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Mineral Wealth lot Still Remains Untapped; Poised to become World Producer of Uranium

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by nngu007, Sep 26, 2011.

  1. nngu007

    nngu007 JF-Expert Member

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    Daily News (Dar es Salaam)
    Sebastian Mrindoko
    20 September 2011

    ALTHOUGH Tanzania boasts having huge mineral reserves, most of them are still untapped, the declining activities has posed mixed feelings and queries over the sector's contribution to economic development.

    According to the National Bureau of Statistics (NBS), mining and quarrying activities recorded a growth rate of 5.8 per cent in the second quarter of 2011 compared to 20.5 per cent in the similar period last year.

    The growth rate was due to slight increase in Gold, Diamond and Tanzanite production for the second quarter of the year 2011, stated the report.
    The Bank of Tanzania (BoT) Economic Bulletin for the Quarter ending June 2011 also reported the declining production of gold and diamonds during the quarter ending June 2011.

    The Bank's report confirms also the increased value of both gold and diamonds due to rising world market prices, which according to experts could have pushed up production of the highly demanded metal and gemstones.

    Mineral exports declined due to fall in value of gold exports, which were to the tune of 478.3 US dollars compared with 493.6 US dollars realized in the quarter ending March, 2011.

    Apart from Gold, Diamond and Tanzanite, Tanzania is poised to become one of the largest producers of uranium in the world which could bring hefty foreign earnings. Records show that Tanzania has become one of the fastest emerging gold producers in Africa, and is now the fourth largest gold producing country after South Africa and Ghana.

    For example, as in July, the sharp rise in gold prices had more to do with the speculation around the recovery of the US Economy, the ongoing debt crisis in Europe and fall in the US Stock markets. Market prices for gold experienced during August this year nearly reached 1,900 US dollars per ounce.

    Also the uncertainty in the financial markets inclined during the month as more traders pulled their funds from the stocks and invested in gold, silver and US Treasury bills.

    "Most mining investors are market oriented basing on the high returns which could be accrued at the given period of time," said Mr Morrice Oyuke, NBS Director of Economic Statistics in an interview in Dar es Salaam on Wednesday.

    The mining firms, he said, play with the market shocks and increase production basing on the forces of demand and supply determined greatly by prices in the world market. Owing to that, Mr Oyuke said royalties and other duties payable to the government would affect tax collection targets.

    However, the BoT has allayed fears over slim revenue collected during the 2011 first and second quarters due to decline of mining activities.

    The BoT Director of Economic Research and Policy, Dr Joe Massawe, said, "Production has always remained the same and at times surpassed the targeted outputs due to increased demand in the world market but most mining firms were at full capacity," said Dr Massawe.

    He said the sector's contribution to the economy is increasing when taken in its totality due to the engagement of most mining firms in various corporate social responsibilities in society.

    The Tanzania Revenue Authority (TRA) Director for Taxpayer Services and Education, Mr Protas Mmanda, said it is too early to comment as the assessment on the revenue collection from the mining firms are yet to be conducted. "We are yet to evaluate revenue collections from the mining companies," said Mr Mmanda."Mining activities are becoming significant to the whole economy as such firms go out and invest in various social projects geared at improving living standards," he added.

    The Public Relations and Communication Manager with African Barrick Gold, Mr Teweli Teweli, whose company owns four out of six major gold mines in the country said production targets for this year had been met with plans to even increasing the level.

    "We have met production targets set by the company in a specified period," observed Mr Teweli.