MAC: Mines and Communities

Tanzania: when the going gets tough…….

Published by MAC on 2008-12-09

The world's biggest corporate gold miner, Barrick Gold, says it might halt its operations in Tanzania, as the east African government begins seriously responding to citizens' claims that mining companies have been exploiting the country's wealth.

Barrick's "threat" was issued shortly after moves were made towards enlisting Tanzania in the Extractive Industries Transparency Inititiative (EITI).

The company claims that it 's made "little profit" from its operations in Tanzania to date - an assertion which thorough implementation of the EITI might undermine.

Barrick considering pulling out

By Correspondent Njonanje Samwel

5th December 2008

The giant mining firm Barrick Gold Tanzania has said it is considering halting its operations in the country. Barrick Vice President, Africa Region, Gareth Taylor told this paper in an interview yesterday, shortly after he attended a workshop to launch the Extractive Industries Transparency Initiative (EITI) held in Dar es Salaam, a global mining 'watchdog'.

During the interview with selected media, Taylor said the mining firm had for several years recorded declining profits. He did not give figures, only stating: "We are now thinking about our future operations in the country.

This is due to the fact that the company has for several years not recorded profits. As a business company, this is a critical position where we are required to think about our future," he said.

He said the widely exaggerated criticism that the mining firm was enriching itself through exploiting the mineral wealth of the country at the expense of its poor people was not true as the company paid all levies and taxes and that it operated in an open and transparent manner.

"All criticisms being levelled at us are not true. They are just unfounded claims which intend to tarnish the good image of our company.

We are operating under rules and regulations stipulated in the mining laws and not otherwise," said Taylor.

Taylor said, the Canadian-based firm had always had to bear huge operating costs which were mostly due to the poor state of country's infrastructures thus making it record little profit.

"You cannot operate under an environment where you are not getting profit. It is high time now that we considered our future in the country.

If there is anybody who has queries regarding what we are getting in Tanzania, they can look at the company's financial performance at the New York Stock Exchange as the firm is listed in the world's largest money trading market," he explained.

The firm is running three operating gold mines and two projects. The mines are Bulyanhulu, North Mara and Tulawaka, while the projects are Buzwagi Goldmine and the Kabanga Nickel, a joint venture with Xstrata.

Asked for comment, the Deputy Minister for Energy and Minerals, Adam Malima said he has received the Barrick\'s statement with shock, adding that such a statement should have been officially communicated to the government and not elsewhere.

Without explaining whether the mining firm made profit or not, Malima said "We are the ones who had entered into a contract with the mining firm.

It would have been proper if they had submitted their complaints to us so that we could work on them."

Speaking on the benefits to the country by joining EITI; Malima said the move would help create transparency in all mining activities in the country, from operating costs, profits, losses and its benefits to the ordinary citizens.

"With EITI, all mining stakeholders are required to give full information regarding their activities. Nobody will be able to hide the truth, as they will be monitored at every step," he noted.

He added that EITI is a tripartite initiative which would help build trust between the government, mining firms and ordinary people as every party involved will have access to necessary information such as revenue obtained, costs to run the mining projects and how the money obtained from the mineral wealth have been spent.

In his brief remarks, the Ambassador of Norway to Tanzania, Jon Lomoy stressed the need for the government, if necessary to make 'difficult' political decisions to ensure majority of the people in the country benefit from mining resources and other sectors.

He said, the country is endowed with vast resources but failure by the political leaders to take difficult decisions would keep it in extreme poverty.

"Decisions such as joining EITI and the recent actions taken to address corruption in the Bank of Tanzania External Payment Arrears (EPA) account were a few of the examples of the difficult political decisions," said ambassador Lomoy.

He added that as a prospective candidate for joining EITI, Norway would not hesitate to give all necessary support to ensure Tanzania benefits from its natural resources.

"My government would give the Tanzanian government all necessary support be it moral, financial or even material to ensure the country fulfills this obligation," noted ambassador Lomoy.

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