Tanzania's 'wasted' golden opportunity SEBASTIAN MRINDOKO THIS DAY Dar es Salaam A NEW report released yesterday has once again highlighted inherent problems in Tanzania's mining sector regime, where foreign-owned mines continue to post record exports while ordinary citizens wallow in poverty. ''Gold mining is the fastest growing sector of Tanzania's economy. Minerals now account for nearly half the country's exports and Tanzania is Africa's third largest gold producer,'' says the report aptly titled ''A Golden Opportunity? How Tanzania is Failing to Benefit from Gold Mining.'' It adds: ''Yet ordinary Tanzanians are not benefiting from this boom both because tax laws are overly favourable to multinational companies and because of the practices of these companies. Tanzania is being plundered of its natural resources and wealth.'' The report is highly critical of the foreign-owned gold mines operating in the country, estimating that at a ''very conservative estimate,'' the combined loss to Tanzania over the past seven years from low royalty rates, unpaid corporation tax and tax evasion amount to a staggering $400m (approx. 480bn/-). ''We also estimate that the concentration of gold mining in the hands of large multinational companies at the expense of small-scale artisan miners has put 400,000 people out of work,'' says the report. The report was authored by Mark Curtis, an independent author, journalist and consultant and Tundu Lissu, a well-known local lawyer and activist. ''The losses do neither cover the financial costs or other tax incentives such as Value Added Tax (VAT) exemption, which are extremely difficult to estimate,'' states the report. The report was published by the Christian Council of Tanzania (CCT), National Muslims Council of Tanzania (BAWKATA) and the Tanzania Episcopal Conference Centre (TEC). It was financed by the Norwegian Church Aid and Christian Aid. The report portrays the mining regime in Tanzania as a sector engulfed by top secrecy and urges the government to improve transparency in the mining contracts. According to Curtis and Lissu, the report focused on three key issues including tax revenues from gold mining, democracy and corruption and local economic development. Curtis said the Tanzanian government has received a paltry $13 to $28.7m annually in all taxes and royalties from the large-scale gold mines operating in the country, but there were still other lost income streams. Some of the lost income streams include $61m over the past seven years by not setting the royalty rate for gold at the preferred five per cent, or $136m by not setting it even at 7.5 per cent, he explained. He said around $57m on unpaid corporation tax was lost based on what just two companies -- Anglo Gold Ashanti and Barrick Gold Corp. -- declared as their gross profits. Furthermore, he said $132.5m of tax evasion discovered by an Alex Stuart Assayers audit together with $25m unconfirmed royalty payments and $50m failed to be set aside by the mining companies for environmental rehabilitations, also amounted to lost income. On his part, Lissu said on community development, the Ashanti and Geita gold mines spent only 700m/- in supporting various communal services in areas surrounding the mines although they exported gold worth billions of shillings. The Kigoma North MP, Zitto Kabwe (CHADEMA), said the report unveiled yesterday would be a useful tool in the ongoing work of the mining review team appointed by President Jakaya Kikwete. Zitto is also a member of the government's mining review committee chaired by Judge Mark Bomani. Fredrik Glad-Gjernes, the Norwegian Church Aid country representative, criticised Canada's involvement in Tanzania's mining sector. ''I am ashamed of all these evils for which my country (Canada) is doing to Tanzania because it is benefiting enormously while Tanzania, rich in mining resources, was getting nothing,'' he said. On his part Bishop Peter Kitula, from Christian Council of Tanzania said there were severe environmental destructions caused by uncontrolled chemicals from mining activities which have been left to flow randomly.