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Mineral theft costs Tanzania $2.7m yearly

Saturday January 09 2016
mining

Tanzanite miner at the Mererani mine in northern Tanzania. Globally, tanzanite trade is worth $500 million a year, with Tanzania, the world’s sole source of tanzanite, recording export revenues of $20.75 million, which is equivalent to 4 per cent of the trade value. PHOTO | FILE

The rampant smuggling of minerals from Tanzania is costing the country $2.7 million in lost revenue every year.

Official data released last week indicates that between July 2012 and December 2015, Tanzanian authorities foiled 87 smuggling attempts of minerals, through its airports and porous borders, intercepting about 2,870kg of metals and saving the state $9.4 million.

The Energy and Minerals Ministry said that the latest incident occurred on December 15, 2015, when raw tanzanite worth $1.2 million was seized at the Kilimanjaro International Airport en route to India. Deputy Minister Dr Medard Kalamani said that the culprits were punished as per the law.

Section 6 (4) of the Mining Act 2010 stipulates that an individual mineral smuggler is liable to a fine of Tsh10 million ($5,000) or a three-year jail term, whereas a company will pay Tsh50 million ($25,000).

Tanzania, the world’s sole source of tanzanite, banned exports of the rough stone weighing above one gramme in 2010, in a bid to promote the local processing industry. The ban was part of the Mining Act of 2010, which intends to create jobs for Tanzanians and add value to the tanzanite. 

But statistics show that the lion’s share of rough tanzanite still finds its way to India, where it creates a multimillion-dollar market and thousands of jobs, according to Tanzania Mineral Dealers Association chairman, Sammy Mollel.

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Data from the Tanzania Minerals Audit Agency show that between 2010 and 2013, the country exported 21,000kg of rough tanzanite, or 99.4 per cent of the total, worth $54 million. This compares with 115kg of cut tanzanite — representing 0.54 per cent — valued at $29 million. 

This implies that 0.5 per cent of tanzanite output is processed locally, creating a paltry 119 jobs. 

Globally, tanzanite trade is worth $500 million a year, with Tanzania recording export revenues of $20.75 million, which is equivalent to 4 per cent of the trade value.

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