Tanzania seeks to boost mining revenue as audit of trade starts

Tuesday April 18 2017

Gold mining at Buzwagi in the Shinyanga region of Tanzania. The country is introducing reforms in the mining sector to make the most of its natural resources. PHOTO | FILE

Tanzania is introducing reforms in the mining sector to make the most of its natural resources following the setting up of another committee to look into the legal and commercial framework of exporting concentrates from the country.

President John Magufuli recently appointed the committee composed of lawyers and economists, to audit the mineral concentrates trade since 1998.

“Make a follow-up on the number of containers that have been shipped from our country starting from 1998, and find out if these containers had gold, silver or copper and establish how many tonnes were exported every month,” the president told the team as he swore them in on April 11.

The committee will also be seeking to establish if the government earned its fair share of revenue.

President Magufuli also wants them to establish the net worth of exports and how much the country has been paid so far and whether the payment was correct.


The committee is expected to work closely with and complement the work of another formed last month, comprising geologists, to assess the recoverable value of minerals in the concentrates and whether they would support local processing of the minerals.

President Magufuli said it was now time for the country to extract maximum returns from its resources, adding that the government will not allow a situation where its resources are exported without its citizens benefiting.

Efforts to talk to the Chief Secretary in the Office of the President John Kijazi over the terms of reference given to the two committees were fruitless, but State House director of communications Gerson Msigwa told The EastAfrican that the first committee was taking a more scientific approach in determining the composition of the concentrates while the second was looking at the legal and economic implications.

“Professor Abdulkarim Mruma will chair the first committee to see if it is scientifically viable to set up a smelter locally and if the country has the financial capacity to set it up; at the end of their investigation, they must come up with a scientific analysis,” said Mr Msigwa.

He said the second team is looking at the economic and legal implications involved in exporting the concentrates.

“The president has instructed them to see if our laws are being adhered to or if there are any violations. The economists in the committee will calculate what has been earned or should have been earned from exporting the minerals. The two committees will then present their findings to the president only,” he added.

Deo Mwanyika, Acacia Mining vice president for corporate affairs, told The EastAfrican that the company welcomed the formation of the committees.
“We fully support the president’s initiative to form the committees because this will in the long run be helpful to the country and the company,” said Mr Mwanyika.

The company is currently losing money after the government imposed a ban on copper and gold concentrate exports in a bid to develop the local smelting industry.

The Ministry of Energy and Minerals invited firms to invest in value addition of minerals.

“The government is inviting capable stakeholders to invest in the mineral processing, smelting and refining industries in Tanzania,” the statement from the ministry said.

Interested firms are required to have the technology needed to ensure that pure metals are produced and exported to destinations outside the country’s borders.

The companies are also expected to have experience in processing, smelting and refining of metallic ores and concentrates.
However, analysts said it would take at least five years to build a smelter and the Tanzania Minerals Audit Agency estimates it would cost about $500 million.

Acacia Mining was forced to issue a statement at the end of last month over what it termed as “a great deal of misinformation and inaccurate speculation that appeared in sections of the media, on the gold and copper concentrates exports.”

Some media reports had suggested that the company tried to export gold and copper concentrates even after the ban was put in place.

However, according to Acacia, the 256 containers at ZamCargo in Dar es Salaam and 21 at the port of Dar es Salaam had already been transported from Bulyanhulu and Buzwagi. The latter had been cleared by Customs and was waiting to be shipped.

“The Tanzania Revenue Authority and the Ministry of Energy and Minerals are both involved in the process of exporting our concentrates,” Acacia said in a statement.

The firm added that since 2001 when it started exporting concentrates from Buzwagi and from Bulyanhulu in 2010, all associated gold, copper and silver revenue was declared.