Dubious gold deals still under corruption probe: Nobody let off the hook

[BAK]

Dubious gold deals still under corruption probe: Nobody let off the hook, PMO report confirms

THISDAY REPORTER
Dar es Salaam​

QUESTIONS still linger over a number of dubious, gold-related deals between the Government and various private companies, months after the reported launch of official investigations into the transactions, it has been established.

Government officials have now confirmed that formal investigations are indeed underway into some of the more questionable Government-private sector contracts involving the precious metal.

Major deals under probe include that involving the Dar es Salaam-based Mwananchi Gold Company, the Buzwagi contract with Canada’s Barrick Gold Corp., and the Meremeta/TANGOLD scandal, all of which are cited in a recently-released report of unfinished Government investigative business compiled by the Prime Minister’s Office (PMO).

The actual investigative work is understood to be the responsibility of the state-run Prevention and Combating of Corruption Bureau (PCCB), whose director general Edward Hoseah was this week spotted in attendance as the ongoing National Assembly session continued in Dodoma.

The Government’s anti-corruption watchdog is also credited with being behind the investigation of the controversial gold auditing agreement between the Government and the Alex Stewart (Assayers) company, which has so far resulted in the indictments of at least three former top public officials.

Criminal charges have been filed against former senior Government ministers Basil Mramba and Daniel Yona, along with ex-Treasury permanent secretary Gray Mgonja, in connection with the Alex Stewart affair.

Meanwhile, well-placed sources have told THISDAY that good progress has also been made in the investigation of suspected corruption surrounding the 2007 Buzwagi gold deal, which was signed at a time when President Jakaya Kikwete had ordered that all such pending deals be put on hold to await the outcome of a Government review of existing contracts related to the country’s mining sector

The then minister responsible for energy and minerals, Nazir Karamagi, came under heavy parliamentary fire for going ahead with the signing of the long-term contractual obligation with Barrick Gold in highly-dubious circumstances.

Mining sector observers say the contract gives the developer of the project, Pangea Minerals Limited (a subsidiary of Barrick Gold), extraordinary leeway in areas of taxation and contributions to national and local government development.

On the other hand, the same agreement legally binds the Government to maintain the same taxes and fiscal laws applicable to the company today, for the entire duration of the mine, which is a minimum of the next 25 years.

Though the investigation is reportedly still ongoing, it has been business as usual for Barrick Gold as it proceeds with its development of the Buzwagi mine project in Shinyanga Region. The mine is scheduled to begin gold production this year.

Regarding the Mwananchi Gold Company deal, the Bank of Tanzania (BoT) recently announced its decision to pull out.

The privately-owned gold refinery project has already been heavily bank-rolled by the central bank, but has failed to become an economic success.

It is also understood that long-running investigations into the intertwined Meremeta and TANGOLD projects, which also received millions of dollars from the central bank, are still in progress.

The BoT paid out more than 150bn/- as part of the process of liquidating the Meremeta Gold company, which was actually a joint venture project owned on a 50-50 basis by the Government and a private South African firm going by the name of Trinnex (Pty) Limited.

The energy and minerals ministry has since maintained that all assets and liabilities of the liquidated Meremeta Gold company - including the Buhemba gold mine in Mara Region � were duly transferred to the newly-formed TANGOLD Limited.

In the meantime, the operations of TANGOLD Limited remain shrouded in mystery, with the actual location of the company’s local office unlisted in any public register.

However, investigations by THISDAY have already established that TANGOLD Limited was in fact registered as an offshore company in Port Louis, Mauritius in April 2005, with at least five top Government functionaries at the time listed as its directors.

They included the then BoT governor Dr Daudi Ballali (now deceased), the then Treasury PS Gray Mgonja, the then attorney-general Andrew Chenge, the then PS in the energy and minerals ministry Patrick Rutabanzibwa, and the then PS in the livestock development ministry Vincent Mrisho.