[Documents menu] Documents menu

Dar's Own Goldenberg?

Editorial, The East African (Nairobi), 30 July 2001

As a row over mining and minerals rages in Tanzania, two schools of thought have emerged over whether the industry is beneficial to the country.

The first holds that the information which the mining companies provide to the government is correct and ought to be believed. But there are also those who are close to the mining companies and who claim that the companies submit false reports.

On several occasions, Members of Parliament have cast doubt on the figures issued by the mining firms and accused the government of mot exercising proper vigilance over mineral production.

It could be that the government does not have enough trained manpower to do so, but again it might be the general laxity pervading its departments.

Last week, the MPs told the Minister for Energy and Minerals, Mr Edgar Maokola-Majogo, that people who had been evicted in various areas to make way for the mining companies should benefit from the proceeds of the minerals by getting a part of the royalties.

However, if the royalty figures issued by one of Tanzania's biggest gold mining company, Kahama Mining Corporation Ltd, is anything to go by, such people would earn next to nothing. The firm's fact sheet shows that it expects to pay Tsh11.7 million ($13,145) in royalties and taxes after nine months of production, while its average income per year is $94 million.

The government does not seem to know how much gold mining companies have extracted from Tanzania since 1994, when the Bank of Tanzania stopped buying raw gold. The Tanzania Revenue Authority has been unable to assess the tax.

The gold smelters are said to be out of bounds for Tanzanian mining experts, including those on the firms' payrolls, raising doubts about the authenticity of the gold output figures.

Even Mr Maokola-Majogo recently asked the mining companies to treat their staff equally. There has been a tendency to pay foreigners far better salaries than locals of similar qualifications. This bias has prompted some Tanzanian mining engineers to quit their jobs.

Besides gold, Tanzania also mines tanzanite, rubies, emeralds, sapphire, diamond, silver, cobalt, coal, iron and uranium.

Most of the large mining companies have built their own airstrips and government supervision over what they fly out is minimal. It beggsrs reason why Tanzania, with such a large quantity of mineral resources, remains one of the poorest countries in the world.

Such natural resources could uplift their living standards of the nation and stop the government from running around, begging bowl in hand, seeking donor funds to import foods and carry out development projects.