Tanzania rues its advice against local smelters

Monday May 29 2017

A mine. A presidential committee said unnamed TMAA officials were compromised six years ago to weaken the business case for Tanzania building local smelters for its mineral sands. PHOTO | FILE

Heads could roll at the Tanzania Minerals Audit Agency (TMAA) after President John Magufuli ordered an investigation of its officials and those at the Mining Ministry over suspected fraud.

A report by the Presidential Probe Committee that assessed 277 containers from Acacia Mining, a subsidiary of Barrick Gold, detained at the Dar es Salaam port last week showed that the concentrates contained 1,400 grammes of minerals per tonne, seven times the value declared on the export documents.

The committee chaired by Abdulkadir Mruma said unnamed TMAA officials were compromised six years ago to weaken the business case for Tanzania building local smelters for its mineral sands. 

The Presidential Mining Review Commission led by Judge Mark Bomani had in 2009 justified the putting up of a local smelter. TMAA had recommended against building a mineral smelter.  

READ: Dar rules out copper smelter

President Magufuli sacked Minister for Energy and Minerals Prof Sospeter Muhongo and suspended the chief executive of TMAA, Dominick Rwekaza, then ordered that the agency be investigated for causing the country millions of dollars in losses.


READ: Magufuli sacks mining minister

TMAA officials visited the Tokyo and Saganoseki copper concentrate smelters in Japan in 2011 to familiarise themselves with the technology involved in processing copper concentrate and how it could be applied in Tanzania. The tour was also aimed at understanding the investment cost involved in the construction of such smelters, their capacities and major operating expenses according to a TMAA report.

Now, the TMAA officials who went to Japan are being accused of having been compromised to come up with the report. The Bomani Commission, which drew up Tanzania’s mining policy, had also toured Japan when it was collecting and preparing data for the enactment of a new mining law.

In the 2011 report by TMAA titled “A Study on Viability to Constructing a Copper Concentrate Smelter in Tanzania,” the agency advised against investing in the smelting and refining industries.

In March, President Magufuli ordered the impounding of 277 containers of mineral concentrates, pending verification of minerals they contained.

The committee reported the presence of minerals such as silver ratios, while no royalty was paid for other compounds like iron, sulphur, rhodium, iridium and lithium despite their being extracted from the concentrate by the final buyer.

Stay on the ban

The presidential committee said Acacia had not fully declared minerals contained in the concentrate, and recommended that the ban on export of metallic mineral concentrates be maintained until the issue was resolved.

The company at the centre of the controversy has reacted saying that it is clean and abides by all laid down laws.

“Acacia reiterates that it fully declares everything of commercial value that it produces and pays all appropriate royalties and taxes on all of the payable minerals that we produce,” the company said.

In a statement, the chief executive officer of Acacia, Brad Gordon, said that the company was yet to receive the report but vouched for the integrity of the firm.

“We are confident in the accuracy of our declarations, which are checked and verified by SGS, one of the world’s largest testing companies.

“The concentrate we produce has some small variances, and each container has different declared quantities of concentrate.”