Monthly Archives: July 2017

Zimbabwe: Gold Reserves to Back Currency

28th July 2017
By George Maponga

Government is building diamond and gold reserves to back the local currency upon its re-introduction in future, Vice-President Emmerson Mnangagwa has said. VP Mnangagwa refused to disclose when the local currency would be re-introduced, but said it would only come back when mineral reserves reached desired levels.

He was speaking during an advocacy meeting on the new Constitution that was organised by the Ministry of Justice, Legal and Parliamentary Affairs in Chiredzi.

VP Mnangagwa oversees the Justice Ministry.

Responding to questions on the prevailing cash shortages, the Vice President said Government was working on ways to stem the shortages.

“We are building reserves of gold and diamonds which if they reach a certain level I will not tell you here, it will then allow us to introduce our own currency that will be backed by those minerals. I am not at liberty to disclose to you the level that we want those minerals to reach before they can back our own currency,” said VP Mnangagwa.

He narrated the history of cash shortages in Zimbabwe saying problems started after the country embarked on the land reform programme. He said Government introduced bond notes to plug the smuggling of the US dollar outside the country.

“We only get foreign currency when we export something or through NGOs that come into our country. Forex also comes from bilateral and multilateral financial support or through Foreign Direct Investment and if we do not get this there will be no forex because the US dollar that we are using is a reserve currency,” he said.

VP Mnangagwa also said Government was concerned that bond notes were now being found in some neighbouring countries, saying investigations of how they ended up there were ongoing.

He revealed that the Chiredzi leg of his ministry’s visit was the first in a series of nationwide new Constitution advocacy meetings at district level.

SOURCE: http://allafrica.com/stories/201707280458.html

Tanzania: Acacia Shares Fall to 3yr Low As Row With Tanzania Grows

26th July 2017

Dar es Salaam — Acacia Mining shares plunged to a more than three-year low yesterday after the Tanzania government demanded the company to pay almost $190 billion (Sh424 trillion) worth of unpaid taxes and fines.

The London Securities Exchange (LSE)-listed equities tumbled as much as 17 per cent yesterday morning after it said it had received a series of notices from the Tanzania Revenue Authority relating to the alleged missed tax payments.

The problems of Acacia’s mines in Tanzania started since March when President John Magufuli banned the export of unprocessed mineral concentrates in an effort to boost the country’s domestic smelting industry. The government has since accused Acacia, one of Africa’s largest gold producers and one of Tanzania’s largest private employers, of illegally under-reporting the amount of metal in its shipments and evading billions of dollars of taxes. Acacia warned last week that it will be forced to mothball its flagship mine if it can’t reach an agreement with the government by the end of September, having burned through almost half its cash pile in the past six months.

Shares in the company had already fallen more than 60 per cent since the start of the dispute.

On the Dar es Salaam Stock Exchange, the counter remained flat at Sh7,500 per share.

“It’s not easy to see immediate changes as the counter is not active since it cross-listed. I think no local investor has ever bought the shares through DSE,” said Orbit Securities general manager Juventus Simon.

The revenue authority’s assessments said Acacia owes the government a total of approximately $40 billion in unpaid taxes plus a further $150 billion in penalties and interest. Acacia has consistently denied any wrongdoing, and said it disputes the tax assessments. It added that it “is considering all of its options and rights and will provide a further update in due course”.

SOURCE: http://allafrica.com/stories/201707260127.html

Tanzania Slaps Acacia Mining With U.S.$190 Billion Tax Bill

By Allan Olingo

Tanzania has slapped Acacia Mining with a $190 billion tax bill, potentially escalating the dispute over royalties the government says it is owed.

The firm said it received a notice on the tax bill Monday from the Tanzania Revenue Authority (TRA) for historical corporate income tax, covering the last 17 years.

TRA claims Acacia, the biggest gold miner in the country, owes the government $154 billion from its Bulyanhulu mine and $36 billion from Buzwagi.

The government said the miner owes $40 billion in unpaid taxes and $150 billion in penalties and interest.

The London-listed company however disputes the assessments.

“The assessments are issued in respect of alleged under-declared export revenues, and appear to follow on from the findings of the First Presidential Committee announced on 24 May 2017 and the Second Presidential Committee announced on 12 June 2017. As we have stated previously, Acacia refutes each set of findings and re-iterates that it has fully declared all revenues,” it said.

Acacia has referred the disputes for international arbitration.

Last week, President John Magufuli threatened to shut down all gold mines in Tanzania if the mining firms fail to resolve the tax disputes.

In response to the tax bill, the Barrick Gold-owned company said it is considering all of its options.

SOURCE: http://allafrica.com/stories/201707260518.html

Kenya: Miner pulls out of Kwale over interference

By PAULINE KAIRU

23rd July 2017

IN SUMMARY

Base Titanium in Kwale pulled out its machines and workers from sites around Magaoni.

A mining company in Kwale has stopped exploring on some sites citing political interference amid fears of missing huge mineral reserves in the controversial zones.

Base Titanium pulled out its machines and workers from sites around Magaoni, following what its general manager for external affairs and development, Mr Joe Schwarz, said were inflamed passions from residents against the firm’s activities.

“The current season has brought with it a lot of political interference and incitement,” he told a meeting of the economic and macro-committee of the Vision 2030 delivery board in Nairobi on Friday.

INCITEMENT

Base Titanium and Vision 2030 had assembled to sign a memorandum of understanding to have the miner as a mining flagship project.

“Misinformation by politicians has gone into inciting residents and land holders where exploration activities were taking place.

“We were working on the site when the agitation and political incitement got to the point where we decided it is not worth pursuing because of threats to security of our employees. So we suspended it,” Mr Schwarz said.

LAND ISSUE

Mr Schwarz said politicians were exploiting land issues, which are already a source of strife at the Coast, in politicking and campaigning, whipping up emotions.

READ: Kwale-based titanium miner Base to pay more royalties

He urged the government to ensure disbursement of royalties to the county to calm the situation.

SOURCE: https://www.google.com/amp/www.nation.co.ke/news/Base-Titanium-suspends-operations/1056-4028772-view-asAMP-hox1qn/index.html

See also – Case Study: The Titanium Issue

Tanzania: Govt Advised On Natural Resources

9th July 2017
The Citizen (Dar es Salaam)

Dar es Salaam — The government has been advised to take concrete measures to ensure that its citizens benefit from abundant natural resources.

The measures include implementing extractive sector laws and regulations, reveal companies’ beneficial ownership, disclose gas and mineral sales, combat corruption and use data to improve institutions’ policies and practices.

Those are recommendations of the Resource Governance Index (RGI) 2017 report launched here last week.

In its findings, the report reveals that better natural resource governance can lift 1.8 billion of the global population out of poverty and that while most countries still faced daunting natural resource governance challenges, wealth isn’t a precondition for good governance.

Countries fail to follow laws

Furthermore, the RGI 2017 findings show that countries have failed to follow own laws and regulations on natural resources and that failure to control of corruption was because of increased gap between legal frameworks and adequate implementation.

Also, the report establishes that countries with good or satisfactory voice and high-level of accountability performed better in value realisation and revenue management.

Presenting the RGI 2017 report at a breakfast debate hosted by a policy forum, the Natural Resource Governance Institute (NRGI) manager for East and Southern Africa, Mr Silas Olan’g, said this year’s report covers 81 countries across the five continents in the world.

“While 47 countries were measured on oil and gas subsector, 26 on the mining and eight were assessed on both subsectors accumulating a total of 189 assessments. The countries were assessed using a composite score comprising three major components: value realisation, revenue management and enabling environment,” he said.

He said realisation and revenue management covered key policy areas administered by NRGI and that enabling environment covers broader governance context.

According to him, Tanzania scores a composite of 53 out 100 in the oil and gas and 49 out 100 in the mining subsector. The country scored 65 over 100 in oil and gas in terms of value realisation. In the mining subsector the score is 54 of 100 and that both subsectors scored 53 of 100 in enabling environment component.

In a group of 55 peers, Tanzania ranks the 22nd in the overall oil and gas score, 8th in value realisation, 34th in resource management and 25th in enabling environment. The country is ranked the 42nd among 89 countries carrying mining activities, the 38th in value realisation, 48th in resource management and 40th in creating an enabling environment.

“The RGI 2017 findings imply that the country is doing well in oil and gas as compared with the mining sector especially in areas of value realisation and creating enabling environment. However, much should be done in the area of revenue management for the country to adequately benefit from abundant natural resources,” he said.

He said the report recommended that Tanzania strengthen and implement extractive laws and regulations, particularly environment, local communities, local content, transparency and accountability.

Mr Olan’g said report has revealed significant difference in average score of laws and practices and that the gap was wider as resource governance becomes poorer, suggesting that good governance in formulating good laws, rules and respective implementation was required.

He said the government was advised to expose true beneficial owners of mining and oil and gas companies, commercial interests of officials and associates, contractual deals struck by the governments, revenue management issues and payments made by the companies.

“Public officials are also supposed to declare stakes they own in the companies. According to report where such declarations are made, they never get published,” said Mr Olan’g during the presentation.

According to him, this year’s report calls for strengthened regulations and presence of independent governing boards appointed on grounds of a well-defined system putting emphasis on technical expertise instead of political affiliations.

“It is also recommended that an open civic space to citizens and journalists lacking freedoms to speak and hold the government accountable should be protected. Also, rule of law should be strengthened, corruption control need to be scaled up and that specific laws on extractives subsector which will have great impacts to the country should be formulated,” he said.

RGI 2017 wants free access to resource governance information by improving data institutions, policies and practices. Improved institutional framework will allow regular and timely data gathering, analysis and dissemination, suggesting that data should be released using open data charter standards to improve transparency.

Former Bariadi East MP John Cheyo said the findings had been released at the right time as two presidential committee reports on minerals showed the country was losing revenue heavily due to gaps between legal framework and implementation of the laws.

He said the country’s legal framework failed to make clear the state’s ownership of natural resources, suggesting that if they were owned by the public it was supposed to be included in the legal documents including the constitution.

He said since the country’s extractive industry was in the hands of the foreign investors, public auditors were not allowed to audit the companies’ financial statements.

“The government is expected to form a team of experts to meet their Barrick Gold Plc counterparts to re-negotiate contracts and other Mineral Development Agreements entered by the country in previous years. The new laws will serve as a platform for the Tanzania team during the negotiation, which I totally support.”

Three bills passed

Parliament recently passed the Natural Wealth and Resource Contracts (Review and Re-negotiation of Unconscionable Terms) Bill, 2017; (Permanent Sovereignty) Bill 2017; and the Written Laws (Miscellaneous Amendments) Bill, 2017.

Sikika executive director Irenei Kiria commended President John Magufuli’s administration for tabling the bills in Parliament under the certificate of urgency, urging that the move was in line with RGI 2017 recommendations that call for strengthened legal frameworks.

“Civil society organisations have for years been demanding transparency in the extractive industry. We have been shouting for disclosure of contracts and respective revenues. We have been fighting for public ownership of the natural resources, how can I oppose that when the government wants to enact laws which will empower the country?”

Tanzania Petroleum Development Corporation board chairman Sufiani Bukurura said external influence on natural resources outcome wasn’t mentioned in the RGI 2017, suggesting that regardless of geographical disparities, countries have greatly been negatively influenced by external forces in decision making to its natural resources.

“Therefore, developed countries shouldn’t be assessed alongside developing countries in the RGI and that mining subsector should be separated from the oil and gas during the assessment,” said Prof Bukurura.

Public and policy engagement expert, Evans Rubara questioned the role of civil social organisations in advising the government on formulating policies, laws and regulations that are beneficial to the country.

@Collouis

SOURCE: http://allafrica.com/stories/201707100179.html

Tanzania: Straight Talk – Gold Concentrates Saga, Turning Point in TZ History?

OPINION

By Ally Salehe

There is no doubt that Tanzania has been endowed with immense resources. So abundant such that it can be stated that it stands the chance to become one of the richest countries in the world.

The resources are scattered in the forests, in the lakes, in the sea and in land. They range from natural gas, oil, iron, minerals to a long list of flora and fauna.

To most of us, Tanzania should have been a donor country had it wisely exploited its vast resources. But instead this has not been the case and hence the citizens hardly enjoy benefits accrued from them.

On the contrary, Tanzania has been a huge recipient of donor handouts and sometimes under conditions that are, at best, dehumanising. This I believe is not acceptable and it should end.

The country was shocked recently when President John Magufuli revealed a very radical approach to order that gold and copper concentrates should be smeltered locally.

However, this was not completely new to Tanzania. The bad smell on this side of investment venture has been known to many Tanzanians, especially through the calls by the Opposition, but no one would listen to them. Those in power looked the other way as opportunists ate the national cake left, right and centre.

Many committees to investigate such trends have been formed, coming up with long reports. Nothing was being done. The good thing this time around is that the President has decided to act.

Some believe that those involved in acts of economic sabotages through mineral dealings were not punished because they were close to the epicentre of power and hence they were protected.

The recent action by President Magufuli is supported by many but not to that extent. Questions are still hanging in the air. Some opine that the removal of Energy and Mineral minister Prof Sospeter Muhongo was just a political campaign to try to cleanse the government and the ruling party which have long been informed of the trend. He is a sacrificial lamb.

Asking Prof Muhongo to step down while this has been happening for years, might appear to mean to absolve all other ministers and key executives who have overseen the ministry and hence the exportation of containers containing the said big amount of gold.

But also this decision will not be of great benefit if the government would not implement what has been advised all along in a bid to totally end the trend but also in a way that the government respects its contractual obligations.

The euphoria should not end with a negative note by being taken to international arbitration bodies for violating contractual obligations as provided under contracts the government has wilfully and freely entered with those firms probably with the right to these containers for processing outside the country.

We believe the government has been prepared to face off any legal challenge that will emanate from such action which seems to be popular with the people, knowing that there are cases that the government has found itself on the wrong side when enough care was not taken.

It is the ardent hope of the citizens that President Magufuli will also turn his head towards other rotten sectors that are sadly part of his own government and where there are complaints that things are not well and the “eating of the country” is going on unabated.

But to many the main problem is that there is a flaw in the law and this should be addressed urgently to save this country before it is too late. We do not require formation of commissions to give publicity to the Presidency when this would have been addressed if there were strong laws and strict implementation.

SOURCE: http://allafrica.com/stories/201707100177.html

Tanzania: Polarised Bunge Endorses Bills On Natural Resources

4th July 2017

By Samuel Kamndaya

Dodoma — Parliament yesterday passed two mineral resources bills after a highly partisan debate that affected the quality of new inputs to the proposed laws.

The Minister of Constitutional and Legal Affairs, Prof Palamagamba Kabudi, told the House that the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Bill, 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Bill, 2017 sought to bring sweeping changes regarding the management of Tanzania’s natural resources.

Quoting one of the speeches of the Father of the Nation, Mwalimu Julius Nyerere, Prof Kabudi termed the laws “redemption” for Tanzania.

“The revolution we are seeking is for all of us…it is not for a few people. When they bullied us, we were all bullied…when they exploited us, we were all exploited and when they ignored us, we were all ignored. It was our weakness that made it easy for us to be bullied, exploited and ignored. The revolution that we seek must be for all of us so that a Tanzanian should no longer be weak for people to use that weakness to exploit and ignore him or her,” said Prof Kabudi, borrowing from one of Mwalimu’s speeches.

That set the tone for heated debate in the House that saw MPs from the ruling CCM endorse the bills unconditionally, while the Opposition said that much as it supported efforts to protect Tanzania’s natural resources, it was concerned that the proposed laws had been rushed through Parliament.

Addressing journalists shortly after the morning session, the Leader of the Official Opposition in Parliament, Mr Freeman Mbowe, said they too wanted Tanzania’s natural resources to be protected, but added that the newly endorsed proposed laws would discourage prospective investors.

“We don’t oppose any decision that seeks to protect our natural resources…far from it. What we are against is the time it has taken Parliament to pass the two bills,” he said, adding that what the Opposition expected was for the process to be more inclusive.

Mr Mbowe said the Opposition feared the decision to ram the bills through Parliament would send the wrong signals to investors.

“As a result, we may not even get what we had planned to get,” he said.

Mr James Mbatia (Vunjo-NCCR-Mageuzi) aired similar sentiments, recalling the year 2002 when President Benjamin Mkapa formed a fact-finding team that travelled to Zimbabwe to learn how the southern African country was handling its reform agenda.

“I was part of the delegation led by veteran politician Kingunge Ngombale-Mwiru, and what we learnt in Zimbabwe is quite similar to what is happening in Tanzania now,” he said.

Mr Mbatia said MPs from Zimbabwe’s ruling party, Zanu-PF, were then endorsing laws purely on a partisan basis, with the opposition being dismissed as stooges of whites.

“Now Zimbabwe doesn’t even have its own currency and the economy is in a shambles,” he said.

Earlier in Parliament, four opposition MPs – Ms Cecilia Paresso (Special Seats-Chadema), Mr John Heche (Tarime Rural-Chadema), Mr John Mnyika (Kibamba-Chadema) and Ms Riziki Mngwali (Special Seats-CUF) – voiced their concern about the speed with which the two bills were being passed.

But CCM lawmakers – including Mr Japhet Hasunga (Vwawa), Mr Adamson Mwakasaka (Tabora Urban), Mr Joseph Kasheku (Geita), Mr Deo Sanga (Makambako), Mr Peter Serukamba (Kigoma North) and Mr Sharrif Mansour (Kwimba) – said the opposition’s fears were baseless.

“It makes little sense for the Opposition to claim that they oppose the bills because they were tabled under a certificate of urgency and yet during the run-up to the 2015 General Election they (the Opposition) picked their presidential candidate (Mr Edward Lowassa) under a similar arrangement,” Mr Kasheku said amid laughter.

Mr Zitto Kabwe (Kigoma Urban-ACT-Wazalendo) said the quality of debate did not match the seriousness of the bills they were about to endorse.

“We were supposed to have these laws as soon as we attained independence…these are revolutionary laws that for the first time state that our natural resources will be owned by Tanzanians,” he said.

Mr Kabwe added, however, that the bills, like current laws, were still silent on extraction and harvesting of natural resources.

“In my view, we need a system in which the investor will be a mere contractor…we should own the natural resources and contract the investor to harvest them on our behalf. Having done that, the investor will be free to deduct his operational costs from the proceeds so that we can share the profits accordingly,” he said.

Among other issues, the bills state that all natural resources belong to Tanzania and will be utilised only for the country’s benefit.

They also seek to make it illegal for an investor to send any complaints regarding investment in Tanzania to any court outside the country and that all grievances will be handled by the country’s legal system.

@TheCitizenTz

SOURCE: http://allafrica.com/stories/201707040116.html

Barrick Gold Tanzania Operations Accused of Financial and Human Rights Abuses: Executives Once Again Fail to Address Human Rights Abuses

(Ottawa) Barrick Gold Corp.’s top brass flew to Tanzania for a meeting with President Magufuli on June 14 to deal with accusations by the Tanzanian government that Barrick’s local subsidiary Acacia (63.9 % owned by Barrick) has failed to pay taxes owed, is underreporting the value of minerals exported out of Tanzania, and is operating without a legal licence.

Just days after Barrick’s Executive Chairman, John Thornton, met with Magufuli, gunshots rang out again at Barrick/Acacia’s North Mara Gold Mine ltd. as hundreds of local villagers invaded the mine site.

“I watched villagers risk their lives by entering the mine site and as I heard the gunshots and human wailing I knew that new victims of violence were being added to an already long list and that one day I will be interviewing their bereaved family members,” says Catherine Coumans of MiningWatch Canada.

Coumans was at the mine site for the fourth consecutive year to interview victims of alleged excess use of force against community members by the mine’s private security and by police paid by the mine to guard its assets. Ongoing violent confrontations at the mine commonly entail use of force by security against villagers who eke out a living by seeking remnants of gold in the mine’s waste dumps. However, large scale mine invasions have erupted periodically throughout the mine’s history.

“The level of frustration and anger I heard in my interviews this year was notable,” says Coumans. “People are fed up with their extreme poverty and the personal losses so many families suffer as a result of clashes with mine security. They are also fed up with the lack of responsiveness of the company to their plight.”

Villagers have lost a lot of land to the mine’s two large open pits and associated infrastructure, contributing to loss of food security. As people have turned to an alternative economy based on gold they have become vulnerable to violence by mine security, losing limbs and life.

The violent clashes with mine security are not restricted to the area around the pits, but, as Coumans investigated this year, also occur in places like official mine road crossings. Furthermore, since 2016, there have been at least four reported drownings in the pit water of the now-abandoned and unsecured Gokona pit. The mine’s grievance mechanism is not functioning to address these many concerns.

“Feelings of frustration and hostility are running high in people surrounding the mine,” says Coumans. “The President’s statement that the mine is operating illegally was often mentioned to me as a trigger for the mine invasions that were going on while I was in the area, and the anger was not helped by news reports and pictures that showed Barrick’s Executive Chairman in the country to deal with the financial threats to the company, while once again ignoring the unaddressed human rights crisis at the North Mara mine site.”

For more information: Catherine Coumans, MiningWatch Canada, catherine@miningwatch.ca

follow us on Twitter | like us on Facebook | forward this to a friend
Copyright © 2017 MiningWatch Canada, All rights reserved.
You are receiving this email because you signed up for MiningWatch e-alerts on our website.
Our mailing address is:
MiningWatch Canada
508-250 City Centre Avenue
Ottawa, Ontario K1R 6K7
Canada

Africa: Can Development Minerals Avoid Abuses and Fuel African Growth?

ANALYSIS
3rd July 2017

By Kieran Guilbert

Dakar — Rising urbanisation in Africa could spur governments to breathe new life into the development minerals sector

On a continent better known for enriching colonisers and corporations by exporting its gold, copper and diamonds, so-called “development minerals” – ranging from limestone to granite – could help Africa fuel its own economic growth.

The sector, estimated by the United Nations to employ at least 8 million Africans, could create millions more jobs across the continent – many for young people and women – to meet a fast growing need for housing and infrastructure, mining experts say.

Development minerals refer to materials and minerals that are considered low-value – such as granite, gravel and sand – and are mined, processed, manufactured and used locally in industries from construction and manufacturing to agriculture.

“They are significant because the population of Africa is going to keep booming, with many living in urban environments,” Antonio Pedro, the Central Africa director at the U.N. Economic Commission for Africa, told the Thomson Reuters Foundation.

“The potential of these minerals for local economies is much higher than for metallic or precious minerals, as entry barriers like research and development, and capital, are lower,” he said.

The European Union, the African, Caribbean and Pacific (ACP) nations and the United Nations Development Programme (UNDP) in 2015 launched a $14 million project to boost the fledgling sector and improve its oversight.

But like Africa’s big extractive industries – plagued by problems from child labour to poor health and safety standards – the potential of the development mineral sector may be held back by labour and rights abuses unless it is properly regulated.

“These commodities (development minerals) aren’t going to fuel wars or foul rivers,” said Daniel Franks, manager of the ACP-EU development minerals programme.

“Yet there are a large number of labour and health and safety issues which are common throughout the sector…and child labour is prevalent,” he added.

URBANISATION RISING

African governments have long been encouraged, or pressured, by multinationals to prioritise the mining of metals for export, which generate quick and big returns for national coffers while allowing authorities to take a back seat, industry experts say.

“Governments are extracting the royalties, rather than using them to develop expertise locally or improve the mining sector,” said Gavin Hilson, a professor and the chair of sustainability in business at Britain’s University of Surrey.

“But there is potentially serious stream of revenue from artisanal and small scale mining if you regulate it and tax it properly.”

Decades of neglect have led to poorly designed or implemented policies for small-scale mining, and a lack of rights and support for miners, the United Nations says.

But rising urbanisation in Africa could spur governments to breathe new life into the development minerals sector.

Half of all Africans will live in cities by 2030, from 36 percent in 2010, according to the World Bank. To cope with population growth, Africa’s major cities will need more roads, hospitals and power stations.

Around $360 billion in infrastructure investments are needed by 2040 to make the continent competitive and productive, the African Development Bank says. For each billion invested, between 3 and 7 million jobs are created, it estimates.

Plunging commodity prices – which saw economic growth in sub-Saharan Africa slump to a two-decade low last year – could also prove a catalyst for the development minerals sector.

Nigeria, a major oil producer, is looking to diversify its economy away from a reliance on crude production amid its first recession in 25 years, and small scale mining is on the agenda.

“Previously, the government was only interested in tax revenues (from the mining sector),” said Nigerian civil servant and mining official Sam Hart. “Now, productivity comes first.”

CONSTRAINTS

In many countries across the continent, informal precious metal and diamond mines are often prey to violence, control and extortion by armed groups, and even the police and military.

“But when you open a granite mine, hundreds of people aren’t going to come to argue, fight, and demand money,” said Bob Andriamifidy of Progranit, a granite mining firm in Madagascar which has a public project for constructing rural roads.

And in a continent with high levels of youth unemployment, the development minerals sector employs many youth and women – estimated to make up over 40 percent of the workforce.

To encourage the sector to grow without exploiting its workforce or polluting the environment, the ACP-EU project is working with governments, small mine operators and communities to provide training and boost regulations on health, safety and the environment.

While mining experts, officials and operators are quick to hail the promise of development minerals, it could take a long time for that potential to be fulfilled, according to Dirk Willem te Velde of the Overseas Development Institute (ODI).

“Institutional constraints are holding back the sector – there are a huge amount of natural resources in the soil across Africa,” said te Velde, senior research fellow at the ODI, a UK-based thinktank. “Good governance and regulations are key.”

Reporting By Kieran Guilbert, Editing by Ros Russell

SOURCE: http://allafrica.com/stories/201707030711.html

Tanzania: Thinking Aloud – Yes, It’s Daylight Robbery in the Extractive Industry

29th June 2017

By Prof Zulfiqarali Premji

Historically Africa has always been a silent victim. First it was the slave trade followed by plundering of natural resources, leaving our populations in abject poverty.

Our own previous, greedy and unpatriotic leaders signed the mining contracts that hugely favour foreign investors and this is why our minerals are stolen right under our very own eyes without any shame. Enough is enough.

Notwithstanding the contracts, international courts or an independent analysis of the sand, this is daylight robbery that has to end. It is better that these mines are closed and there is no more exploitation than to lose our minerals. The simple question is: why are these mines still operational despite being reported that they are losing $1 million per day since sand exports were halted? Logically the mine owners should have by now sought redress at international courts.

I do not believe in economic diplomacy if it shields and defends economic thievery. Whoever said that investors will shy away is misleading since the world will judge us on our merits and being victims of multinational corporations. We should rather deal with a few but fair and honest investors rather than a multitude of dishonest investors.

The report of the probe team led by Prof Abdulkarim Mruma presented on May 24 is very clear and self-explanatory. In simple language, these multinational extractive corporations operating in Tanzania have been stealing our wealth and the painful aspect of this theft is that our own people are involved. There is nothing sophisticated in this theft – they are just understating (under-invoicing) the true value of what they are exporting.

The reappointing of ministers and other high officials from previous phases of the government is a big mistake. Your Excellency Mr President, the majority of the re-appointees are a liability to your administration. The earlier they are dropped the better. Back to the extractive sector, the question I ask is: how much is Africa benefitting from the extraction of its abundant resources?

Natural resource extraction contributes more than 30 per cent of Africa’s GDP. According to a McKinsey report, resource extractive industries “will continue to profit from rising global demand for oil, natural gas, minerals, food, arable land, and the like”. So, how much is Africa gaining?

According to Carlos Lopes, the executive secretary of the UNECA, “Average net profits for the top 40 mining companies grew by 156 per cent in 2010 whereas the take for governments grew by only 60 per cent, most of which was accounted for by Australia and Canada.”

He points out that the profit made by the same set of mining companies in 2010 was $110 billion, which was equivalent to the merchandise exports of all African LDCs in the same year.

“It is fair to say therefore that the resource-to-development model puts raw materials suppliers at a significant disadvantage. The conclusion that can then be drawn from this situation is that the current resource-for-development model is not working to bring about equity or boost development.”

I strongly believe that the extractive sector provides huge opportunities for sustainable development and poverty reduction if properly managed with the right mix of policies and enforcement systems in place. The issue at hand is, without exception, the high levels of public sector corruption.

If accountably governed, natural resource wealth could be a boon to a society, enabling valuable investments in infrastructure, human capital, social services, and other public goods.

This is the time when we need help from countries that are our bilateral partners but also host these multinational corporations to investigate these multinational corporations.

Business transactions of these companies are illegal, morally questionable and exploitative. We do not ask for aid or charity. What we are asking is for these countries to investigate the dealings of these multinational corporations and provide us the findings.

This is an economic war and for one to fully participate and support our President, we should know the key elements of oil and mining contracts thus these contracts should be made public. Legislatures can play a crucial role in this process.

The Public Accounts Committee in Parliament and the Opposition can be a particularly force for safeguarding the management of public assets and auditing state-owned enterprises.

There is only one solution to this saga – pay us what was looted all this years or else leave us in peace.

SOURCE: http://allafrica.com/stories/201706300129.html