DAR ES SALAAM, TANZANIA - The growth rate of  mining and quarrying recorded a drastic drop to 5.8 % in the second quarter of 2011 compared to a growth rate of 20.5 % in the second quarter of 2010.
The National Bureau of Statistics (NBS), in its latest report, attributes the drop in growth rate to 'slight increase in gold, diamond and Tanzanite production for the second quarter of the year 2011.'
 This comes at a time the Tanzania Government is changing the taxation rules to ensure the country earns more from its mineral resources.
The tax holidays which were given to early mining companies will no longer apply to new mining operations. While mining companies paid only 3 % in of net income withholding taxes, new ones will pay 4 % of gross income for the country to earn from windfall earning of mineral exports.
Tanzania has attracted billions worth of foreign investments in mining of minerals such as gold, oil exploration, natural gas, and is looking to mine for uranium, iron and coal, platinum, and several other types of semi- and precious gemstones as well as bulk minerals.
The NBS has also reported that manufacturing activities recorded a growth rate of 6.2 % in the second quarter of 2011 compared to 7.5 % in 2010 due to low power supply.