Tanzania President to Mining Companies: The Robbery must stop!

By Samantha Cole of Tanzania Business Ethics

President Dr. John P Magufuli openly stated in a news conference at State House in Dar es Salaam, that mining companies must make greater contributions to Tanzania.

Tanzania has a lot of minerals, but there have been a lot of funny deals ….. we have to look carefully at our laws so that we move forward as a country,” said the President.

Tanzania is the fourth-largest gold producer in Africa and also has vast deposits of natural gas, diamonds, uranium, coal and precious and semi-precious gemstones.
This message is not news to mining companies in Tanzania, such as Acacia Mining, who are the largest gold miners in the country. In fact, President Magufuli is consistent in his drive and efforts to wipe out corruption, fraud, tax evasion and mismanagement in Tanzania.

Dr. Magufuli added that his government had recently introduced new mining laws that specifically focus at ensuring all the financial benefits within the mining sector are shared evenly, fairly and according to the law between the multinational mining companies and the country.

Furthermore, the President focused on the lack of transparency and disclosure of the mining companies. He said that some of the gold mines even have private airstrips and he was forthright about the lack of possibility for the authorities to monitor what the mining companies planes are transporting from the gold mines, out of Tanzania and, he said openly, that the robbery in our country must stop.

Dr. Magufuli also addressed the issue of the export of mineral sand from Tanzania and his demand for the need of building gold smelting works within the country. This is also consistent with the President’s speech in August this year in which he imposed a ban on the export of mineral sands due to irregularities of the mining companies.

Earlier this year in May, sources within Acacia Mining leaked reports to the media and to the Tanzania authorities, that allegedly indicated how Acacia Mining were involved in fraudulent gold exports and price transferring. These reports address elements such as the correlation of Acacia Mining’s export royalty taxes to the total weight of gold exported which leads to the losses of taxes incurred by the State.

In addition, the leaked documents address Acacia’s assaying process, an essential component in determining the quantity of gold in a mineral deposit. Details are given in the documents regarding the manner of purifying and the % of gold purity declared at the time of export, including differing of values and percentages of copper and gold in the mining sand.  All this leads to paying less export royalties and further losses of taxes to Tanzania.

With all of the above reports in the hands of the authorities, coupled with the guilty verdict in March 2016 of Barrick Gold – Acacia Mining for tax evasion, and their alleged corruption scandal involving one or more officials in the Ministry of Energy and Minerals in the case of Bismark Hotel (Mining) Ltd, it is no wonder there is such attention and focus by the authorities on Acacia Mining and in turn, on all the mining sector.

Barrick Gold of Canada, majority owners of Acacia Mining, have desperately been trying to sell their 63.9% holdings in Acacia, but there are no buyers. Analysts overseas are saying that despite Acacia’s good performance, there are too many problems, legal cases and complications with the authorities, surrounding Acacia in Tanzania.

To make matters worse for Barrick’s prospective buyers, last year on 17 November, there were media reports about Barrick – Acacia terminating their alliance with Bismark Hotel Mining on other joint venture mining lands in Siga Hills, also known as Golden Ridge. The report described a letter sent to Bismark to hand over the Siga Hills permits back to Bismark for free.  The local artisanal miners on these same lands are reporting major conflicts between Barrick-Acacia and Bismark regarding Siga Hills. If reports being received are true, there is allegedly a new law suit brewing from Bismark against Acacia Mining that will involve hundreds of millions of US Dollars. Certainly not the news that any company wants to hear – whether the company owners or the prospective buyers!

President Dr. J.P. Magufuli, Tanzania
Prime Minister J. Trudeau, Canada
Prime Minister T. May, England
Tanzania Government Officials
Canadian Government Officials
British Government Officials
Uganda Government Officials
Kenya Government Officials
Media contacts and journalists worldwide