By: Samantha Cole
How much lower will Barrick Gold and Acacia Mining stoop down to try manipulate their way to extra profits? And right in the face of the President of Tanzania?
Firstly, a few words of background from the Mining Technology specialist website:
Buzwagi Gold Mine is located near the district of Kahama in the Shinyanga region of Tanzania. For our overseas readers, please click on the link below to see the location of the mine:
The Buzagwi mine is 100% owned and operated by Pangea Minerals which is 100% owned by Acacia Mining which, in turn, is owned 63.9% by Barrick Gold.
Some years ago, it was the single largest open-pit mining operation in Tanzania.
In 2011-2012, there were over 2,000 people employed at the mine.
Barrick Gold purchased the Buzwagi mine in 2000. The feasibility studies of the mine were completed in 2006. The development of the mine began in 2007 and was completed in 2009. The mine commenced operations in May 2009 and was expected to be shut-down in 2022.
The Information Centre for the Extractives Sector (ICES) in Kenya reports about problems in the mining industry and promotes knowledge, transparency and evidence.
The ICES reported today that Acacia Mining published their (new) assessment that Acacia expect a 40 percent boost from a mine-life extension of Buzwagi gold mine in 2017. The Acacia assessment is based on a record output last year and proposed more than doubling its dividend, reflecting a jump in net cash.
Following this public announcement, Acacia Mining stock exchange shares rose more than 6.5 percent by 08:20am GMT, whilst the wider sector was flat.
Acacia Mining’s CEO, Brad Gordon was quoted as saying: “2016 was another successful year for Acacia as we delivered record production, reduced our all-in sustaining costs by 14 percent and more than doubled our net cash position.” For the coming year, a six-month extension of mining at Buzwagi will lead to a 40 percent output increase versus 2016, the company said in a statement. Analysts said the company’s results easily beat expectations.
Herein lies yet more deception, double standards and falsehoods from Barrick Gold and Acacia Mining, and what is the root of this evil?
Actually, analysts say the answer is very simple. The answer is “Endeavour Mining”.
In fact, analysts are saying that Barrick Gold and Acacia Mining are “dressing up the bride” to make her more attractive for Endeavour Mining to come to the table for a merger. It is no secret that for over 8 months Barrick Gold have been trying so hard to sell off its daughter company, Acacia Mining, but there have been no takers. No other company in the world has been in the least interested in Acacia Mining – not because of the production but because of the terrible problems and scandals that surround Acacia in Tanzania. Now comes along Endeavour Mining and in mid-January, they make a public statement that they are in discussions with Acacia Mining to merge the company.
Analysts reported in the media that if the merger happens (God forbid for Tanzania) then Endeavour will take control. Mother Barrick Gold knows this only too well as well. So, what do they do this week? They make this announcement of the 40 percent boost in production – they know perfectly well that the announcement will drive their shares up – and this will put them into a stronger position to have a bigger piece of the “merger cake” when/if Endeavour take over the control of Acacia.
So, the question is “where is the deception and double standards”?
It was only a few months ago that the Buzwagi Mines’s Sustainability Manager, Mr. George Mkanza, told journalists that there was no hope for Buzwagi to do better after the year (2016), unless the new technology is used. He added that production declined and the company incurred a big loss and that they lost Sh40 billion during the first half of 2016.
The Planning Manager, Ms. Zonnastraal Mumbi, complained that Buzwagi only has the potential to produce under 900,000 ounces of gold and other sad woes.
The Business Improvement and Mining Manager, Mr Rodney Burgess concluded by saying that Acacia would close the mine in December 2017.
We asked a stock broker at the Dar es Salaam Stock Exchange how he and his colleagues viewed this whole yo-yo up and down situation.
The answer he gave is that everyone can see how obvious it is that Acacia threatened to close Buzagwi mine in retaliation against the President who, just weeks before, publicly told Acacia Mining to go back home if they do not make profits (but declare hundreds of millions of Dollars in dividends overseas).
In addition, analysts are saying that the timing of Acacia’s announcement to close Buzwagi mine end of 2017 was planned to scare the President and also the Appeal Board who was exactly at that time dealing with Barrick Gold and Acacia Mining’s appeal against the Tax Evasion guilty verdict handed down about six months earlier.
In fact, even the Bizwagi mine managers made sure that the journalists reported that more than 1,300 people will lose jobs and Kahama District Council will miss out on Sh1.7 billion that it has been getting every year as a service levy.
So we have the “Mining Bad Boy” of Tanzania using the closure of the Buzwagi mine as a threat against the President and to try scare him into taking a lower profile position against Acacia Mining and then suddenly, hocus pocus, only a matter of a few months later, Endeavour Mining pops up onto the Tanzania mining scene and the “Mining Bad Boy” of Tanzania does a 180 degree turn and try to deceive the public and Endeavour Mining with the announcement that Acacia expect a 40 percent boost from a mine-life extension of Buzwagi gold mine in 2017.
Barrick Gold and Acacia Mining were so sure that our President Magufuli would be afraid of their threats and crumble at the knees – just like in the old Colonization days.
But NO, President Magufuli came back even stronger and harder on Acacia Mining.
If Endeavour Mining are planning to come into Tanzania on the back of Acacia Mining, just look at the terrible public track records of their CEO, Sébastien de Montessus and their back stage financier, the Egyptian billionaire, Naguib Sawiris.
A few examples of the scandals of these two include alleged fraud of billions of dollars (no-one really knows how much) and even recently the US Government instructed the FBI to start a full investigation. Besides this mega-fraud, is a history cancer death, reports of corruption and implicating political figures through alleged bribes, violations of rules at nuclear fuel fabrication plants, disregard of environmental regulations, poisoned air, contaminated soil and polluted water, polluting underground aquifers, aggravating a chronic water shortage, and exposing its employees to uranium contamination, public accusations of funding rebels.
Do we need such businessmen in Tanzania?
For more detailed information to see the real bowl of poisoned spaghetti that stands behind Endeavour Mining, please read our January blog about the possible merger between Acacia Mining and Endeavour Mining.
President Magufuli – Your nation stands behind you and trusts your judgment and courage to oppose these international business rogues and their manipulations, deceptions, frauds and corruptions.
God bless you, Sir and God bless all of Tanzania