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Critics Against Foreign Miners Baseless, Says Mkapa

By Giviniwa Paul, TOMRIC News Agency (Dar es Salaam), 20 July 2001

Dar Es Salaam - President Benjamin William Mkapa has said the new ultra-modern mines coming up in Tanzania have proven that his country was on the right track and has rejected views and proposals that the country should exploit it on its own.

He made his statement on Wednesday in north central Tanzania when opening the Canadian owned Bulyanhulu Gold Mine. As for those who hesitate, thinking that it was better to leave gold undisturbed underground until when Tanzania acquires the capital and technology to exploit on its own, they are likely to be wrong, he said.

We have two choices. Either we adopt and adapt, or we perish. If were are not careful we could take the path of the dinosaurs, never knowing the time to adapt, until when its too late, he said.

He said for the mining sector, Tanzania has made the correct turn, hence opening Bulyanhulu mine, the third large-scale mine in the country for the last four years. It is the largest underground mine ever constructed in the country.

Explaining further, Mkapa said catching up the present and future knowledge societies meant acquiring and applying new technology, new management styles, new ways of marketing and trading.

Opened on Wednesday and owned by Kahama Mining Corporation Limited (KMCL), the gold mine is located about 50 kilometers South of Lake Victoria in north central Tanzania. The gold mine described as one of the largest gold mines in the world.

It is said to have gold serve base of 14.6 million ounces and investor says they could increase production to at least 500,000 ounces a year from an initial 400,000 ounces, making Tanzania third largest gold producer in Africa. The operation cost is expected to average US$130 per ounce. The company says it has invested Tshs5.7 billion in training of staffs putting 900 people in their payroll, so far.

The launch of the mine has drawn attention to various stakeholders including the Lawyers Environmental Action Team LEAT on whether local residents would benefit from the mine. They also want a question of residents who were removed at the mine is addressed promptly. In their letter to the President, the lawyers wanted him to consider side effect the project, with emphasis to local residents.

LEAT had two days before the launch asked President Mkapa to form a team to probe the allegations that some miners who rejected a government order to move out the area were buried in the mines. In their letter to the President a copy of which was made available to the local media, LEAT said the government should form an independent team to investigate circumstances in 1996 before the miners were evicted at the mines.

They say the miners were forced to move out of the area despite a court order, which restrained the government from effecting the decision. The High Court in Tabora central Tanzania granted an injunction, which ordered the Kahama Mining Corporation, the government or any other agent to refrain from evicting small-scale miners at the mines.

They say the government rejected the call to form a probe team in 1996 after the then Shinyanga Regional Commissioner, Major Gen (ret) Tumaniel Kiwelu, refuted the death reports. The lawyers also call for a review of the agreement between the government and the Barrick Gold Corporation which owns KMCL saying government revenue from the investment were peanuts compared with what the investors reap.

In the agreement made before the Barrick Gold Corporation acquired the mines in 1999, the government gets 5 million US dollars annually for 15 years while the owners will reap 3 billion US dollars, LEAT claims. The bone of contention is the fact that the deal was sealed when gold resource base at Bulyanhulu was established at 3.6 million ounces. KMCL says it has now established the reserves have tripled to 10 million ounces, the lawyers claim.

The lawyers allege that KMCL deliberately put the reserves at 3.6 million ounces to lower its value and the government blindly fell for it. According to LEAT, the fact that Tanzania is becoming Africa's largest gold producing country does not reflect properly on how the wealth will benefit the nation. They plead with the government to press Barrick Gold Corporation to make the compensation saying the new investors were financially capable and morally responsible to make the payments.

LEAT claims further that the Barrick Gold Corporation did not tell the government the truth about the gold resource in the area during the signing of the agreement to acquire the mines. Bulyanhulu gold mine was discovered in 1974 and after undergoing into several developments, in May 1999, the Barrick Gold Corporation acquired 100 percent of shares of Sutton Resources. The later had obtained a prospecting License in 1994. In September 1999, KMCL was awarded the mining license for Bulyanhulu and started underground development thereafter. KMCL entered into full production in April this year.