Tanzania finally allows export of mineral concentrates

In Summary

• The 277 containers of concentrates had been withheld at Dar es Salaam Port for three years as the government and Barrick Gold wrangled over taxes.
• This comes almost four months after Tanzania and Barrick Gold ended a long-running tax dispute after signing an agreement under which the government will have a stake in three gold mines operated by the firm

Dar es Salaam. The government has issued an export permit for all the 277 containers full of gold and copper concentrates which had been held in Dar es Salaam since 2017.

The mineral concentrates had been stored at the Dar es Salaam seaport and Inland Container Depot (ICD) pending negotiations between the government and the Canada-based Barrick Gold Corp.

The release comes almost four months after Tanzania and Barrick Gold signed a deal in which the government would take stakes in the latter’s three gold mines in the country to end a long running tax dispute.

The deal  signed in January, 2020 by Barrick CEO Mark Bristow and Minerals minister Doto Biteko in Dar es Salaam followed an announcement by the two sides in October 2019 in which they agreed to a payment by Barrick Gold of $300 million to settle outstanding tax and other disputes, lifting of the export ban on concentrates and the sharing of future economic benefits from the Barrick Gold mines.

The two parties also formed a new joint venture, Twiga Minerals Corporation (‘Twiga Minerals’).

The permanent secretary in the Minerals ministry, Prof Simon Msanjila, told The Citizen’s sister paper Mwananchi recently that the export permit was issued to Twiga Minerals after the government received all the taxes due from Barrick Gold totaling Sh21.1 billion.

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The amount was part of the Sh58.9 billion collected by the Tanzania Minerals Commission (TMC) in April 2020.

During the first three weeks of May 2020, TMC has garnered Sh44.7 billion as mineral proceeds.

“In short, an export permit has been issued. All taxes had been paid by April. A decision on when to export the concentrates remains purely with the company (Twiga) itself,” he said. Barrick Gold’s resident manager, Mr Hilaire Diarra, wasn’t in a position to give details on the matter.

At least 55,000 tonnes of the mineral concentrates produced by Buzwagi and Bulyanhulu Gold Mines under the then Acacia Mining Company had been exported for lack of a processing capacity in the country.

However, President John Magufuli prohibited exportation of the 277 containers of the concentrates and the probe committee he formed to look into the matter came up with a list of minerals worth Sh829.4 billion contrary to earlier figures by Acacia Mining.

For instance, the committee unveiled that the containers had an average of 7.8 tonnes of gold worth Sh676 billion, contrary to the 1.1 tonnes valuing at Sh97.5 billion provided by the Tanzania Minerals Audit Agency (TMAA).

The National Union of Mine and Energy Workers of Tanzania (Numet) secretary general, Mr Nicomedes Kajungu, said the concentrates exportation benefit will be seen if the generated revenue will be the product of actual standards provided by Prof Abdulkarim Mruma’s probe committee.

“If there is no difference, then the exportation is meaningless.However, I commend the government for its initiatives to construct a minerals processing plant in the country because apart from creating jobs - it will improve the country’s economy,” he said.

According to TMC, revenues generated in mining include royalty, inspection fees, licence lease fees, penalties and geological services levy.

The commission had collected Sh44.7 billion as of May 22 this year  and that Sh58.9 billion was taxes collected on the copper concentrates.The amount collected in March 2020 amounted to Sh39.6 billion while in February Sh34.6 billion was collected.