JK you can change the ownership of KCM as soon as possible without waiting for another recommendation of a probe a team. Also, all payments that were made to fisadi Mkapa and Yona by TANESCO should be return to Treasury together with interest charges.
Bomani mining sector review team recommends: Formal probe into Kiwira
-Also advises against privatization of government mining firm
THISDAY REPORTER
Dar es Salaam
THE report of the presidential mining sector review committee has called for a swift, formal investigation into the privatization of the formerly state-owned Kiwira coal mine, which was sold under dubious circumstances in 2005 to a private company formed by ex-president Benjamin Mkapa and his cabinet minister Daniel Yona.
The committee�s long-awaited report, presented to President Jakaya Kikwete at State House on Saturday, has also recommended an urgent probe into reports that some assets of the Kiwira mine were being sold off as scrap metal by the Mkapa-Yona company, Tanpower Resources Limited.
According to THISDAY findings, the report proposes a full review of the mines privatization contract, to establish whether or not the investor company is fulfilling its contractual obligation, and an official investigation into reports that ex-workers of the coal mine were given a raw deal in the payment of their terminal benefits.
The committee, chaired by retired Judge Mark Bomani, also recommends an assessment of reports that the coal mining operations are polluting the nearby Kiwira River in Mbeya Region, and verification of claims by Tanpower Resources that it has invested 13bn/- in developing the coal mine since buying a majority 70 per cent stake some three years ago.
According to a source familiar with the committee�s workings: Members of the committee who visited the Kiwira mine were unconvinced that the investors had really spent the stated 13bn/- to develop the mine.
It is understood that Tanpower Resources bought the 70 per cent majority stake in the Kiwira coal mine for just 700m/-, while the mine itself was built in the 1980s at a cost of over 4bn/-.
The coal-fired power project at the mine signed a 20-year, $271.8m (approx. 340bn/-) deal with the state-run Tanzania Electric Supply Company Limited (TANESCO) in 2006 for the generation of 200 megawatts of electricity, but has so far been failing to meet production deadlines.
Investigations by THISDAY have long established that way back in December 2004, Mkapa and Yona � while still serving as president and minister for energy and minerals, respectively � jointly founded Tanpower Resources Limited, with various close relatives including wives, children and in-laws in tandem.
At the time of its registration, the first listed directors of Tanpower Resources were the then first lady Mrs Anna Mkapa; Yona himself; Nicholas Mkapa (the then president and first lady�s son); Joseph Mbuna (Nicholas Mkapa�s father-in-law); and one Evans Mapundi.
Among other things, the company was licensed to �deal with coal mining in order to generate electricity for consumption and sale; to generate power generators, transmitters and general distributors; and to provide power and general projects management, project appraisers and consultants.�
It has further been established that Mkapa and Yona - through their positions in government - were also directly involved in the privatization of the then state-owned Kiwira coal mine. And in mid-2005 - just a few months after its incorporation - Tanpower Resources entered into a joint venture with the government to acquire 70 per cent of the Kiwira coal mine shares. The private company later reportedly increased its shareholding in the coal mine to 85 per cent, leaving the government with just 15 per cent.
Apart from commenting on the controversial privatization of the Kiwira mine, the larger part of the report dwells on the countrys gold mining sector.
It advises the government to shelve plans for the privatization of the State Mining Corporation (STAMICO) and the sale of its remaining shares in the Williamson Diamond Mine in Shinyanga Region, as part of a major policy u-turn on state involvement in large-scale mining activities in the country.
Before its sale to Tanpower Resources, the Kiwira coal mine was owned 100 per cent by STAMICO.
The final report of the mining sector review committee has also called for a radical shift in policy towards direct government participation in large-scale mining operations.
It is suggested that the government and Tanzanian citizens should play a more prominent role in the countrys mining sector and reduce the dominance of foreign companies in the sector.
The committee has recommended that the government should remove STAMICO from the list of parastatals earmarked for privatization, said a well-placed source, adding: Instead, the report recommends that the parastatal be strengthened and turned into a government executive agency responsible for resource development, through exploration, development of mines and engagement in other businesses in the mining sector on behalf of the government.
STAMICO, an ailing parastatal under the Ministry of Energy and Minerals, is currently responsible for mineral exploration and production activities.
Apart from Judge Bomani, other members of the committee included Pricewaterhouse Coopers tax administration expert David Tarimo, former industries and trade minister Iddi Simba, Kigoma North Member of Parliament Zitto Kabwe (CHADEMA), and Bariadi East legislator John Cheyo (UDP).
Also in the team were CCM legislators Dr Harrison Mwakyembe (Kyela) and Ezekiel Maige (Msalala), as well as Ms Maria Kejo from the Ministry of Justice and Constitutional Affairs, Edward Kihundwa from the Ministry of Lands, Housing and Human Settlement, Mugisha Kamugisha from the Ministry of Finance and Economic Affairs, Ms Salome Makange from the Ministry of Energy and Minerals, and Peter Machunde from the Dar es Salaam Stock Exchange (DSE).