Fight on behalf of Tanzanians, President Magufuli tells mineral investigators

The mistrust has been brewing for years, and now with the ban on the export of gold and copper ore, it may have reached its boiling point -- or just taken a fresh twist.

In many ways, the current stalemate between the government on one hand, and large-scale mining investors on the other, reveals a complicated and delicate partnership.

Trust in mining giants has, apparently, been declining among many Tanzanians in general -- and within government circles.

And last November, President John Magufuli let it out when he announced plans to further tighten controls on the mining sector to ensure that the country maximises the benefits from its wealth of natural resources.

“Tanzania has a lot of minerals, but there have been a lot of funny deals ... we have to look carefully at our laws so that we move forward as a country,” he told a news conference at State House.

By that time, he had already issued his first ban on the export of gold and copper concentrates -- in a fresh bid to control losses in potential revenue from the resources. But many have described the decision as a revelation of mistrust in the mining investors.

The President reiterated that ban a few weeks ago, and the Energy and Minerals ministry has since stopped mining firms from sending copper concentrate or mineral sand for processing abroad.

Investors have been told to construct a smelting plant in the country. But they say it is not viable.

Since the ban was instituted, the authorities are holding over 280 copper concentrate containers belonging to Acacia Mining, which claims to have been losing over Sh2 billion per day as a result.

Small-scale miners have also been caught in between with 60 containers held.

Mining firms insist that their hands are clean, and have been transparent on the issue of gold and copper concentrate.

Yet as he swore in members of the team of experts he formed on Wednesday to investigate the amount of minerals contained in copper concentrate still held in containers all over the country, President Magufuli suggested he wouldn’t take anyone’s word for truth, saying there was too much at stake to not dig deeper.

“The world is currently fighting an economic war, as such I urge you go and fight this war on behalf of Tanzanians, go get all the facts and do not let yourselves be moved by anyone,” he told the team at State House.

He added: Use the expertise in you, your discretion, your patriotism and your love for the nation, you do this for needy Tanzanians, the poor.”

The President noted that he had carefully picked a team of experts in geology, chemicals and scientific analysis to represent the over 50 million Tanzanians who want to know the truth about their natural resources.

It was an emotional appeal, and one that was testimony to the complexity of the matter.

Chaired by Prof Abdulkarim Mruma, the team has 20 working days to submit a report to the Head of State.

At the same event, Dr Magufuli hinted that he would follow through the pledge he made last November to do away with “funny deals” in mining, by forming another team of legal experts to scrutinise the country’s mining policy.

It’s not yet clear how soon a compromise can be made this time round.

But if anything, the current stand-off vindicates findings of a special committee formed by President Kikwete in 2008 to probe the industry.

The Bomani Committee was given the task to review the mining sector, including the export of gold and copper concentrate.

It was also to investigate the general framework governing the entire sector.

“...mining, refinery, smelting and trading of minerals are complex to understand. Most countries with minerals continue to strengthen this sector so as to benefit in the future,” notes the committee in its conclusion. “The interference of duties in this sector normally creates misunderstanding from the country with resources with experienced companies’ capital and owns mineral markets.”

According the committee report, the government has severally expressed disappointment in the mining industry for its small contribution to economic development.

That frustration has seen the formation of several committees over the years to review mining laws and policies. Some of the most notable probe teams are the Dr Kipokola’s committee of 2004 and Masha’s committee of 2006.

Interestly, investors somehow feel shortchanged -- or perhaps that they are subjected to too much pressure to deliver when the situation on the ground isn’t that conducive.

With the Bomani committee, they decried poor infrastructure and security services, and called for a change in the mining sector monitoring system.

They also wanted an improvement in the tax supervision system.

“Apart from there being different views and opinions, all stakeholders have suggested that all processes and policies used in the mining sector need to be reformed and improved so the foresaid sector can meet the expectations of the nation,” the committee noted.

And to resolve all future misunderstandings in the sector, the team recommended that an independent mining authority be formed and given the mandate to develop the sector.

“That authority (should) be empowered with specialists in the mining sector and with access to adequate finance.”

The committee suggested that the authority should have its own budget, with proposals that 20 per cent of mineral royalty be injected into the authority.

“While some of the recommendations were factored in the mining policy of 2009 and minerals Act of 2010, this one crucial recommendation was left out,” said Mr Zitto Kabwe, Kigoma Urban MP (ACT-Wazalendo) and a former member of Bomani Committee.