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Dar to form its own gold mining audit department
By JOSEPH MWAMUNYANGE
Special Correspondent
THE EAST AFRICAN
Auditing of gold mining companies in Tanzania will now be undertaken by a separate new department.
Minister for Energy and Minerals Nazir Karamagi told The EastAfrican last week that the department, to be charged with auditing all gold mining in the country, will operate for two years before the government transforms it into an agency.
Mr Karamagi said the department will also deal with capital investments in the mining industry and oversee environmental preservation.
It is a section within my ministry under the Commissioner for Minerals that will become a department, he said.
According to the minister, there are procedures that need to be followed before this is done.
It wont take less than two years before we create the agency; after a Bill is prepared and presented to parliament for endorsement, it takes time for it to become law.
Auditing of gold mining has in the past few years been undertaken by an American company, Alex Stewart Business Government Corporation, whose contract ended early this year.
The appointment of Alex Stewart came amid allegations that the country was losing colossal sums of money from gold mining activities.
Up to now, the auditors report has not been officially made public, even though the government has promised to make such findings public once the audit is complete.
However, reliable information suggests that Alex Stewart earned $50 million during the four years and two months it carried out the audit. The company was paid $1 million every month from June 2003 to August this year.
This amount was seen by some, including Members of Parliament, as being too much compared with what the government earns from the three per cent royalty fee it is paid by big mining companies.
The amount paid to Alex Stewart (Assayers) meant that the government had been paying the firm 1.5 per cent of the total value of gold exports annually.
Among the big mining companies that were audited during the four-year period were Golden Pride, Bulyanhulu (Barrick), Geita Gold Mine (AnglogoldAshanti) and North Mara.
Tanzanias mining sector has registered steady growth, clocking 15.7 per cent in 2005 compared with 15.4 per cent the previous year. The contribution of the sector to GDP increased to 3.5 per cent compared with 3.2 per cent in 2004. The increase is attributed to commencement of gold production in Tulawaka Mines and continued implementation of the Minerals Policy of 1997.
According to The Economic Survey 2005, the value of mineral exports in 2005 was $711.3 million compared with $680.2 million in 2004, an increase of 4.6 per cent. This figure is expected to increase further when the survey for 2006 is compiled. The report for 2006 puts the figure for mineral exports at around $735 million.
Production appears likely to rise further after the government gave a positive environmental impact assessment for a new gold mine, Buzwagi, which is fully owned by Barrick Gold Corporation.
Buzwagi is expected to produce 250,000 ounces of gold annually at a cost of $280 per ounce over an estimated 10-year mining period. However, the Buzwagi gold project has sparked debate in the country, with the opposition crying foul over the signing of the contract for the mine at a London hotel.
The government said there was nothing sinister in the signing of the contract with Barrick Gold Corporation, one of the worlds largest gold mining companies.
By JOSEPH MWAMUNYANGE
Special Correspondent
THE EAST AFRICAN
Auditing of gold mining companies in Tanzania will now be undertaken by a separate new department.
Minister for Energy and Minerals Nazir Karamagi told The EastAfrican last week that the department, to be charged with auditing all gold mining in the country, will operate for two years before the government transforms it into an agency.
Mr Karamagi said the department will also deal with capital investments in the mining industry and oversee environmental preservation.
It is a section within my ministry under the Commissioner for Minerals that will become a department, he said.
According to the minister, there are procedures that need to be followed before this is done.
It wont take less than two years before we create the agency; after a Bill is prepared and presented to parliament for endorsement, it takes time for it to become law.
Auditing of gold mining has in the past few years been undertaken by an American company, Alex Stewart Business Government Corporation, whose contract ended early this year.
The appointment of Alex Stewart came amid allegations that the country was losing colossal sums of money from gold mining activities.
Up to now, the auditors report has not been officially made public, even though the government has promised to make such findings public once the audit is complete.
However, reliable information suggests that Alex Stewart earned $50 million during the four years and two months it carried out the audit. The company was paid $1 million every month from June 2003 to August this year.
This amount was seen by some, including Members of Parliament, as being too much compared with what the government earns from the three per cent royalty fee it is paid by big mining companies.
The amount paid to Alex Stewart (Assayers) meant that the government had been paying the firm 1.5 per cent of the total value of gold exports annually.
Among the big mining companies that were audited during the four-year period were Golden Pride, Bulyanhulu (Barrick), Geita Gold Mine (AnglogoldAshanti) and North Mara.
Tanzanias mining sector has registered steady growth, clocking 15.7 per cent in 2005 compared with 15.4 per cent the previous year. The contribution of the sector to GDP increased to 3.5 per cent compared with 3.2 per cent in 2004. The increase is attributed to commencement of gold production in Tulawaka Mines and continued implementation of the Minerals Policy of 1997.
According to The Economic Survey 2005, the value of mineral exports in 2005 was $711.3 million compared with $680.2 million in 2004, an increase of 4.6 per cent. This figure is expected to increase further when the survey for 2006 is compiled. The report for 2006 puts the figure for mineral exports at around $735 million.
Production appears likely to rise further after the government gave a positive environmental impact assessment for a new gold mine, Buzwagi, which is fully owned by Barrick Gold Corporation.
Buzwagi is expected to produce 250,000 ounces of gold annually at a cost of $280 per ounce over an estimated 10-year mining period. However, the Buzwagi gold project has sparked debate in the country, with the opposition crying foul over the signing of the contract for the mine at a London hotel.
The government said there was nothing sinister in the signing of the contract with Barrick Gold Corporation, one of the worlds largest gold mining companies.
