Gold refinery to open in October

21Aug 2019
Polycarp Machira
The Guardian
Gold refinery to open in October

TANZANIA is set to export fully refined gold in two months time upon completion of the first gold refinery plant now under construction in Dodoma city.

Minister for Minerals, Doto Biteko.

Currently, gold in the country is refined to 70 or up to 85 percent but with the coming of refineries, one in Dodoma and another in the Lake zone, the industrial mineral will now be refined up to 99.9 percent.

The Minister for Minerals, Doto Biteko who toured the prospective plant yesterday said that once operations begin, the country will be able to establish a national gold reserve as called for in the Mining Act.

The reserve will also enable the Bank of Tanzania (BoT) to purchase and store gold following President John Magufuli’s directive mid-2017.

“The time has come for Tanzanians to start selling refined gold once the plants start operating and when the other plant in the Lake Zone start too,” he said, noting that history will be written and in the future, the country will have lots of gold in reserve just like some developed countries.

At the plant, he was briefed that the construction of the refinery has reached 70 percent and that the remaining work will be completed by October at the latest.

Once the refinery starts work, the government’s six percent royalty in gold will be charged in different forms whereby two thirds of the six percent will be in monetary form and the other third in gold, which will later be refined and taken to the reserve.

Ferenc Molnar, the managing director for Eyes Of Afria Limited, the company installing the plant, said while briefing the minister that the work is scheduled to end late September.

From the start, the plant will be able to process at least 30 kilograms per day but this will increase to one tonne  per day by late next year

“There is a lot of gold in Tanzania and the plant will help refine most of it and we are prepared for the challenge ahead,” he said, noting that his work from April this year when the company was issued with   a licence to build the plant and refine gold, is a clear indication that the company is on the right track.

Dodoma Regional Commissioner (RC) Benilith Mahenge said at the event that the refinery will help create employment for residents and also bring technology among stakeholders in the sector.

“I thank the government, especially the president for this bold step aimed at improving the minerals sector,” he said.

In July, the government said it had awarded licenses for the construction of a minerals smelter and two gold refineries to Chinese firms, in efforts to generate more revenues from the mining industry.

Biteko said the Chinese companies would also soon be awarded licenses for mines, each of which would require investment worth more than $100 million.

He did not name the firms or give details about the mining or other projects, an interesting decision as Tanzania is Africa's fourth-biggest gold producer after South Africa, Ghana and Mali.

The government banned the export of mineral sand in March 2017, a concentrate that contains silver, copper, gold and other minerals hitherto unaccounted for, a key aspect in a $190 billion tax dispute with Acacia Mining, the major gold producer locally.

The government invited bids from mining firms to build smelters and refineries, although the Tanzania Chamber of Mines has said such projects would not be economical.

Biteko said 37 Chinese companies had expressed interest.

"After carefully assessing the financial capability and history of those companies, we have issued licenses for the construction of two gold refineries and a smelter," he said.

"We will also soon award special mining licenses to two companies to build large-scale mines whose individual investment is above $100 million," he stated.

The minister was speaking in a State House during which a Kenyan government delegation handed back 35kg of gold and a pile of currencies it intercepted after the valuables were smuggled out of Tanzania.

The government has set up 28 mineral trading centers since March to ensure that gemstones are sold locally and proper revenue is collected especially from small-scale miners.

Gold worth a total of 136.7 billion/- has been traded through the new auction centers since March and the government has collected 7.7 billion shillings royalty and clearance fees.