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Following advice from the World Bank, and hoping for economic growth and independence from donors, a number of African countries have opened up opportunities for large-scale mining by foreign investors over the last decade and a half. Tanzania, one of the ‘new’ mining countries, is now among the largest gold producers in Africa, but investor-friendly contracts have resulted in extremely low government revenues from mining, totalling less than 5 percent of what the country receives in development aid. In response to widespread discontent, and acknowledging the plight of affected communities, the government amended the 1998 Mining Act in 2010. However, improved legal provisions may have limited effect if the present governance challenges are not resolved. The article demonstrates that the legal provisions meant to protect the rights of affected people are not followed, and that poorly functioning local democracy is particularly dangerous for pastoralists who are ‘represented’ by local authorities often dominated by non-pastoralist immigrants. Compensation to smallholder farmers is either non-existent or too low – or the compensation money is embezzled by the authorities entrusted to distribute it.