Dar to trace cash lost in smuggling of minerals

Saturday July 6 2013

Tanzanite miner at the Mererani mine in northern Tanzania. The mineral audit agency said between 60 and 75 per cent of all tanzanite production is undocumented. Photo/FILE

Tanzanite miner at the Mererani mine in northern Tanzania. The mineral audit agency said between 60 and 75 per cent of all tanzanite production is undocumented. Photo/FILE AFP

By ADAM IHUCHA Special Correspondent

Tanzania has launched an investigation to trace millions of dollars lost through smuggling of minerals out of the country.

The move is the latest in a string of attempts by the government to track down a group of international smugglers who have been exporting minerals to overseas markets in China, Italy, Vietnam and Europe.

Senior government officials said that more than Tsh13 billion ($8 million) in cash and commodities has so far been confiscated from mineral smugglers after state security agencies intercepted them.

Government statistics released last week show that the country loses Tsh2.2 billion ($1.36 million) every month on illegal export of minerals.

Minister for Energy and Minerals Sospeter Muhongo said the key points of smuggling have been identified as the Julius Nyerere International Airport (JNIA) in Dar es Salaam, Kilimanjaro International Airport (KIA) in Kilimanjaro and Mwanza airport. He said the government is investigating several people behind the syndicate who have been working with “rogue” airport officials.

The mining sector contributes at least 4.6 per cent to the Tanzanian economy.

Eliakim Maswi, Permanent Secretary in the Ministry of Energy and Minerals, said the Tanzania Revenue Authority (TRA) was working with police and the Tanzania Mineral Audit Agency (TMAA) to dismantle the syndicate and bring the crooks to book.

“Once smuggled out, the thieves either sell the minerals in the blackmarket overseas or attempt to integrate it into the legitimate commodity trade,” said Mr Maswi. “Smuggled minerals are becoming hard to trace.”

In February this year, authorities confiscated a consignment of tantalite worth $10 million belonging to a Rwandan company, exposing a web of theft and corruption involving officials of key agencies and departments in Tanzania’s government working in cahoots with cross-border criminals.

The investigations showed that officers from Tanzania Intelligence and Security Services (TISS), TRA, TMAA and the Tanzania Ports Authority (TPA) were involved in the theft from the port of Dar es Salaam.

The government has also arrested some Chinese nationals who were smuggling minerals from the Lake Zone mining area to the port of Dar es Salaam using land transport.

The Mining Act of 2010 stipulates that an individual mineral smuggler is liable for a fine of Tsh10 million ($6,250) or three years in jail, whereas a company must pay a Tsh50 million ($31,250) penalty.

Weak penalties

“Such penalties are no deterrent to people who make hundreds of thousands of dollars through smuggling activities,” said Charles Ole Ngereza, a mining industry analyst.

At a seminar on procedures for export and import of minerals in Dar es Salaam held last month, the chief executive officer of TMAA Paul Masanja, said that between 60 and 75 per cent of all tanzanite production for example, is undocumented as miners produce about four kilogrammes of the rare mineral daily, but only one kilogramme goes to government records.

Mr Masanja said the government has been auditing the quality and quantity of minerals produced and exported from the major mines since last year.

He said that the government will aggressively continue to monitor and audit large, medium and small scale mines operating in the country in order to ensure that they make the required payments to the government, and conduct their operations in an environmentally sound manner.

The seven major gold mines paid a total of $71.1 million as royalties in 2012, representing an increase of 9.9 per cent on the $64.69 million realised in 2011.