Monthly Archives: November 2017

Kenya: Kwale residents want more from sands mining project

By Njonjo Kihuria Published Fri, November 24th 2017 at 00:00
Updated November 23rd 2017 at 23:32 GMT +3

The Base Titanium mineral project is arguably the biggest extractive investment in the country.

This year has particularly proved successful for Base, following the mining of over 10 million tonnes of ore on its expansive 4,200-acre leased land.

This led to the exportation of 671,000 tonnes of ilmenite, rutile and zircon.

The company has since 2014 spent over Sh1 billion on projects that benefit the local communities in Kwale County.

Some of these were implemented to compensate those that were moved from the mine site and settled elsewhere, while others fall under corporate social responsibility (CSR).

The company has also provided employment and training opportunities to residents and others from different parts of the country.

The projects that the company has invested in include building of schools, dispensaries, social halls, sinking water boreholes and scholarships for needy students.

“Since we started operations, we have handed scholarships to over 1,000 students from this region,” Colin Forbes, the general manager in charge of environment and community affairs told, The Standard in a recent interview.

Mr Forbes said the company has helped to commercialise farming of Irish potatoes, sorghum and cotton. However, the people near the mine at Maumba/Nguluku area of Kinondo and those relocated from the site and settled in Bwiti in Msambweni, say their lives have deteriorated as the company makes capital out of their former land.

Mining royalties

The 380 families resettled in Bwiti complain that they were inadequately compensated.

Former assistant minister Kassim Mwamzadi, who owned land in the mine site, was a member of the Maumba/Nguluku Farmers Association that negotiated with the Government and Base Titanium on the acquisition of their land.

“We were harvesting crops on our land and crops like coconut take about seven years to mature, meaning we would get no proceeds in that period. Some of those being asked to move were too old to start afresh. These are some of the reasons we were demanding higher compensation,” Mwamzadi.

The mining Act 2016, gives the national government 70 per cent in mining royalties, the county government 20 and 10 per cent to the community where mining occur.

Mr Mwamzadi, however, wants this clause clarified to specifically state that the 10 per cent goes to the “people who were removed from the mining area” or those who were relocated, to benefit.

According to Forbes, the ‘fencing’ done before mining commenced, gave employment priority to the former residents of the mining site and its neighbourhood, before searching for skilled employees from the rest of Kwale, coast and nationally in that order. “But our people are complaining that this priority order has not been strictly followed,” Mwamzadi complained.

Forbes, however, counters that 65 per cent of its workforce is drawn from Kwale.

The former assistant minister acknowledges that the company has followed the guidelines of the Resettlement Action Plan, by putting in place social amenities including schools and dispensaries in the resettlement areas.

Too old

On further acquisition of land for mining in Kwale, Mwamzadi advises those who would be affected to “cooperate as the Government would ultimately acquire the land that it requires, but be very firm in demanding ample compensation”.

Said Ali Mwang’ombe, who lives in the neighbourhood of Base Titanium in Bomamani, agrees.

“We hear they want to expand mining to Bomamani, Magaoni, Mwaloya, and Mkambani. Some of us are too old to start all over again and they must give us compensation to keep us comfortable for the rest of our lives.”

For most residents, provision of water is a major bone of contention.

Many complain that the boreholes are far apart and most were using unsafe water from shallow wells.


Kenya: Host communities still in the dark about minerals benefit-sharing deals

By Victor Bwire For Citizen Digital
Published on 13 November 2017

While the landscape in the extractive industry in Kenya has changed dramatically with the enactment of several laws to guide the development of the industry and for the good of the country and the communities at large, a lot of grey areas still abound. Accountability and transparency in the benefit-sharing arrangements is still faced with challenges.

With the anecdotal evidence from some African countries including Uganda, Nigeria and Ghana where mining has been characterized by corruption, exclusion of the host communities from benefits and lack of information on process in the industry, the national government and county governments need to put in place mechanisms that will enhance public participation, access to information and community access to related resources.

Both the national and county governments have obligations to support the development of local communities’ capacity to engage with the mining companies regardless of external investments especially in light of the social, economic and political marginalization of rural host communities. They must be actively involved in the process of consultations, agreements and monitoring of compliance.

Of immediate concern will be the issue of access to information by ensuring that laws in the sector allow inclusion of the most marginalized members of the host communities, including women and the youth who should be allowed not only to participate but also access benefits.

The Free Prior and Informed Consent

Both the right to information and public participation laws require prioritization of communities in the oil and gas sector or natural resources distribution processes. But now many communities are yet to benefit from hosting natural resources.

Due to lack of access to information and poor public participation practices by international investors, and the fact that Kenya is yet to join to the Extractive Industry Transparency Initiative, knowledge among the host communities on what the benefit-sharing and land acquisition processes are still a mirage. Who knows what the current agreements provided for, how much was already pocketed from the extractive industries and what price will firms pay?

In a report recently released by Oxfam entitled The Free Prior and informed Consent, (FPIC), done in Turkana on Tullow and Africa Oil’s community engagement approaches, it was established that many community members are not aware of the existence or contents of the public participation and benefit-sharing documents and residents raised differing understanding of what was agreed with the mining companies.

Its apparent that most of community engagement strategies to increase public participation and understanding, information-sharing and especially in land use or content of production agreements by the international investors are still wanting and face resistance by the host communities.

There are still serious gaps in terms of who monitors implementation of commitments provided in the Corporate Social Responsibilities by the mining companies and who supervises the monitoring of emerging social, environmental effects on the communities in changing dynamics because most of the leaders appointed to represent the community are ill-prepared for the task – they have no full range of potential risks and impacts across the project life cycle – to make informed decisions.

The study also reports that women are excluded from the public participation and benefit-sharing meetings, the communities are dominated and represented during the meetings by relatively well-off influential men – which runs the risk of male biased elite capture and the marginalization of women voices, combined with personal conflict of interest. The communities are not up to the task of understating the industry, lack experience in negotiating long-term arrangements with international investors and are not clear on how to maintain active engagement.

The study, borrowing from international best practices recommends for oil, mining and gas companies to reveal the same basic information about the payments to a state and communities, benefits to citizens and openness and transparency.

It recommends that companies must maintain deep routine and regular monitoring of public engagement and information-sharing sessions and events so that promises made to the host communities are known.

It’s important that they enforce their contract disclosure requirements to help ensure that communities have adequate information regarding the fiscal terms of agreements reached between companies and governments.

Those working in the oil and gas sector must ensure they strategize so that they influence the country’s and county’s legal framework to be more explicit in mentioning the Free Prior and informed Consent (FPIC) and to build in consistent use of key FPIC concepts and language including in the proposed Petroleum Bill 2016 and in the regulations that guide the implementation of recently enacted laws including the Community Land Act 2016.

The FPIC principle safeguards the rights of indigenous communities which are affected by major investments including in the oil and gas industry. It is used to reduce social conflicts as well as increase the legitimacy of a project in the eyes of all stakeholders and the right holders Constitutional protection of Property & Compulsory acquisition rights and procedures

The writer is the Programmes Manager at the Media Council of Kenya and teaches Environmental Journalism.


The tax trick big miners use to avoid paying millions

ABC Four Corners and International Consortium of Investigative Journalists

5 November 2017

The Australian Tax Office (ATO) has taken action against 19 multinational companies as it unpicks a scheme capable of pushing millions of tax dollars offshore.

Key points

The ATO has taken action against 19 companies over a cross-currency interest rate swap scheme.

The ATO is seeking the Paradise Papers in order to analyse the Australian implications.

The Paradise Papers reveal mining giant Glencore used the currency swap scheme.

The ATO is also cracking down on high-profile Australian advisory firms and an international web of offshore law firms suspected of promoting tax avoidance schemes through tax havens.

The ATO investigations have come to light during a Four Corners project in partnership with the International Consortium of Investigative Journalists.

The largest leak of documents in history has exposed the tax secrets of a host of large multinational companies.

The Paradise Papers leak has uncovered confidential emails, board minutes and tax-structuring plans originating from global offshore law firm Appleby, Singaporean firm Asiaciti Trust and 19 corporate registries in tax havens, obtained by German newspaper Suddeutsche Zeitung.

The documents show how major multinationals have used the tax haven of Bermuda to structure their Australian debts and employ complicated financing schemes for their Australian subsidiaries, with the suspected goal of dramatically cutting their Australian tax bill.

Paradise Papers

The cache of leaked documents reveals an industry designed to sell secrecy. This is one story from a Four Corners investigation into the Paradise Papers.

ATO deputy commissioner Mark Konza said investigations had led to 19 companies that appear to be exploiting a scheme known as cross-currency interest rate swaps.

“It’s a two-step scheme, it’s difficult to detect, and it took us a little while to detect it, but now we have we are following it up, we’re making a lot of inquiries about it,” he told Four Corners.

The swaps can be perfectly valid – they can swap, for example, a loan in $US to a loan in $A, with each side effectively swapping the risks and interest rate of the original currency for the risks and interest rate of the swap currency.

Tax experts say when the swaps are done between a parent and its subsidiary they can sometimes be used by multinationals to avoid tax.

A total of 19 companies have faced ATO action over the scheme, with 13 of them still under review.

On top of the targeted companies, the ATO has issued legally-binding formal notices to advisory firms, asking them whether they helped implement the swaps or other tax-driven schemes.

Four Corners can reveal 21 formal notices have been issued to accountants and other so-called “intermediary” firms in Australia, with further action expected.

And Mr Konza said the ATO was stretching its net offshore, saying international tax regulators wanted to disrupt the operations of offshore law firms in tax havens.

He also said the ATO wanted the Paradise Papers data to begin “analysing the Australian implications”.

Coal miner Glencore used the scheme

The Paradise Papers show Australia’s largest coal miner, Swiss-based Glencore, used the swap financing scheme that has been the subject of scrutiny by the ATO.

Four Corners has also established the use of the swaps by Glencore was the subject of a voluntary review by the ATO.

Glencore, which is also the world’s biggest commodity trader, produces and exports coal, copper, zinc, nickel, oil, grain and cotton from Australia.

Its chief executive, Ivan Glasenberg, and four other executives became billionaires when the company listed on the London stock exchange in 2011.

But it reports very little taxable profit in Australia.

In 2014, Glencore made $23.7 billion in revenue (more than Australia’s second largest listed company, Westpac) and made $296 million in profit.

This figure represents about $1.30 in profit for every $100 in revenue. It paid tax of $55 million on its profit.

The leaked documents reveal Glencore used the swaps in a $3.7 billion refinancing of its Australian operations in 2013, and in a major Australian restructure in 2014 that left it with debts of $US11.6 billion.

The complicated swap financing structures used by Glencore were routed through Glencore companies in Bermuda.

High debt a tax avoidance strategy: Tax activists

Tax activists attribute Glencore’s low taxable profits in part to deliberately high levels of debt and the use of complicated financing structures to export taxable profits to low or no-tax countries such as Bermuda.

Major multinational companies, their lawyers and accountants work hard to ensure their activities comply with tax law that states any financial manoeuvring should not have a dominant purpose of reducing tax.

But Jim Henry, a New York-based senior adviser to the activist group Tax Justice Network, said it was no surprise to see mining companies loaded up with debt to avoid tax.

“Well, it’s a typical pattern that you would say many companies that are involved in the extractive industries have used to basically move income from high-tax jurisdictions to low-tax jurisdictions,” he said.

“It’s just a tax avoidance scheme. It’s been done by dozens of companies. The mineral industry is rife with this behaviour.

“I think Glencore is one of the more egregious participants in this, but it’s not unusual.”

Use of swaps dropped by Glencore

Glencore said it voluntarily participated in a “pre-lodgement compliance review” with the ATO and disclosed and discussed its use of the swaps.

It dropped the use of the swaps in 2016, but said this had nothing to do with ATO action.

Glencore said it had used the swaps to hedge foreign exchange risks, but they were no longer needed after a ruling from the ATO about how it reported its financial accounts.

Glencore said it had recently shut many of its Bermuda-based companies, it paid all taxes required by law, and debt had been cut in Australian operations by $US4 billion since late 2014.

It said it was not currently under ATO audit or review about its use of debt or the swaps.

However Glencore revealed it remained under ATO audit for its use of a Swiss marketing hub and was objecting to assessments from two other audits, which it has paid $US42 million to resolve.

The ATO now has about 20 major resources companies under audit as it steps up investigations into the high use of debt by big mining and energy companies, and their use of trading or marketing hubs.

Glencore said Australian income tax payments had been affected by challenging market conditions, including a slump in commodity prices and inherited tax losses, so “the business did not pay tax due to the lack of profitability in the underlying operations”.

“Glencore’s operations in Australia are now profitable and hence tax will be paid,” Glencore said.


Reporters: Stuart Washington, Marian Wilkinson


The major challenge of resource availability in the 21st century

Published by Mines and Communities on 2017-11-02
Source: Oxford Martin School, John Beddington (2017-11-02)

The following analysis by professor John Beddington of the Oxford Martin School is one that communities (and others) may find of benefit, when confronting the seemingly unstoppable onslaught march of “bad” (some call them “mad”) extractive endeavours.

The major challenge of resource availability in the 21st Century

John Beddington
1 November 2017

The last half of the 20th Century comprised five decades of exponential growth and achievement in scientific progress. Over that short period, technological and medical innovation – coupled with economic alleviation of poverty – led to dramatic collapses in infant mortality rates and improvements in living standards. Global life expectancy in 1950 was 47; it is now 70. GDP per capita nearly quadrupled.

But that unprecedented shift in living standards also brought accelerating greenhouse gas emissions, large-scale exploitation of natural resources, and vast amounts of material extraction.

In key ways, the early 21st Century is already determined. Demographic momentum will result in an extra billion people by 2025, and global population is expected to exceed nine billion by 2040. Urbanisation will see around 58% of the world’s population living in cities by 2025. A continuing increase in overall prosperity is likely to continue, with the global middle class numbering nearly five billion people by 2030. Finally, greenhouse gases in the atmosphere now will drive changes in temperature for almost a decade.

Projections taking into account demographics, urbanisation and prosperity suggest radically increased demand for water, energy and food. The gap between existing supplies of water, even accounting for historical improvements in water productivity is 60% of projected 2030 demand. The anticipated future demand for food far exceeds historical yield improvements, even those achieved during the ‘Green Revolution’ of the 20th Century. And energy demand is projected to increase by around 40% to 2040. These challenges of food, water and energy security are all set against the risk multiplier of unavoidable climate change.

Technological innovation in the late 20th Century also resulted in the tools of renewable energy – in particular, wind and solar power – which are now being brought to scale. The system-wide implementation of these technologies requires significant infrastructure investment and further system innovation, in the form, for instance, of grid integration and storage and smart or mini grid systems. The need for new technology investment is also apparent in areas of transport (for instance for electric vehicles, alternative fuel vehicles, and public transport systems), in energy efficiency (for instance industrial energy efficiency measures, green buildings, lighting, and advanced materials), and also in agriculture (for instance in the development of green fertilizers).

A decarbonized economy has many environmental co-benefits: lower particulate matter in air; lower eutrophication in water; lower eco-toxicity in living biomass. At the same time, however, low-carbon technologies and infrastructure frequently have a high material footprint per unit of final energy delivered. Demand for materials such as aluminium, copper, iron and cement is anticipated to continue at a higher constant rate in a low-carbon future compared to one where business continues as usual. This is partly because new energy technologies have much higher bulk material requirements than coal or natural gas, particularly in their initial capital installation phases. New energy technologies – and new transport technologies – are also heavily reliant on metals, whether the common metals such as copper and aluminium or more specialised metals such as lithium, cobalt, and the rare earth elements.

The trend towards greater urbanization also has a substantial effect on demand for basic materials such as cement, concrete, glass and steel. The design of new cities is vitally important for our future climate: cities are responsible for 70-75% of global energy and materials, and buildings alone emit around 33% of GHG emissions. Furthermore, increased food demands require yield improvements which have historically relied heavily on fertilizers containing nitrogen and phosphorus.

For all these reasons, the 21st Century is likely to see extremely heavy demands on primary materials. If current systems of production are not changed, a world of nine billion people will be requiring around 180 billion tonnes of materials annually by 2050. That is almost 3 times today’s amounts.

In an ideal world, two types of decoupling will occur. Firstly, even as improvements of human well-being and economic activity occur, the increase in resource use can be slower. Secondly, even as resource use increases, the environmental impact of that resource use can be reduced, and made to decrease over time. This is the essence of a sustainable economic system. In terms of material use, that concept requires the redesign of product supply chains to contain multiple points of efficient design, optimization and recycling. That includes the most visible (and socio-politically complex) point of environmental impact, that of primary extraction.

These required changes are radical and come at a time of great uncertainty about the future. Those countries and institutions that adapt fast through the transition will be best placed to face these challenges. In a world where China is forecast to be the largest economic power by 2030, it is notable that one of the five goals embedded in that country’s national development plan is ‘ecological civilization’. This national strategy was reiterated at the recent 19th National Congress by Xi Jingping.

Whether concepts of a ‘green economy’, the ‘circular economy’ or indeed of ‘ecological civilisation’ can come to reality depends to a great extent on how scientists, businessmen and women, and policymakers approach the transition from a 20th Century fossil fuel economy to a 21st Century metals-and-minerals economy. Many energy carriers may end up in long-lived stocks; carbon dioxide-emitting cities last for generations. We are at the beginning of the pipe in a situation wherein end-of-pipe solutions may be limited. And in the words of Einstein, at the very beginning of the 20th Century, “the world will not evolve past its current state of crisis by using the same thinking that created the situation”.

The Oxford Martin School is proud to partner with the Veolia Institute to explore some of the resource availability challenges and opportunities of the 21st Century through a joint conference, Strategic Materials for a Low-Carbon Future: From Scarcity to Availability. To learn more, visit the conference website.

This opinion piece reflects the views of the author, and does not necessarily reflect the position of the Oxford Martin School or the University of Oxford. Any errors or omissions are those of the author.


South Africa: Why Communities Have Gone to Court Over the Mining Charter

“Nothing about us without us”

2nd November 2017
By Lee-Anne Bruce, Robert Krause, Wandisa Phama and Louis Snyman

The mining industry has a very particular history in South Africa. It has exploited people for their labour, stripped them of their land, caused environmental harm, and left communities with a range of social problems. It has been built on a system of inequality and exclusion which continues to this day. It is about time this changed.

Its legacy is nowhere more obvious than in communities affected by mining. These communities continue in appalling conditions of poverty and face the costs of mining every day. They have lost farm land to mining operations and suffer the health consequences of polluted water, air and soil. They cannot choose where to live and they have no say in where mining should take place. Although they bear the greatest burden of mining, they share in almost none of the benefits.

One of the most important tools we have to address this ongoing inequality and promote transformation in the mining sector is the Mining Charter. The Charter is a document developed by government that sets out specific targets for the mining industry. It aims to ensure that people who have been excluded from the sector are able to participate in the industry and enjoy some of the benefits that flow from mining. The Charter was first introduced in 2002 and has been updated twice since then. The most recent version was released in June this year.

This version of the Charter has a number of important, progressive amendments that go some way to promoting transformation and community interests. For example, it emphasises the importance of development in mining affected communities, and instructs mining companies to set aside funding for infrastructure and income generating projects. Importantly, this funding must be related to the size of the mine and its impact.

There are, however, some aspects of the Charter that are concerning. Many of its provisions are vague about how to implement the targets and administer the vast amount of funding at stake. Importantly, this version (as with all other versions of the Charter) was developed without engaging with the people it is intended to benefit, the mining affected communities themselves.

As with all laws and policies, government issues drafts for public comment. The draft version of this Charter was published in the Government Gazette in April 2016. This was, however, almost completely inaccessible to communities who were either not even aware of it, or not able to access it online, or not able to find a copy in any language other than English. Government failed to put this document into the hands of the people.

Instead, the Department of Mineral Resources held two meetings that we are aware of: one in Pretoria and one in Cape Town. These meetings took place far from where a majority of communities live, with no offer to assist them to travel, and at very short notice. It appeared that the only people directly invited to participate in these meetings had already made written comments on the draft Charter, and there was little engagement with their submissions.

This is simply one example of the consistent lack of meaningful community engagement by government. Over the past 15 years, negotiations on the Mining Charter have involved only three parties: the state, the mining companies and the unions. Communities have hardly any say in a document that aims to encourage their participation. Instead, they are dictated to about their needs and how best to develop their areas. This means the provisions in the Charter are not coming from communities, may not be responding to their lived realities and may be difficult to implement without their buy-in.

Three mining community networks – Mining Affected Communities United in Action, Women Affected by Mining United in Action and the Mining and Environmental Justice Community Network of South Africa – have taken a stand against this. These networks, represented by the Centre for Applied Legal Studies, have recently applied to the High Court in Pretoria to join a review of the Mining Charter on the basis that it was developed without engaging communities.

For a document that aims to encourage community participation and transformation in the mining sector to be developed without its key beneficiaries is senseless. Communities are the very definition of a core stakeholder in mining and should have a say in the laws, policies and programmes that affect them. In fact, community voices should be at the centre of these negotiations. We cannot have a truly transformed Mining Charter or a truly transformed mining industry without meaningful community participation.

The authors are with the Centre for Applied Legal Studies (CALS), a public interest law organisation based at the School of Law at the University of the Witwatersrand.

Views expressed are not necessarily those of GroundUp.


Australia: Adani’s unholy Carmichael project condemned by Australian bishops

Published by MAC on 2017-10-31
Source: Sydney Morning Herald (2017-10-31)

Recent media coverage has revealed that the Indian coal “behemoth” Adani is using offshore tax havens to conceal its severe indebtedness (See: Adani loses nearly all its Mundra investment).

Now, Australian Catholic and Anglican bishops have joined together in a major campaign to halt the company’s largest and most costly venture – the Carmichael mine-to-port in north Queensland.

In a strongly-worded statement they cite Pope Francis’ encyclical on the environment of June 2015, in which he said “the Earth, our home, is beginning to look…like an immense pile of filth”.

And they deplore the government and Adani’s’ “lack of recognition for indigenous people, land clearing, a lack of transparency by big business and a gap between the ‘haves’ and the “have-nots”.

Catholic, Anglican bishops unite in opposition to Adani mega-mine

Nicole Hasham

Sydney Morning Herald

30 October 2017

It may have the Turnbull and Palaszczuk governments firmly in its corner, but the Adani super-mine is facing a formidable new opponent: the Christian faith.

The Catholic and Anglican bishops of Townsville have issued a joint statement to their followers criticising “projected mega-mining developments across Queensland, especially the Galilee Basin”, and accusing politicians and big business of failing to protect the common good.

The bishops’ message puts them head-to-head with Adani, the Indian mining behemoth behind the $16.5 billion Carmichael mine proposed for the Galilee Basin. It also puts them at odds with the local council and state and federal governments, which resoundingly support the project.

Adani has located its regional headquarters in Townsville, and the statement will fuel debate in the already divided community over what would be Australia’s biggest coal mine.

The Right Reverend William Ray of the Anglican Diocese of North Queensland, and the Most Reverend Timothy Harris of the Catholic Diocese of Townsville, issued the statement to their parishes on Saturday.

They cited Pope Francis’ ground-breaking encyclical on the environment in June 2015, in which he said “the Earth, our home, is beginning to look…like an immense pile of filth”.

“We, too, as bishops in north Queensland, have concerns about many global and local issues that are impacting negatively on our environment and which require greater dialogue, examination, prayer and action,” the statement said.

The bishops said human dominion over the planet should be understood as “responsible stewardship”, especially to future generations.

“The elephant in the room is obviously the impending loss of the Great Barrier Reef with back-to-back yearly coral bleaching across two thirds of its length,” they said.

The bishops lamented toxic run-off, increased sea freight traffic and marine pollution, adding that government spending to fix the reef’s problems was “not matching needs”.

They did not name the Adani mine, but warned against “projected mega-mining developments across Queensland, especially the Galilee Basin”, adding such projects sought to exploit a “coal resource for all ages.”

“Politics and business have been slow to provide strong leadership or urgency for the common good: a leadership that incorporates environmental issues as much as the financial, social or political issues,” the statement said.

“Although there are a limited number of politicians who are active on behalf of the environment, they are to be commended.”

The statement reflected the personal view of the bishops. It also expressed concern about a lack of recognition for indigenous people, land clearing, a lack of transparency by big business and a gap between the “haves” and the “have-nots”.

Adani’s Carmichael mine has emerged as a key issue in the Queensland state election, to be held on November 25.

Adani protesters reportedly heckled Premier Annastacia Palaszczuk and Opposition Leader Tim Nicholls on the campaign trail on Sunday and Monday.

The mine would extract 2.3 billion tonnes of coal over its 60-year life. Supporters say it will bring much-needed jobs and social benefits to Townsville and the broader region. Detractors fear the effects on tourism and the environment – especially the Great Barrier Reef – and say the company’s promise of 10,000 new jobs is vastly inflated.

Federal Resources Minister Matt Canavan – back in the job on Friday after the High Court confirmed he was eligible to sit in Parliament – reportedly listed the Adani project and a new coal-fired generator as his first priorities.

The local coal industry has other firm backers – Nationals MP George Christensen took out several full page ads in Mackay’s Daily Mercury last week, urging that a “clean” coal-fired power plant be built in north Queensland.

President of the Australian Religious Response to Climate Change, Thea Ormerod, applauded the bishops’ stand and said it “could help shift the mood of the electorate over time”.

She said in the 2016 census, 26.5 per cent of Townsville residents identified as Catholic and 15.2 per cent as Anglican.

“Australia needs such prophetic witness to the importance of protecting our common home over profit-seeking extractive industries,” Ms Ormerod said.

“Adani’s Carmichael mine should never be allowed to go ahead…as a nation, we have the resources to support those communities who are being impacted by our necessary transition away from mining.”


Tanzania: Barrick in $11m Loss After Securing Money for Tanzania

27th October 2017
By Alawi Masare

Dar es Salaam — Barrick Gold Corporation has reported a net loss of $11 million in the third quarter after increasing a tax provision related to the “good will” payoff of $300 million agreed with Tanzania.

The mining giant made a net income of $175 million over the same period last year. Barrick produced 1.243 million ounces of gold in the third quarter, at a cost of sales of $820 per ounce compared to 1.381 million ounces, at a cost of sales of $766 per ounce in the prior-year period.

Barrick blamed the decrease in net earnings on the impact of the concentrate export ban by the government and also lower gold production and prices.

The company’s existing tax provision was $128 million but the financial results announced on Wednesday night indicated to have increased by $172 million to $300 million – the amount it agreed would be paid by its subsidiary Acacia to Tanzania as part of the proposed framework reached last week.

Barrick’s move is proof of securing the money due to the government and puts to rest any fear that the funds may not be released. However, the mining company appeared to place a catch on the release of the funds, tying it with Acacia’s business flow and the outcome of talks to lift the ban on concentrate export.

“Given Acacia’s current financial position, these payments would be made over time, using Acacia’s ongoing cash flows. As such, payment would be also conditional on Acacia’s ability to sell doré (gold bars) and concentrate,” Barrick said in its statement.

Shares in Acacia were up 3 per cent to 190.14p on Thursday morning, still down more than two thirds since 1 March when the concentrate ban was imposed by the government to push for negotiations of several tax income and other economic benefit issues.

Barrick’s tax provision announcement drew the now familiar wait and see approach from its subsidiary in London and who will be expected to shoulder part of the cost to pay Tanzania. Barrack owns 63.9 per cent stake in Acacia.

In its rejoinder, Acacia which operates Buzwagi, North Mara and Bulyankulu mines said it does not intend to make any changes to its own provision of $128 million in likely back tax charges as a result of Barrick’s own announcement.

“Once Acacia has received and had the opportunity to assess a detailed proposal, Acacia will also be able to assess the potential impact on Acacia’s historical uncertain tax positions,” the London Stock Exchange-listed company said in its market updates.

Barrack Gold was locked in negotiations with the government for about three months since two presidential committees accused Acacia of cheating in taxes and reportedly operating illegally in Tanzania.

In July this year, Tanzania Revenue Authority (TRA) slapped Acacia with a jaw-dropping $190 billion (Sh418 trillion) in revised taxes, interests, and fines following the committees’ reports.

The two negotiating teams led by the Minister for Justice and Constitutional Affairs Prof Palamagamba Kabudi on the side of Tanzania and Barrick executive chairman John Thornton on the other side, came out last week announcing to have struck a deal.

The Toronto-based company said it will pay the government $300 million as part of the deal, give the government a 16 per cent stake in its mines, and will equally split “economic benefits” from the mining operations.

Under the proposed 50/50 economic benefit sharing, the government’s portion will be delivered in the form of royalties, taxes, and a 16 per cent free carried interest in Acacia’s Tanzanian operations, in line with the country’s new mining law, Barrick noted in continuation of a line that is starkly different from that of the government. Prof Kabudi has proffered that Tanzania’s share will be received after all taxes, royalty and all other payments due are made.

The two parties have created a working group to resolve outstanding tax matters relating to Acacia’s operations even as the London-based firm says it will also push on with the arbitration case it has filed at the international court against Tanzania move to ban concentrate export.

“Barrick and the Government of Tanzania will now work to complete detailed documentation and final agreements for review and approval by Acacia. We expect this work to be completed in the first half of 2018. Barrick has engaged with independent directors of Acacia during this process, and will continue to do so,” Acacia said in the statement.


Tanzania: Dar Posts Biggest Coup in Mineral Wealth War

24th October 2017
By Standard Reporter

TANZANIA is on course to register the biggest coup in an economic war over its mineral resources after striking a deal with Barrick Gold Corp, to settle a tax and revenue sharing disputes over three gold mines in the country operated by its African subsidiary group, Acacia Mining.

After three months of painstaking negotiations, the Toronto-based company said it will pay the government 300 million US dollars (about 700bn/-) as part of the deal, give the government a 16 per cent stake in its mines, and will equally split “economic benefits” from the mining operations.

Barrick owns 63.9 per cent equity interest in Acacia Mining which is the country’s largest gold miner. As part of the agreement, Barrick Gold Corp said the government will participate in decisions related to operations, investment, planning, procurement, and marketing.

A working group has also been formed to resolve “outstanding tax claims” against Acacia. The government had slapped Acacia Mining with a 190 billion US dollars tax invoice last July for unpaid taxes for two decades of operation, penalties and interest.

“We have developed a framework for a modern, 21st century partnership that should ensure Acacia’s operations generate sustainable benefits and mutual prosperity for the people of Tanzania, as well as for the owners of Barrick and Acacia,” Barrick Chairman John Thornton said in a statement.

“The currency of trust is transparency. We are very excited about this partnership as it creates the potential to build a very compelling business inside Tanzania and in this party of Africa,” Prof Thornton said.

President John Magufuli said the deal enabled him to call Barrick Gold Corporation executives “brothers” because “they are here to stay” for benefit of both the investors and the Tanzanian government and its people. President Magufuli added that the framework agreement would serve as a model for other mining companies operating in the country.

In a rejoinder, Barrick Gold said on Friday that the proposed mining settlement it negotiated with Tanzania for its Acacia Mining unit was not under threat, even though Acacia said it could not immediately make a $300-million payment included in the deal.

Acacia’s Chief Financial Officer Andrew Wray was quoted as saying the gold mining company did not have the ability to make a $300 million payment to the Tanzanian government to resolve a tax dispute.

The gold miner said in a separate statement it was waiting for further clarification on the agreement. Shares in beleaguered gold miner Acacia surged as much as 30 per cent after announcement of the deal on Thursday.

The stock jumped to 255.50p after Canadian mining group Barrick – which owns 64 per cent of Acacia – unveiled a breakthrough in talks. However it pared back some of the gains to close at 212p amid some confusion about the details of the agreement. Tanzania is Africa’s largest gold producer after South Africa, Ghana and Mali.

The bullion dominate the country’s mining sector and exports but its contribution to the economy has remained low.

The mining sector is dominated by gold, whose export value was $1.4 billion in the year that ended in October 2016, contributes less than four per cent to the Tanzania’s gross domestic product (GDP).


Tanzania: Local Miners At Mirerani Want Part in the Negotiations

23rd October 2017
By Mussa Juma

Arusha — Manyara Miners Association (Marema) has seconded President John Magufuli directives to improve tanzanite extraction and business environment aiming to ensure the area where the gemstone is mined benefits more.

Marema chairman, Mr Sadiki Mnenei, told The Citizen during an exclusive interview on Monday, October 23, that the association also supports a decision to review provisions of the contracts and guidelines used in the gemstones extraction between a local investor, Tanzanite One, and the government.

“We hail President Magufuli for his efforts to ensure Tanzanians gets the maximum benefits from tanzanite extraction and business. Also, we commend Tanzanite One for being ready to negotiate with the government to improve tanzanite extraction and business climate,” he said.

Being important stakeholder, Mr Mnenei believe Marema had significant role to play during the negotiation.

“Having worked for a long time in the sector, we expect that our participation in the negotiation would help in reaching better agreement for the benefit of investors and the country,” he said.

Tanzanite One, through its secretary, Mr Kisaka Mnzava, expressed its readiness to corporate with the government to improve the climate of tanzanite extraction and business for the benefit of the country.

“First, it is because we recognise efforts taken by the government and President Magufuli. Also, we are obliged to take part in all processes that will benefit the country from abundant mineral resources available in the country,” noted Mr Mnzava.

President Magufuli ordered a committee under the minister for Constitution and Legal Affairs, Prof Palamagamba Kabudi to commence negotiation with Tanzanite extraction and business firms including reviewing terms and conditions of the contracts for the benefited of the country as it did in gold.

A total of 570 licenses have been issued for Tanzanite extraction, with 216 carrying operations and that 25 mines out of those operation were submitting annual production reports.

Tanzanite one is owned in partnership between Sky Associate Ltd and the State Mining Corporation (Stamico). The company owns 7.6 square kilometres out of the 25 kilometres subjected to Tanzanite extraction.


Tanzania: Economists Hail Govt Over ‘Beneficial Mining Pact’

21st October 2017

ECONOMISTS and analysts have commended the government for entering a beneficial mining deal with Barrick, expressing satisfaction on the competence of Tanzania’s negotiating team.

In separate interviews yesterday, economists and political scientists said the time has come for Tanzanians to begin enjoying from the mining sector. University of Dar es Salaam’s (UDSM) Department of Political Science lecturer Professor Benson Bana said the victory was for all Tanzanians as without wisdom the agreement would have not been reached.

“It’s a new page in Tanzania’s mining industry and our relationship with international mining companies,” he noted. On transfer of the offices, Prof Bana said people should not take it lightly as it will simplify communication and some decisions will be made quickly.

He said while others will not support the agreement but it was of greater importance to the nation. The Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) Kilimanjaro Region has hailed the negotiating team for reaching a resolution with Barick Gold to share profits accrued from the mine on a 50 50 ratio and grant the State a 16 per cent stake in its gold mines.

TCCIA Kilimanjaro Chief Executive Officer (CEO), Mr Boniface Mariki said that after a three-month negotiation, what has been achieved is huge, saying for the foreign company to agree to all proposals by the government parades exceptional negotiation skills among Tanzanians.

Mr Mariki said it is a blessing that President John Magufuli is the first one to come with the idea, seeking an end to foreigners making too much from natural resources bestowed upon Tanzania that should first and foremost benefit Tanzanians.

“To me, it is really a huge achievement because getting the funds they have decided to issue in good faith is really huge thing as well as agreeing to share profits by half. “I would say something is better than nothing and we have been able to negotiate and strike the deal, we are happy but the problem may be proved during implementation,” said Mr Mariki.

Mzumbe University Professor Honest Ngowi said the resolution was a step ahead if at the end of the day the payment is done and that should be taken to be good news for now.

He said that much as the negotiating team managed to strike a deal to have a ’50-50′ share in the profit, while the Tanzania government would be owning 16 per cent of shares is a good move and a ‘win’ to Tanzanians, it is a strange negotiations so much that economics books might have to be rewritten.

He said on the implementation part, it could be challenging as many extractive issues are shrouded in secrecy, there are operational costs, transfer pricing and other things to be added before a profit is declared.

Emmanuel Rweyikiza, an economist based in Mwanza said that in the perspective of financial issue one can see the proceeds were normal but in the perspective of economy Tanzania has reaped hugely.

“Tanzania is the first country to get a 16 per cent among 18 countries dealing with mining operations, most of them range between 10 to 15 of shares,” said Mr Rweyikiza.