REVEALED... Report to expose massive looting of mineral wealth

11Jun 2017
The Guardian Reporter
Dar es salaam
Guardian On Sunday
REVEALED... Report to expose massive looting of mineral wealth

A SECOND presidential committee is expected to drop a “major bombshell” on large-scale looting of the country's mineral resources in a much-anticipated report scheduled to be presented to President John Magufuli tomorrow, it has been revealed.

Well-placed sources said report of a probe committee chaired by Nehemiah Osoro, an economics professor at the University of Dar es Salaam (UDSM), will further highlight how Tanzania has been "ripped off" by multinational companies from the exports of gold and other precious metals from the country over the past two decades.

"President ... Magufuli will receive report of the second committee, whose members included economists and legal experts, that investigated the mineral contents of shipping containers of gold and copper concentrates," the President's Office said in a terse statement yesterday.

"This event will be broadcast live by various media outlets, including radio, television, social media platforms and the official State House website - www.ikulu.go.tz."

President Magufuli's economic advisor, Prof Longinus Kyaruzi Rutasitara, was also a member of the second presidential committee that investigated the mining sector for 63 days before coming up with their new report.

Other members of the committee are Dr Oswald Joseph Mashindano, Casmir Sumba Kyuki, Andrew Wilson Massawe, Gabriel Pascal Malata, Usaje Bernard Usubisye and Butamo Kasuka Philip.

"The second committee will confirm the findings of the first committee chaired by chief executive officer of the Geological Survey of Tanzania (GST) Prof Abdulkarim Mruma, which suggested that mining companies are grossly under-declaring their mineral exports," an official close to the government told The Guardian on Sunday.

"Like the Mruma committee, the Osoro committee has also uncovered unbelievable levels of looting and loss of government revenues from the mis-invoicing and profit shifting practices of multinational companies in the mining sector."

Findings of the scathing report of the first committee prompted President Magufuli to sack Minister for Energy and Minerals Prof Sospeter Muhongo and chief executive of the state-run Tanzania Mineral Audit Agency (TMAA) for their alleged failure to properly monitor gold and copper concentrates.

The Mruma committee said it had found 10 times more gold in Acacia Mining Plc's export-bound containers than the company had actually declared, as well as several other undeclared precious minerals.

Acacia Mining has hit back at the Tanzanian government, describing the state's audit of the company's gold and copper concentrates as inaccurate, saying it would consider its options in the country.

The Osoro committee examined historical exports of precious metal concentrates from Tanzania over the past 20 years.

Members of the second committee were sworn in by Magufuli on April 11, this year, where the president ordered the team of economists and lawyers to get to the bottom of allegations of tax evasion in the gold mining industry.

The president ordered the committee to establish the types of minerals contained in the gold and copper concentrates, their value, content and weight.

Magufuli also tasked the team with finding out exactly how many containers of gold and copper concentrates had been exported from Tanzania since 1998.

“Go and find out how many containers were exported since 1998 ... establish how many tonnes of gold, copper and silver were exported. How many containers are exported per month? What is the value of those minerals and how much did the government get in taxes?" President Magufuli said in April in his marching orders to members of the Osoro committee.

Magufuli also instructed legal experts in the presidential committee to review the country's laws and establish if the relevant laws were being enforced.

The president has insisted that it was high time for mineral-rich Tanzania to start benefitting from its vast natural resource wealth.

Numis Corporation Plc, United Kingdom-based independent institutional stockbrokers and corporate advisors, said yesterday that in order to resolve its dispute over gold-copper concentrate exports, Acacia Mining may have to pay a "potentially large" cash sum to the Tanzanian government.

After a conference call with the management, Numis said it appeared likely that report of the second committee set up by Magufuli, which is looking at historical, economic and legal issues of concentrate exports, "will draw a similarly negative conclusion to the first report on the content of the concentrates".

The broker believes the Tanzanian government was likely to demand a "potentially large cash sum," and this could result in further short-term share price volatility for Acacia Mining.

Acacia's and Barrick's managements have chosen to remain in dialogue with the government, but said they may be forced to temporarily shut down the Bulyanhulu Gold Mine and shed over 1,000 jobs if the export ban on mineral sand remains in place.

Acacia chief executive officer Brad Gordon said it would cost $30 million (Shs 67 billion) to shut down Bulyanhulu and $2-3 million a month as care and maintenance charges.

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