and strengthened capacity to develop basic geological information. The actual requirements for a cadastral system and geological information exceeded substantially the scope originally anticipated during design. The designed requirements were completed under the project. Additional co-financing was sought and received from the Nordic Development Fund, for further work to design and implement: a) a comprehensive cadastral system for mineral rights, which can also handle efficiently the processing and administration work related to the numerous small-scale and artisanal miners; and b) an aerial survey with related interpretations, to develop basic promotional information on selected promising target areas with favorable geology. The design of both activities has been recently completed, and emphasis is now placed on the procurement of required services. Reorganization of MRD. The capabilities of MRD were improved through organizational restructuring, and enhancement of manpower and logistic capabilities. It involved principally a major re-definition of responsibilities, provision of resulting requirements of capacity building, and supply of relevant equipment necessities. The formulation of the institutional reform was conducted without delays, but its implementation was affected by project team changes, and shifting conmmitment from mineral authorities, which resulted in serious slippage. However, it regained momentum from early 2001 until project completion. The new organizational structure was operative by the end of 2001. It resulted in: a) improved management of mineral rights, with modem arrangements to provide and administrate mineral rights and environmental permits; b) improved procedures and practices to deal with periodic mining-rushes of artisanal miners; c) establishment of procedures, and preparation of operation and training manuals, and d) provision of modem infrastructure; and e) substantial capacity building. C. Artisanal and Small-scale Mining The project focused on preparing a comprehensive and detailed diagnosis of the small-scale and artisanal miners, with emphasis on their working, social, environmental and health conditions, and on their particular organizational structure and trading practices. An inventory of small-scale and artisanal mining sites in - 10 -  Tanzania was completed by a local consulting group. It was followed by extensive consultations and analysis of the situation found in other mining countries. This resulted in the identification of options for Tanzania, which were then addressed by integrating all aspects of the activities and conditions of such miners. This involved participatory workshops and roundtables with stakeholders, which duly included miners, representatives from the communities and traders. Subsequently, emphasis was placed to apply information on the structure of the miners at mining rushes, introduce district plants, diversify to gemstone carving and polishing, establish a women miners association, disseminate best practice, and provide extension services and training. Several procedures manuals were developed and published, in both the Swahili and English languages, addressing health and safety in small-scale mining. 4.3 Net Present Value/Economic rate of return: The formal net present value or economic rate of return are not appropriate measurements for this technical assistance project, given it was not directly related to an investment project. 4.4 Financial rate of return: Not applicable 4.5 Institutional development impact: Substantial. The institutional development impact of the project was substantial. The mandates, responsibilities and functions of the institutions and agencies of the mineral sector were modemized, and now are consistent with the role of the State as a regulator of mineral sector activity. A revised structure for MD was developed as part of overall reform of the civil service. However, though approved, the implementation of the new structure was delayed considerably, due to project team changes, and fluctuating commitment from mineral authorities. Steady momentum was regained from early 2001 due to the fast growth of mining activities, which indeed over-extended the existing institutional resources and capacity, thus compelling to modemize the structure and capacity of MEM and its mineral units. The institutional capabilities were improved through reorganization, capacity building, and upgrading of logistic capabilities. Consistent efforts were made to enable the reorganization, modernization and sustainability of these institutions and agencies, in line with intemational best practices, while reflecting the specific conditions of Tanzania. These consisted of capacity building through formal and on-the-job training, infrastructure through re-equipment and rehabilitation of offices, purchase of data processing equipment and establishment of computerized databases, and gradual decentralization through strengthening of regional offices for administration of mining rights and inspectorate responsibilities, including environmental monitoring. The backlog of over 2,000 license applications, which existed in 1994, had been cleared and revenue collection has increased almost tenfold. The preparation of procedural manuals had been delayed pending completion of the restructuring of MD, but was subsequently completed. The improvement of zonal offices was downsized, to avoid over-extending further the physical and human resources of MRD, and to allow dimensioning any further improvements on the basis of actual requirements related to the large-scale mines and activities related to small-scale and artisanal miners. The existing offices were made functional, with equipment and capacity to carry functions related to mineral rights, mines inspectorate, and provision of extension services. However, while extensive training of MD staff has been completed, MD has developed - 11 -  only a limited ability to critically analyze applications for mine development, assess mine operations, and make realistic projections of govemment income for the sector. Further reformn implementation is underway to complete: a) the modemization of policy and performance monitoring at MEM; b) the modem administration of mineral rights with a comprehensive cadastre being funded by NDF to handle large-scale, small-scale and artisanal miners; c) the establishment of an Environmental Mining Unit to work in close coordination with the Ministry of the Environment on activities of environmental management, monitoring, compliance, enforcement, and also evaluation of EIAs; and d) the further expansion, maintenance and updating of mineral information systems and databases, including intemet interfaces, and operational networks. It is recognized that existing civil service conditions, under which MEM and its agencies operate, might become a source of staff tumover, which could affect the continuity of service of staff trained under the project, and the quality of staff to be recruited in the future. This last point is a matter of considerable concem, given that continued rapid sectoral growth and evolution of increasingly complex issues will pose increased management/administration requirements, and cutting-edge capabilities to anticipate and address social and environmental issues. In this connection, initial steps have recently been taken to physically separate from MEM and modularize, to some extent, the existing mining sector development project unit, and a team responsible for developing and analyzing sectoral information 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The increasing trend of mineral exploration investments in Tanzania, and its leadership as the largest destination of such investments in Africa, was affected considerably by the combined effects of lower intemational metal prices and increasing difficulties to raise funding. In 1998, sharp declines of metal prices resulted in significant reductions of exploration programs at major mining companies. Additionally, during 1997-1998, the Bre-X scandal in Indonesia and the East Asian crisis resulted in ensuing lack of financing, which eroded the capability of smaller exploration companies in the "junior" category to raise funding for mineral exploration in countries with remote situations such as Tanzania. The local climate for mining was considerably affected by complaints about deaths that allegedly took place in 1996, at the Bulyanhulu exploration area, during a government operation to fill illegal mining pits. The allegations involved human rights abuses, forced evictions, and killings of artisanal miners. They were investigated by several independent parties, which consistently found they could not be substantiated. Bulyanhulu was subsequently developed into a mine by a Canadian company, which acquired financial interest in the exploration prospect during March 1999, and became involved in project development four years after the alleged events, during 2000. It is worth noting that prior to the development of the Bulyanhulu mine, the area was worked by artisanal miners under very unsafe conditions, which resulted in frequent accidents and death of miners. Rudimentary shafts were dug too close to each other, and scaffolding used was unsafe, which resulted in regular mine subsidence events and accidental deaths. Other repeated cause of death was asphyxiation due to lack of underground ventilation. Additionally, the area faced many of the social and environmental problems of artisanal mining, including, child labor, mercury contamination effects, and lawlessness. This situation has changed entirely today. The mining activities are in accordance with intemational environmental and social standards. About 1,500 permanent and contract jobs have been created, and - 12 -  indirect employment has exceeded 7,500 jobs. Also, extensive training is being provided to employees in order to develop the skills and know-how required for all mine related activities. 5.2 Factors generally subject to government control: Some initial delays, including the establishment of an adequate project implementation unit accounted for slippage of about five months until the credit became effective, in December of 1994. Some of the project components were also affected by delays in initiating cofinancing arrangements with NDF for the environmental monitoring and control components, and for aerial surveys. These eventually resulted in NDF support for the surveys, and for cadastral systems for the administration of mineral rights. The buildup of momentum for mineral sector development was strongly supported by the Government. It peaked in 1998, with a dialogue of two days held in Arusha, with chief executive officers of mining companies, in which the Government was represented by the President, with the Minister of Finance and the Minister of Mines and Energy. However, continuity was subsequently affected by ministerial and other high level changes at MEM, and by lengthy serious difficulties on the energy sub-sector, which diverted strength and commitment from mineral sector initiatives and implementation since 2000. This resulted in a major project slowdown with a sharp drop in disbursement trends. It was followed by major team changes in early 2001, with ensuing discontinuity, and related adverse impacts on project completion activities. Nevertheless, a renewed high-level attention to the mineral sector is progressively underway since early 2001, partly due to the progressive resolution of energy related issues, and also because of concem on the over-extended institutional situation of the mineral sector. Such attention is reflected in the current implementation of further institutional reorganization and strengthening, outside the project. Finally, the improvement of field offices was delayed considerably by the combined effects of: a) insufficient funding initially assigned for civil works; b) Government directives to use vacant public buildings, which finally could not be made available: and c) lack of counterpart funding through 1997. However, such delay facilitated the already mentioned downsizing improvements, to avoid over-extending MRD's physical and human resources, and allow subsequent sizing from surveys and programs for small-scale miners. 5.3 Factors generally subject to implementing agency control: The structure of MEM, which includes centralized high-level management and administrative functions for its minerals and energy sub-sectors, was a factor that delayed the project activities underway in 2000, and initiation of other scheduled work. While MEM allocated more high-level resources to the difficulties on energy, the mineral sub-sector underwent decision-making vacuum, which was reflected on protracted decision-making experienced by the project, which affected investment promotion work, mineral sector development activities, and participatory social and environmental events. 5.4 Costs andfinancing: The total cost of the project was US$12.54 million, which is US$1.4 million below the US$13.9 million estimated in the MOP. A credit balance amounting to US$0.9 million remained to be cancelled at the end of disbursements of the IDA Credit on April 30, 2002. The balance concemed components for small-scale mining pilot testing, training in gemstone polishing carving, and rehabilitation of regional mining offices. These were delayed by the project slowdown experienced during 2000-2001. However, all project objectives had been ensured and achieved through two extensions to the loan closing date, and more extensive contracting of national consultants, instead of international ones as originally planned, principally regarding the legal and institutional reform process, assistance to small-scale miners activities. - 13 -  6. Sustainability 6.1 Rationale for sustainability rating: Likely. On balance, the sustainability of various components of the project is likely. Even though several skilled professionals have left the MD and the Geological Survey for employment in the private sector, which could adversely impact the efficient administration of the reformed sector, the government is continuing the process of improving the skills of local professionals. The government is also making good progress concerning interventions in the small-scale and artisanal mining sub-sector. Funding for the requirements of MD which was a significant problem early in the project, has largely been overcome as provision has been made for retention in MD of some of the funds being collected from the sector. The sustainability of the new policies and achievements of the project need to be enhanced through continuing activities to take stock of achievements, providing further in-depth follow-up on priority issues, and addressing evolving constraints. The sustainability of MEM has been reinforced further, through training provided under the project to staff of MEM and its agencies, and by progressive formalization of informal small-scale and artisanal miners, thereby incorporating them into the formal system. Additionally, the introduction of a currently operational retention revenue scheme in July 1998, allows an adequate retention level from payments being received by MEM from ongoing exploration and mining activities to be used in order to sustain some operations of MEM, under specific conditions. This scheme provided US$2,135,142 in FYI999/2000, and US$2,216,762 in FY2000/2001. It was observed that revenues from rights and land fees for exploration and mining increased from US$94,799 in 1995/1996, to US$1,553,243 in 1999/2000, and remained rather stable at US$1,458,765 during 2000/2001. The resources provided under the above-mentioned scheme are sufficient for the mineral sector to sustain the achievements in the long term, including capacity for sector management, and maintenance and renovation of infrastructure established under the project. Sustainability of the sector, however, could be affected by low intemational mineral prices, and/or by continued financing scarcity for exploration and mine development investments. On the other hand, if Tanzania maintains a sufficient level of these mineral activities, then MEM and its agencies will derive necessary resources from revenues related to mineral rights such as geological and mining fees, mineral rights/annual rents and royalties, and from state financing, which would ensure sustainability. In this context, there is already an awareness that the continued growth of the mining sector, and ensuing sustainability, would depend on preparing a pipeline of geological target areas, while investments continue over the next 3-4 years principally from expansion of the Geita and Bulyanhulu mines. This would maintain investment and production growth, and provide a 3-4 year window to develop, mature and promote new target areas near Lake Victoria and other locations. 6.2 Transition arrangement to regular operations: The successful transition to regular operations is facilitated by the fiscal regime adopted during project implementation, which is favorable for the sustainability of the mining sector. In addition, the introduction of an operational retention revenue scheme in 1998 would facilitate sustaining MEM operations from payments received on exploration and mining activities. However, political commitment, and risks related to the centralized high-level management and administrative functions for the minerals and energy sub-sectors remain as crucial factors to ensure the sustainability. 7. Bank and Borrower Performance - 14 -  Bank 7.1 Lending: Satisfactory. The Bank maintained a proactive attitude in the opening of dialogues for the development and reform of the mineral sector with: i) the Government, MEM and relevant institutions and agencies; ii) mineral associations, NGO's and stakeholders; and iii) international agencies, cofmanciers, and bilateral agencies. In addition, the Bank maintained a good skill mix, and an excellent working relationship with the Borrower and related agencies. The project preparation was well organized, systematic, and satisfactory. During the project appraisal, the Bank assessed the risks and benefits of the project, and reflected them in the project documentation. In the early stages of implementation, contributions from the Bank headquarters was reduced because of the frequent change of task managers, and the use of temporary task managers with little sectoral exposure. The local staff with project responsibility, however, remained unchanged during implementation, thereby providing much needed continuity, and assistance to PMU staff and new task managers. 7.2 Supervision: Satisfactory. After project effectiveness, staff changes at the Bank and MD underwent a renewal of close working relationships, which continued through project closure. This excellent working relationship was acknowledged at the highest levels in Tanzania. Over the seven years of project implementation, there were 17 supervision missions, about two missions annually. The Bank supervision missions included mining engineers, specialists in mining sector development, environmental aspects, and regulatory matters. These were complemented with specific inputs from consultants on small-scale mining, gemology, strategy, law, environment, and social matters. Aide-Memoires were regularly prepared and shared. The Form 590s and Project Status Reports (PSRs) rated realistically rated the performance of the project in respect of achievement of objectives and project implementation. The Bank also commented on studies and initiatives executed under the project. Throughout the implementation of the project, the supervision missions and the PMU made extensive use of participatory approaches to facilitate the examination and awareness of mining development activity and issues. These included: workshops, seminars and presentations based on participatory orientations, which also helped foster relationships between the Government and mining investors; and dialogues on concerns, constraints, needs and options for the sustainable improvement of the environment to attract private investment for mining. 7.3 Overall Bank performance: Overall, the Bank performance was satisfactory during project preparation, appraisal and implementation. Borrower 7.4 Preparation: Satisfactory. The Borrower was intimately associated with project preparation at all stages. The officials of the government, and staff of assistance agencies worked closely with Banks staff throughout the preparation period. All government participating agencies collaborated fully, which facilitated project formulation and design, as well as the Bank's related processing activity. Additionally, the Borrower made valuable contributions towards the implementation methodology, and the identification of risks both in its implementation and sustainability. -15-  7.5 Government implementation performance: Satisfactory. The government demonstrated strong and continuing commitment to mineral sector reform at all levels. Throughout the project, the Minister of Energy and Minerals and the Permanent Secretary provided leadership, while the Commissioner of Minerals provided important technical contributions to the success of the project. It is particularly remarkable and worth repeating, that on many occasions, the President of Tanzania, personally participated in dialogues with actual and potential investors in the mineral sector, assuring them of his country's commitment to reform of its mineral sector, and inviting their participation. Additionally, he also led Tanzanian delegations to several countries, promoting mineral investments and manufacturing downstream semi-precious products in the country. The government has also announced that an annual Presidential Award will be given for Leadership and Excellency in Environmental Management. This much-awaited award will constitute an important signal to international mining investors and stakeholders, about the environmental performance of the new mines, and about the seriousness placed by the government on the compliance with sound environmental terms. During the implementation period, the Borrower was frequently hampered by important issues such as: (i) coordination difficulties between project components; (ii) delays in starting work programs due to lack of counterpart funding from Borrower in a timely manner; (iii) inadequate supervision of consultants due to lack of experienced counterpart personnel; (iv) procedural delays in the tendering process particularly in respect to civil works; and (v) changes in project manager and composition of PMU. These issues were, however, duly recognized, addressed and resolved by the government. 7.6 Implementing Agency: Satisfactory. The performance of the Project Management Unit (PMU) became satisfactory after an initial period of familiarization with the Bank procedures. However, its performance was constrained at times by factors outside its control, such as lack of local funding for the project, and instances of slow decision-making within both the government and the Bank. The PMU executed daily activities smoothly, and coordinated closely with the Bank. There were only three project managers during the implementation period, which provided stability. However, major team changes occurred in the last year of the project, with some PMU staff moving to the private sector, and others reallocating within MEM. The resulting discontinuity affected adversely the completion of some components and the Bank disbursements, while placing considerable stress on the replacement staff. 7.7 Overall Borrower perfornance: The overall performance of the Borrower was satisfactory. Activities of PMU: a) process procurement and disbursements; b) prepare and implement training plans; c) coordinate and integrate work plans; c) ensure availability of funds; d) organize inter-institutional and inter-agency linkages; organize participatory events with stakeholders; e) organize sector promotional events; f) monitor and report on project progress and prepare quarterly reports g) organize preparations for mid-term review; and h) manage project accounts and organize preparation of audits. 8. Lessons Learned * Commitment to Institutional Reform. The vital precondition for successful mineral sector reform is a comprehensive and sustained commitment from government authorities. This should be imparted to the staff of sectoral institutions, in order to implant in them a strong commitment to the reform, and a sense - 16 -  of ownership and responsibility for the reform process. Their participation in seminars, workshops, training programs, and exposure to best practice and experience from mining countries with successful reforms would be useful for this purpose. * Integrated and Phased Approaches for Mineral Sector Development. The mineral sector reform should be approached in an integrated manner, especially on the main components of initiatives for the reform, such as cadastral systems, extension services for small-scale miners, investment promotion activities, and development of basic information for promotional purposes. * Stakeholder Participation and Social Dimensions. Formulation and implementation of mineral sector technical assistance programs need to address associated social dimensions, incorporating consistent social strategies and elements. This should be initiated during project preparation, built-in throughout project implementation, and subsequently continued by sectoral and related government institutions over the long term. The process should aim to enhance stakeholder participation and consensus on the objectives and results of mineral sector development, thereby ensuring more sustainable and improved contributions from mining activities to society. * Poverty Alleviation. There is an increasing need to: a) identify and quantify carefully the direct and indirect impacts of the growing mineral activity; and b) formulate regional development initiatives and measures, to take stock of the economic activity being generated by mining non-renewable mineral resources. In addition to health, social and environmental matters, such initiatives and measures should focus particularly on options for diversification, to ensure sustainability beyond mining in the improvement of rural life, which is inherently based on depleting resources. * Information Development and Management. The basic information developed under mineral sector projects is fundamental to support sectoral development, and other activities such as land use, rural development planning, and resolution of potential conflicts. At project preparation, with the participation of stakeholders it is essential to deternine: a) the public good nature of information to develop and maintain in databases, which could include geological, geophysical and/or geochemical data; b) the specific information products to be developed for specific consumer groups; c) the simplest and lowest cost mechanisms to avail data products to users and public, including brochures, publications, CDs, web sites, and internet; d) the provision of training for potential users, on how to use availabe data; and e) the adequate monitoring to ensure appropriate data usage. * Capacity Building and Local Consulting Development. The approach of the project in the use of foreign and national experts produced very successful results. While short-term foreign specialists contributed to introduce cutting edge approaches, practices and technologies, their inputs were supported by national consulting firms and individuals. This enabled to absorb and tailor the received inputs into a Tanzanian context and reality, as observed in small-scale mining, gemology and inspectorate functions, with sustainability results substantially enhanced. In addition, the study tours of authorities and institutional staff to other mining countries, with targeted seminars and workshops on main issues, constraints, and best practice also yielded positive results. * Institutional Capacity Building. The programs for institutional capacity building should be formulated and implemented in close relationship with components of specific mineral sector development projects, and related activities to be executed by institutions and agencies under such projects. This strategy enhanced considerably the appreciation of staff for the training received, as well as their commitment. The project also benefited directly from the prompt application of such training, with very positive results obtained on aspects of capacity building for mineral policy and law, assistance to small-scale - 17 -  mining, environmental and social matters, and training arrangements for cartography. * Supervision. The task team's frequent use of low cost email and telecommunications, enabled direct dialogues with the project management and relevant parties in the country, and facilitated the Bank's routine follow-up of project activities and evolving situations in real time, as a virtual side-partner, rather than as a supervisor. It also enabled the Bank to deal pragmatically and timely with complex situations, institutional weaknesses and uncertainty, and facilitated the identification and adoption of solutions, sometimes under challenging conditions. * Project Management Unit. The modularization of the PMU and its physical separation from MEM, in parallel with a team to develop and analyze sectoral information played a key role in the success of the project. * International and Bilateral Assistance. Transparent and well-coordinated support from the Bank and NDF resulted in avoiding duplication, and prevented from placing excessive demands on the already over-extended situation of MEM and its agencies. 9. Partner Comments (a) Borrower/implementing agency: The project was successful in attracting major private investments for exploration and mine development, on the basis of building a favorable, conducive and internationally competitive climate to attract investors. This included the support of an improved institutional framework, with adequate information to ensure sectoral development and administration, with adequate arrangements for monitoring, compliance and enforcement, from regulatory and environmental perspectives. The small-scale and artisanal mining activities also improved during the implementation of the project. Their legal, technical, social and environmental conditions have benefited from upgrading the provision and enforcement of mineral rights, which have enabled a better situation of law and order, decreasing difficulties during mining rushes, and reducing situations of property invasions by illegal miners. Community based approaches are being used to address and clarify issues on mineral rights. Pilot processing is being used to improve mineral processing on the basis of integrating small producers into larger scale facilities, with better technology and environmental practices. Main difficulties resulted principally from issues on the energy sub-sector, which drained considerably the efforts needed for mining sector development during the last two years of project implementation. In this respect, the main achievements of the project were realized prior to the last two years of implementation. The stability of the project coordination unit proved to be crucial for the obtained achievements. Some main lessons leamed include the need to design and implement social, environmental and communication strategies with comprehensive community participation on issues related to sector development, and with well defined socio-economic elements to improve the conditions of small-scale and artisanal miners. Another important lesson is the need to ensure continuity, by using permanent staff at involved institutions and agencies, instead of short-term contract experts, which would enable to build capacity within these institutions and agencies. Additionally, local consultants should be used to the extent possible, to enhance project sustainability, build contract capacity, and reduce costs. The sustainability of the sectoral framework institutions and main functions should be strengthened for the reformed framework, through provision of adequate funding. The challenge for MEM is to sustain - 18 -  activities, identify and address main weaknesses, and to identify funding sources to support the continuous improvement of: a) the promotion of exploration and mine development; b) the provision and administration of mineral rights for small-scale and artisanal mining; c) the environmental and technical situation of small-scale and artisanal mining; and d) the relationships between the communities and mining development. (b) Borrower's Evaluation Report 1. Background. Tanzania has a diverse mineral resource base and a long history of mining in gold, diamonds, gemstones and industrial minerals. At the time of project identification in 1992, the mining sector had been in continuous decline for more than two decades. While the share of GDP contributed by mining had been as high as 10% in the 1950s, the share had declined to less than 2% in 1994. This decline resulted mainly from long-term macroeconomic instability and state interventionist policies, which discouraged private mining. These policies for the mineral sector were implemented through the State Mining Corporation (STAMICO), which was charged with exploring for, developing and marketing the mineral resources of the country. In 1990, the Government introduced a "National Investment Promotion Policy" which recognized the importance of the private sector, reduced and subsequently removed the requirement for government equity participation in mining ventures. While the private sector showed an interest in the Tanzanian mining sector, the absence of a clear policy for the sector combined with the lack of modem legal, regulatory and fiscal regimes remained a deterrent to private investment. Little new investment was undertaken prior to 1994. This was in contrast to other African and South American countries where extensive exploration, especially for gold, had been underway. 2. Obiective. The Government recognized these deficiencies that Tanzania should have been attracting more attention from potential investors and sought the assistance of the IDA to put in place a new investment framework to promote and expand private sector investment in the mining sector. As the IDA had already completed a mineral sector review for Tanzania in 1990, it was able to respond quickly to the request. A Mineral Sector Development Technical Assistance Credit (CR 2648 TA) in the amount of SDR 8.9 million (equivalent to US$ 12.5 million) was extended to the Government in December 1994 to support sector reforn with the objective of attracting private investment, both foreign and local, into the sector. More explicitly, the primary objective of the project funding was to provide the Government with the necessary technical, managerial and material support for the design and implementation of a new private sector oriented mining development strategy that would be environmentally sustainable. A secondary objective was to assess the operation of the extensive small scale and artisanal mining in Tanzania with a view to improving the technology, working conditions, environmental and social aspects of this sub-sector. 3. Description. The project was designed with three main components. A Legal, Regulatory, Fiscal and Environmental Component which would undertake the revision of the mining laws and regulations, the modification and clarification of the fiscal regime, and the establishment of an environmental management framework. The second component, the Institutional Strengthening Component was designed to improve the organisational, manpower and logistical capacity of the Minerals Division (MD) and the Tanzania Geological Survey These two entities formerly constituted the Mineral Resources Department (MRD) to administer, regulate and promote the sector. The third component, the Small Scale mining Component was designed to collect baseline data, to formulate development strategy for the sub-sector, demonstrate simple - 19 -  environmentally friendly technologies and undertake some training of small scale and artisanal miners. Full descriptions of the above components are contained in Annex 1. 4. Implementation responsibilities. Implementation of the project was entrusted to the then Ministry of Water, Energy and Minerals (MWEM). A Project Management Unit (PMU) was created specifically for this purpose within the Minerals Division (MD). 5. Co-ordination with other donors. No other donors were formally identified as co-financiers. The Nordic Development Fund (NDF) has, however, supplemented the project through continuing assistance to the Minerals Division and the Geological Survey in the fields of geophysics, geochemistry and in the design of a modem minerals cadastre. 6. Stakeholder participation. Throughout the project implementation a continuing dialogue was maintained with the stakeholders both through meetings, roundtables and conferences (Annex 2) and on an informal level. The stakeholders included government agencies, NGOs, multilateral agencies, mining companies and consultants. A list of some of the key stakeholders is presented as Annex 3. Of particular note was a dialogue with the CEOs of many prominent mining companies which was held in Arusha in 1998. A highlight of this meeting was the presence of the President, H.E. Benjamin W. Mkapa, who personally extended an invitation to participate in the Tanzanian mining sector. 7. Achievements. The project broadly achieved the objectives by modemizing the legal and fiscal regimes, establishing an environmental framework for mining, strengthening institutional capacity, and improving the conditions in the artisanal and small scale mining sub-sector. The scheduled completion dates for key indicators are compared with the actual dates in Annex 4. Detailed analysis of the project achievements is presented below in Section D. 8. Sustainability requirements. A key requirement for a successful project is sustainability of achievements after project completion. The President's Memorandum for the project clearly identified the main risks for sustainability Failure to restore private sector confidence, lack of institutional capacity in MD, and the difficulties of intervention in the small-scale sub-sector. and provided for several built-in features of the project designed to enhance sustainability beyond project completion. The sustainability of this project is satisfactory in most aspects but there are significant risks for sustainability in others. Sustainability is discussed in Sec.D. Borrower Performance In broad terms the performance of the Borrower has been outstanding. The Government has demonstrated a strong and continuing commitment to sector reform at all levels. Throughout the project, the Minister of Energy and Minerals and the Permanent Secretary provided leadership while the Commissioner of Minerals has contributed significantly to the success of the project. It is particularly noteworthy, and worth repeating, that the President of Tanzania, H.E. Benjamin Mkapa, has personally participated on more than one occasion in dialogue with actual and potential investors in the mining sector, assuring them of his country's commitment to reform of its mining sector and inviting their participation. The performance of the Borrower in specific aspects of the project is discussed below. - 20 -  Role in project preparation: The Borrower was intimately associated with project preparation at all stages. All concerned agencies of the Government fully co-operated with IDA thereby facilitating the design of the project. The Borrower made a valuable contribution towards the implementation methodology and the identification of risks both in the implementation and in sustainability. Project Management Unit (PMU): The PMU has fulfilled the broad scope of its role PMU satisfactorily after an initial period of familiarisation with IDA procedures. In addition, the performance of the PMU has been constrained at times by factors outside its control e.g. lack of local funding for the project, s:ow decision making within both IDA and the Government. Implementation: Implementation of the project by the Borrower was hampered from time to time by: Difficulties with co-ordination between project components Delays in the start of work programmes caused by the failure of the Borrower to make counterpart funds available in a timely manner Inadequate supervision of consultants due to a lack of experienced counterpart personnel, Procedural delays in the tendering process especially with respect to civil works, and Changes in the project manager and the composition of the PMU IDA Performance IDA's performance was generally excellent, but affected by staff tumover at the start. It was consistent with the Govemment's development strategy and IDA's assistance strategy for Tanzania. IDA also maintained a proactive attitude in the opening of dialogues for the development and reform of the mineral sector with: i) the Govermment, MEM and relevant institutions and agencies; ii) mineral associations, NGO's and stakeholders; and iii) intemational agencies, cofmanciers, and bilateral agencies. In addition, IDA maintained a good skill mix, and an excellent working relationship with the Borrower and related agencies. The project preparation was also well organized, systematic, and satisfactory. During the project appraisal, IDA assessed the risks and benefits of the project, and reflected them in the project documentation. Some aspects of IDA performance are addressed in more detail as follows: a) on relationships, at early project stages, at identification and pre-appraisal, a very close relationship existed between IDA and the Borrower, but after project effectiveness, staff changes at IDA and MD teams required a renewal of close working relationships, which were achieved and continued through project closure. This excellent working relationship has been acknowledged at the highest levels in Tanzania; b) on staff changes, while still in the early stages of implementation, the effectiveness and contributions from headquarters was reduced by the combined effect from frequent task manager changes, and using temporary task managers with little sectoral expertise; c) on local staff, the IDA staff with project responsibility remained unchanged during implementation, providing much needed continuity, and assistance to PMU staff and new task managers; and d) on lessons leamed, the main lesson learned on the role of IDA concerned the significant advantages of: i) maintaining continuity of staff on IDA's team, and ii) involving task managers familiar with technical aspects of the project, or with successful experience in similar projects. Project Implementation and Achievements. Legal and regulatory framework - 21 -  The regulatory framework for the sector was reviewed and new draft legislation was prepared in the earliest stages of the project. Major achievements were: * The new Mining Law put in place an intemationally competitive legal and regulatory framework designed to attract and sustain private investment, both local and foreign. The new law was enacted as the Mining Act, 1998. * The regulations for the administration of the new mining code - Mining Regulations, 1999 - were prepared and are now effective. * A new Model Mineral Investment Agreement was prepared. * A new fiscal regime for the sector was designed which provided an internationally competitive tax structure while at the same time ensuring that Tanzania received an equitable share of the revenue both through income related taxes and a royalty. This new fiscal regime was promulgated as the Financial Laws (Miscellaneous Amendment) Act, 1997. Environmental framework: Regulations for environmental protection associated with mining were prepared and are now effective. However, the need both to establish an environmental management unit in the Minerals Division (MD) and to prepare detailed guidelines and codes of practice for managing, monitoring, compliance and enforcement of the regulations remain outstanding as of this date. Sector administration: The institutional development impact of the project was substantial. The mandates, responsibilities and functions of the institutions and agencies of the mineral sector were modernized, and now are consistent with the role of the State as a regulator of mineral sector activity. Some key aims of the project were to strengthen the ability of the Minerals Division (MD) of MEM to administer the sector, and to rehabilitate the facilities and capacity of the Geological Survey located at Dodoma. The latter were carried out under the project, and a revised structure for MD was developed as part of overall reform of the civil service. However, while approved, the implementation of the new structure was delayed considerably, due to project team changes, and fluctuating commitment from mineral authorities. Steady momentum was regained from 2000 due to the fast growth of mining activities, which had over-extended the existing institutional resources and capacity, making necessary to modemize the structure and capacity of MEM and its mineral units. The institutional capabilities were improved through reorganization, capacity building, and upgrading of logistic capabilities. Consistent efforts were made to enable the reorganization, modemization and sustainability of these institutions and agencies, in line with intemational best practice, while reflecting the specific conditions of Tanzania. These consisted of functions, dimension, manpower, capacity building through formal and on-the-job training, infrastructure through re-equipment and rehabilitation of offices, purchase of data processing equipment and establishment of computerized databases, and gradual decentralization through strengthening of regional offices, for administration of mining rights and inspectorate responsibilities, also including environmental monitoring. While the process of institutional reform was initiated late in the project implementation, its objectives were achieved through two extensions of the credit closing date. It involved updated definition of responsibilities, provision of resulting needs for capacity building, and supply of equipment needs. Nevertheless, significant improvements in sector administration had already taken place. Most notably, the backlog of over 2,000 license applications, which existed in 1994, had been cleared and revenue collection has increased almost tenfold. The preparation of procedural manuals had been delayed pending completion of the restructuring of MD, but has now been completed. The improvement of zonal offices was downsized, to avoid over-extending further the physical and human resources of MRD, and to allow dimensioning any further improvements on the basis of actual requirements related to the large-scale mines - 22 -  and activities related to small-scale and artisanal miners. The existing offices have been made functional, with equipment and capacity to carTy functions related to mineral rights, mines inspectorate, and provision of extension services. However, while extensive training of MD staff has been completed, MD has developed only a limited ability to critically analyze applications for mine development, assess mine operations, and make realistic projections of government income for the sector. Further reforn implementation is underway to complete: a) the modernization of policy and performance monitoring at MEM; b) the modem administration of mineral rights with a comprehensive cadastre being funded by NDF to handle large-scale, small-scale and artisanal miners; c) the establishment of an Environmental Mining Unit for the evaluation of ELAs and environmental management, including monitoring, compliance and enforcement in close coordination with the Ministry of Environment; d) the expansion, maintenance and updating of mineral informations systems and databases, including intemet interfaces. However, it is recognized that civil service conditions, under which MEM and its agencies operate, might become a source of staff turnover, affecting the continuity of services of staff trained under the project, and quality of staff to be recruited in the future. In this connection, initial steps have recently been taken to physically separate from MEM, and modularize to some extent the existing mining sector development project unit, and a team responsible for developing and analyzing sectoral information. This is a positive step, which reminds in a lower scale, the measures undertaken in Ghana during the 1980s, under relatively similar circumstances, to separate and modularize the responsibilities for mineral sector development under a Minerals Commission, which was specifically created for this purpose. Geological database: The geological database has been substantially strengthened by the publication of forty new geological maps. Regrettably only half of the planned output was timely due to quality difficulties with drafts received from consultants. These maps were produced by traditional techniques, which assured their publication, but which failed to train personnel in the latest technologies for map production by digital methods. (Funding has been obtained from the Nordic Development Fund (NDF) to introduce digital map production). While not directly funded by the project, the continuing programme of building a minerals database was supported by the provision of new equipment. Good progress has been made but much remains to be done, due to increasing amount of information, and growth of small scale mining. Minerals laboratory: Significant improvements were made to the Geological Survey laboratory under a twinning contract with a foreign geological survey. Modem equipment and supplies were procured and personnel received training. The laboratory is now in a position to carry out analyses of samples from the operating mines on a routine basis. The NDF funded geochemical survey programme is expected to make extensive use of these facilities. Artisanal and small-scale mining: The general thrust of the Government towards artisanal and small-scale mining is based around the encouragement of this activity in an environmentally acceptable manner as, if properly administered, it contributes directly to poverty alleviation and the economic improvement of the lives of over 500,000 people. It should be noted that women play a major role in this sub-sector as is witnessed by the existence of the Tanzanian Women Miners Association (TAWOMA). The small scale mining component of the project consisted of a number of sub-components including i) completion of an inventory of existing small scale mining areas; ii) technical assistance to small scale miners through the development of procedural manuals and regional demonstration centres; and iii) development of the gemstone mining industry through training and establishment of a pilot gemstone - 23 -  cutting/fabrication centre. An inventory of small-scale mining sites in Tanzania was completed by a local consulting group. The report is of very high quality and, in the opinion of both Govemment personnel and outside experts, is one of the best reports yet produced on small-scale mining anywhere in the world. It has provided a base for all further work related to the artisanal and small-scale sub-sector. Technical assistance to the artisanal and small-scale miners, with the objective of improving their productivity and lessening the environmental impact of their activities, has proceeded more slowly than was planned. Nevertheless a number of procedures manuals, available in Swahili, have been developed and published. While the issues of health and safety in small-scale mining were not explicitly addressed, the new manuals and the training programmes are expected to significantly improve the health and safety aspects. The project design envisaged the establishment of eight demonstration plants in various regions of the country for small-scale mining. However, only one of the proposed eight pilot-demonstration plants was undertaken and completed due higher than anticipated costs, adoption of a phased approach, and delays in procurement. Investment promotion: The promotion of investment opportunities in the mineral sector in Tanzania has been a key activity of the project. On the basis of the improved legal and regulatory framework, together with the enhanced and more accessible geological database, the Govenmment undertook to promote the unrecognized potential of the country as to demonstrate that Tanzania is a place to do business. The programme consisted of written promotional materials followed up with a series of roundtables and a strong presence at intemational mining seminars. Papers were prepared and presented at four intemational conferences during the term of the project. The promotion programme was extremely successful. Exploration expenditure in the country grew from essentially nil in the early nineties to a peak of US$96 million in 1997. This surge in exploration following sector reform has been followed by annual expenditures of about US$50 million in subsequent years. This new exploration has substantially increased the proven mineral reserves of the country. The establishment of over 42 million ounces of gold resources in the country is particularly significant and bodes well for the future. Gold production has increased more than twenty fold since the inception of the project and further new gold mines are expected to start production in the near future. Indirect benefits: The project is providing many indirect benefits for Tanzania. While these cannot be quantified in monetary terms they make an extremely important contribution to the economy. Contractors are increasingly employing Tanzanians in many mineral sector activities such as drilling services at the exploration stage to tyre servicing for the new mines. Local suppliers are increasingly supplying the industry with goods, both local and foreign, needed to support mineral exploration, mine development and mine operation. As planned, local consultants were utilised extensively and successfully throughout the project. The project has increased the skill level of many Tanzanians both by formal training and on-the-job experience thus ensuring that the economic benefits of the mineral sector are shared by many. Artisanal and small-scale miners have been exposed to modem equipment, which is more environmentally friendly. - 24 -  Both the exploration activities and the new mines have brought with them improved infrastructure not only for the benefit of the mine but also for associated communities. The Geita-Mwanza area, with three new gold mines operating is witnessing and taking opportunity of major improvements in employment opportunities, new infrastructure, and growing demands. A more recent example of this associated infrastructure improvement is well illustrated by the newly opened Kahama mine. The associated improvements include: Construction of a new 68 km road from the mine to the Kahama- Isaka road. Construction of a 47 km water pipeline from Lake Victoria to the mine, which is providing water to communities en route. Construction of an electricity transmission line, which is providing power to surrounding communities. Establishment of a new dispensary. Upgrading of the Kahama hospital. Construction of affordable housing in nearby villages. Active involvement by the company in campaigns to combat HIV/AIDS and malaria. Other indirect benefits have been improvements in services for the expatriate community both in Dar es Salaam and in Mwanza. This is important if the Tanzanian mining sector is to attract and retain highly skilled personnel - essential for a successful mining industry. Sustainability: The sustainability of this project is satisfactory in most aspects but there are some important risks for sustainability in others. Sustainability of project achievements must be addressed periodically, and with increasing emphasis as implementation comes to a close. Sustainability is better assured by early identification of the risks, assessment of the requirements to reduce them, and the early development of action plans. From the risk perspective, the long-term sustainability was recognized as a risk at project inception. the President's Memorandum identified three main risks: i) the confidence of investors might not be acquired during the project implementation and/or sustained after its completion; ii) the challenge of retaining qualified and trained manpower over time in MD and the Geological Survey; and iii) the difficulty of successful intervention in the small-scale and artisanal mining sub-sector. The first risks did not materialize as evidenced by the flow of private funds, both foreign and local, for exploration and mine development. The second risk has been realized as several skilled professionals have left the MD and the Geological Survey for employment in the private sector. This clearly impacts on the efficient administration of the reformed sector but, on the other hand, continues the process of improving the skills of local professionals. The third risk, concerning interventions in the small-scale and artisanal sub-sector has presented a challenge, but excellent progress is now being made, albeit late in the project time frame. However, two additional risks to sustainability have emerged: i) fuiiding constraints for sector administration; and ii) the need to build on some of the project tasks without IDA funding. Funding for the requirements of MD was a significant problem early in the project, but has largely been overcome as provision has been made for retention in MD of some of the funds being collected from the sector. Whether or not funding will continue to be available in the required amounts is uncertain. The sustainability of the new policy and achievements of the project need to be enhanced through continuing activities in manner programmed to take stock of achievements, provide further in-depth follow-up on priority issues, and address evolving constraints. Five main tasks lie ahead: a) capacity building at MD, as there remains a lack of adequate skills and experience to ensure effective administration of the rapidly expanding mineral sector; b) further intervention to build up on the component for small-scale and artisanal sub-sector, - 25 -  extending to its many social dimensions. c) completion of institutional restructuring at MEM; d) establishment of satisfactory regional monitoring capabilities; and e) civil works to rehabilitate main regional offices. From the perspective of requirements and recommendations: a) the Govemment should commence a targeted and professionally managed information program as soon as possible, which disseminate information about the benefits from mining to the country, making public that Tanzania is receiving its fair share of financial and economic benefits from the mineral sector. This is highly important because the prime requirements for the sustainability of project achievements are the consistent application of the new mining policy by MD, with the support of political and stakeholder commitment. Political support for the reforms that have taken place is currently strong but there are some indications of wavering support as some parties feel that Tanzania is not receiving a fair share of the benefits on mineral development; b) a continuing program of investment promotion should be instituted to make potential investors fully aware of the potential of Tanzania. In turn, this will require a continual augmentation of the geological database to further define exploration targets for promotion; c) the MD should continue to strengthen its capability to administer the new regulatory framework for the mineral sector, as a vital measure to increase the potential for sustainability Administration includes not only the capacity to carry out monitoring of exploration and mining for compliance with license/lease requirements, but also to be able to monitor health, safety, environmental and social aspects. It further requires that MD be able to provide financial and economic projections regarding the sector to involved parties in the Government. It is important that MD obtain continuing assistance to further strengthen these capabilities; d) a great deal remains to be done in the small-scale mining sub-sector, despite the good progress made to improve its conditions and performance. The Government should reassess all aspects of the needs of this sub-sector and prepare a comprehensive program to development/regularization program based on the identified priorities, and information developed in respect of pilot testing, administration during mine rushes, and provision of extension services. The baseline survey completed under the project identified a number of social issues, which were not addressed under the project; and e) further ways should be found to augment the financial and economic benefits flowing directly to Tanzanians, which can derive from the mineral sector. In this respect, consideration should be given to promote value-added activities such as gem- cutting, carving and jewelry manufacture. (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information - 26 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: In- I lIndlcatorlMatix ' '. I -.P Increased private investment in mining Not applicable Achieved Modemized legal and regulatory framework Implemented Improved administration and use of Effective frameworks in operaton regularoty framework by state mining institutions and agencies Incorporated to new mineral law Formalized environment regulatory framework for mining Under implementation Improved environment permitting, management and control by MEM Output Indicators: -indicatorMatix D- , rojeci, ActiiaULatestEsirnate'. V Institutional Strengthening Design of improved setup for management of Not applicable Completed mineral rights and environmental permits Formalization of regulations and decrees to Completed establish required framework Elimination of corporate functions of the State Completed Minng Corporation Reorganization of Minerals Division and Completed Geological Survey Technical Components Conducting small-scale mining baseline Completed studies in Tanzania Formulation of environmental management Completed master plan Completed Publicaton of geological maps Completed Establishing a computerized mineral cadastre management systm for large scale mines End of project - 27 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million A. Legal, Regulatory Fiscal and Environmental Framework Consultant & Training 0.98 0.88 90.53 Equipment & Document Production 0.15 0.06 44 B. Institutional Strengthening Consultant & Training 2.84 3.06 107.92 Equipment, Tools & map printing 2.52 2.09 82.97 Incremental operating costs 0.66 1.37 208.78 Civil works 0.42 1.05 360 C. Small Scale Mining Consultant & Training 1.01 1.74 167.69 Equipment & Materials 1.90 1.74 85.4 D. Project Management and Administration Consultant 0.60 0.06 108.3 Equipment & office accomodation, Operating & staff 0.62 0.49 109.4 cost Total Baseline Cost 11.70 12.54 Physical Contingencies 2.20 Total Project Costs 13.90 12.54 Total Financing Required 13.90 12.54 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB N.B.F. Total Cost NCB ~Other 1. Works 0.00 0.72 0.52 0.00 1.24 (0.00) (0.51) (0.50) (0.00) (1.01) 2. Goods 3.78 0.00 0.00 3.78 (3.70) (0.00) Q (0.00) (3.70) 3. Services 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Consulting, Training 0.27 0.00 5.99 0.00 6.26 and Education Material (0.24) (0.00) (5.69) (0.00) (5.93) 5. Operating Cost 0.00 0.00 2.37 2.37 (0.00) (0.00) (1.61) (0.00) (1.61) 6. Refunding of PPF 0.00 0.00 0.25 0.00 0.25 (0.00) (0.00) (0.25) (0.00) (0.25) Total 4.05 0.72 9.13 0.00 13.90 l ________________________ ~ (3.94) (0.51) (8.05) 1 (0.00) (12.50) - 28 -  Project Costs by Procureme nt Arrangements (Actual/Latest Estimate) (US$ million equival nt) Procurement Method Expenditure Category ICBCB B Other2 N.B.F. Total Cost 1. Works 0.00 0.83 0.00 0.00 0.83 (0.00) (0.11) (0.00) (0.00) (0.1 1) 2. Goods 0.68 0.00 2.19 0.00 2.87 (0.68) (0.00) (2.19) (0.00) (2.87) 3. Services 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Consulting, Training 1.61 1.47 3.90 0.00 6.98 and Education Material (1.61) (1.25) (3.90) (0.00) (6.76) 5. Operating Cost 0.00 0.00 1.86 0.00 1.86 (0.00) (0.00) (1.86) (0.00) (1.86) 6. Refunding of PPF 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 2.29 2.30 7.95 0.00 12.54 (2.29) (1.36) (7.95) (0.00) (11.60) " Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies. 2' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Sub-Component (in USS million equivalent) ,, : ,L < , fij ;; i,;,^ | t , , - *J! ;; : |Percentage of Appraisal Sub-Component Appraisial Estimate, Actual/Latest Estfma6 , Bank '_ Gov CoF. Bank; L . GovtL'. j ,CoF.| Bank Govt| CoF. Civil Works 0.42 0.21 0.11 0.21 26.2 100.0 Equipment & Materials 3.81 0.08 2.85 0.73 74.8 912.5 Consultancy & Training 4.92 0.32 6.76 0.00 137.4 0.0 Incremental Operating 1.14 0.76 1.86 0.00 163.2 0.0 Costs - 29 -  Annex 3. Economic Costs and Benefits Not applicable - 30 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective ldentification/Preparation June6/1993 2 Operations Off./Mining Spec. Appraisal/Negotiation Jan/1994 2 Operations Off. Mining Spec. April/1994 I Operations Off./Mining Spec. Supervision Oct./S1994 I I Mining Specialist S S Feb/95 I I Mining Specialist S S Sept/95 2 1 Mining Specialist, I S S Operations Officer Jan/96 I I Mining Specialist S S July/96 1 I Mining Specialist S S Nov./96 I I Mining Specialist S S Feb/97 2 1 Mining Specialist, I S S Operations Officer Nov/97 2 1 Mining Specialist, I S S Operations Officer Feb/98 2 1 Mining Specialist, I S S Operations Officer March/98 I I Mining Specialist S S June/99 I I Mining Specialist S S Aug/00 I I Mining Specialist S S Dec/00 I I Mining Specialist S S Feb/OI I I Mining Specialist S S June/01 1 I Mining Specialist S S Nov/01 I I Mining Specialist S S ICR Feb/2002 1 Mining Specialist S S (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 49.1 167.8 Appraisal/Negotiation 24.6 85.0 Supervision 151.4 559.9 ICR 8.0 40.0 Total 233.1 852.7 - 31 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating L Macro policies 0 H * SU O M O N 0 NA LI Sector Policies * H OSUOM O N 0 NA L Physical 0 H *SUOM 0 N O NA L Financial O H * SU 0 M 0 N O NA L Institutional Development 0 H * SU 0 M 0 N 0 NA L Environmental OH * SUOM O N O NA Social L Poverty Reduction O H *SUOM 0 N O NA L Gender O H * SU 0 M 0 N 0 NA L Other (Please specify) 0 H OSUOM O N * NA L Private sector development * H O SU 0 M 0 N 0 NA Li Public sector management 0 H * SU 0 M 0 N 0 NA L Other (Please specify) O H O SU O M O N 0 NA - 32 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating El Lending OHS Os OU OHU O Supervision OHS OS O U O HU O Overall OHS OS OU O HU 6.2 Borrower performance Rating El Preparation OHS OS O U O HU El Government implementation performance O HS OS 0 U 0 HU O Implementation agency performance O HS OS O U O HU L Overall OHS OS O U O HU - 33 -  Annex 7. List of Supporting Documents 1. Memorandum of the President for the Tanzanian Mining Sector Development TA Project, dated June 14, 1994 (Report No. P-62760); 2. Credit Agreement for the Tanzanian Mining Sector Development TA Project, signed September 23, 1994 (Credit 2648-TA); 3. Aide Memoires, Back-to-Office Reports, and PSRs; 4. Project Quarterly Progress Reports from April, 1995 to April 2002; 5. Project Annual Reports from 1995-2002 6. Project Annual Audit Reports from 1995-2002 7. Various Reports on Workshops, Seminar and Roundtable discussions; 8. Consultants Study Reports under the project, available as open files and tabulated below, as per project component and subcomponent. - 34 -  *. MA~ Bu I.N A L 3MI TANZANIA _/ 1 / Bukoba'. _JI ,c;/MINERAL SECTOR DEVELOPMENT 41. :2*- TECHNICAL ASSISTANCE PROJECT RWANDA | .y __ tToah ENYA ~~~~~~~~PRODUCING MINE OR PLANT: 1 Williamson Diamonds 2 N X., C s\ 0 <KENYA 2 C2oastal Salt BURUNDI J I-+ t L , ,, ., o Le .1rs Arusha / thl t / 3 Nyanza Salt I +; < ^ - Saratut iX ~ _ S_t / 4 Pugo Kaolm TO 5 Kiwira Coal ujmbr Mpuku r_yoo2 |G A;s nl p ebv 1 1 C o d / C ~~~~~~+ OTHER PROJECTS- ng aS( R -, l1 Kahama Gold Tabo ngundories, col, lake Natron Soda Ash PL-mba ~~~3 Kagera Nickel (BHP) Island 4 Tanex (De Beers) ThAreas Prospective in Gold Barge Movement Main Roads ar ________kaSecondary Roads Railroads Nib" ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Rivers ZAMBIA akam a o ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 Selected Towvns or oceptnce f suh _A, IN IA OCEAN ~~~