Our Mining Industry will eventually cross the Rubicon


SOMETIMES back, precisely September 2012, in one of my columns I discussed on the plight of our mine industry with regards to the popular phraseology of win win situation!

I cited two examples of Namibia and Botswana that have always been on top of Africa’s competitive indexes, be it in good governance, anti-graft policies, sound management of their economies and others.

However my submission was based on a relatively late discovery of diamonds in Botswana that had shot up the country to be one of the leading countries in quality diamond production in the world.

So as Namibia, whose economy hinges on mine industry providing 43 per cent of its export contributing 20 per cent of the country’s Gross domestic Product (GDP) Botswana was once rated as one of the poorest countries in the world, thanks to its abundant mineral wealth discovered as late as 1967 and has now defied the poverty status of Botswana people.

Africa is endowed with abundance of natural resources to the envy of the foreign investors. It is the home of 30 per cent of the worlds’ minerals yet is in the receiving end as the bargaining and negotiations powers are always in favour of those foreign investors.

I once came across a document “The 2009/10 Mid-Year up date, Survey of Mining Companies” in the world authored by an internationally known Fraser Canadian Institute. The survey looked into exploration and development of minerals in different countries.

It reported negatively on Tanzania that Tanzania had changed from a country encouraging foreign mining investment to one which actively discourages new investments, constantly harassing resident foreign miners and keeps changing the laws and regulations or abusing the operation of the current laws and regulations to the detriment of foreign miners and benefit of the government That was the time when companies like Aureus Limited of Nyaruguso and Nyakato were alleged to have given false information on gold extraction from 2006 to 2010 that denied our country more than 10billion/= on taxes for five years.

What will they say now? For both Namibia and Botswana, it is a win win situation for them. Comparatively, Tanzania is a giant with abundance of minerals and gas yet to be fully exploited.

The booming mining industry supposed to be the main driver of the Tanzania economy has always raised eyebrows to both the investors and the government when it comes to the real beneficiary of this industry.

Indeed this came to the open when President Magufuli decided to take the bull by the horns following his initiated investigation on Acacia’s containers with copper concentrates conducted by Professor Abdulkarim Mruma’s committee.

The investigations found out that 277 containers held as much as 15.5 metric tons of gold, instead of the 1.1 tons that had been declared and that sounded clear cheating and lavishly under declaring the contents of the containers prompting the President to disband the Tanzania Minerals Audit Agency’s board, dismissed its chief executive officer and asked the authorities to investigate those responsible.

Yes, we have been swindled a great deal; we have been exploited a great deal and worse of it even our own people we trusted worked in cohort with our swindlers at the expense of our poor people.

We have to turnaround our mining industry not to allow this exploitation by foreign only investors to continue unabated. We have only won the battle but we are yet to win the war.

We should not get scared with names of Barrick negotiation team which will shortly be in the country to settle this dispute. It appears to be the David and Goliath fight yet as long as there is strong evidence of cheating in declaring the contents of those containers regardless of the faulty contract, we will cross the Rubicon.

If proven there is cheating with disproportional amount of production, Acacia risks the possibility of being bankrupted. Studies for Africa and its Geopolitics seem to keep Africa on a competitive spree as a prey for foreign investors.

This is confirmed by Acacia Chief Executive, Brand Gordon who says, “The industry can be its own worst enemy when it sits down and agrees to those terms. And this is the case now.”

Gordon confirms that “These early arrangements, while perfectly legal were not equitable.” Africa is now waking up. Similar case in Nigeria where Representatives of a subsidiary of Shell, Anglo-Dutch oil major, appeared recently before a court in Lagos; the government says the firm owes $407m for undeclared oil exports.

Two years ago Muhammadu Buhari won the presidency on promises to clean up corruption. Yet his administration hasn’t convicted a senior politician or official.

The previous president’s national security adviser is on trial, charged with embezzling money meant for the fight against Boko Haram, a nasty jihadist group, and a former petroleum minister faces money-laundering charges in a British court.

It is easy to imagine the government’s focus on foreign oil companies as mere diversion. It plans to recover as much as $12bn from oil companies: the difference, officials say, between import and export records.

Shell denies wrongdoing—but with the government facing a gaping deficit, other oil companies should expect to find themselves alongside Shell in court.

The bottom-line is that our mining industries should be managed to the best interest of the country and improve the socio-economic, industrial and technological advancement including the possibility of enticing technological advancement and get invaluable assets abroad on those high-tech and innovative industries.

Equally important, the government should deliberately carry a comprehensive and coherent programme of grooming locally-owned Tanzanian companies and grow them up to professionals in the mineral’s fields and management levels in the spirit of Vision 2025.

At one time Namibia’s former President Sam Nujoma confided on me saying that why shouldn’t former Frontline countries work out a model of PPP to extract our minerals rather than giving a leeway to our former colonisers to continue exploiting our natural resources? That’s good food for thought.

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