Dar gold refinery to be wound up

Saturday February 9 2013

By MIKE MANDE The EastAfrican

The troubled gold refinery firm Mwananchi Gold Company Ltd (MGCL) is being liquidated over financial problems, ending a 12-year dispute over the ownership of the company.

The company, which filed for bankruptcy last week has appointed a liquidator, Mlingi Elisha Mkucha.

MGCL board chair Joseph Sinde Warioba said shareholders met on January 16 and resolved to wind it up.

The shareholders include BoT (36 per cent), National Development Company (15 per cent), Chimera Company Ltd (20 per cent) shares and Mwananchi Trust (29 per cent).

The company entered into business in Dar es Salaam December 2005 as the country’s first gold refinery and planned to purchase gold from small-scale and artisanal miners and to add value to Tanzania’s gold exports.

Document seen by The EastAfrican show that in 2006, BoT extended a secured loan amounting to $6.6 million to MGCL against its industrial property located at Vingunguti Industrial Area.

BoT extended another loan amounting to Tsh4.9 million ($3,090) followed by two secured loans of Tsh10.5 million ($6,557) each.

MGCL ceased operations in 2007 due to poor performance. Since then, efforts to revamp the company have failed.

The central bank said that on 18th January 2012, MGCL board resolved to dispose its landed property to raise funds, which would be used to liquidate obligations due to its creditors.

Governor Prof Benno Ndulu said that MGCL is due to be placed under voluntary liquidation, which will see the bank realise its equity and formally complete the withdrawal of its stake in the company.

“It is expected that the liquidation will be completed before end of the financial year, 2012/2013,” he said.