Techinical explanation on Concentrate Ban from ACACIA Chief Operating Officer


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How and why do we produce gold and copper concentrates?

On Friday 3rd March, the Ministry of Energy and Minerals issued a press release stopping the export of mineral sands on the basis that companies should be investing in building smelters in Tanzania for further processing, rather than shipping this product to other countries.

The directive has been in place for two weeks now and affects Acacia at both Bulyanhulu and Buzwagi, which produce a concentrate containing gold, copper and silver. North Mara is not affected.

Our CEO, Brad Gordon was in Tanzania last week to attend urgent meetings with government officials and to try and explain the impact that this ban will have on our business even while we have further dialogue on a suitable way forward to explore smelter options for Tanzania. At this stage, the ban remains in place though we remain hopeful that there will be some positive news in the near future so that normal operations can be restored.

The export of mineral sands, or in our case, the sale of gold and copper concentrate, is an emotive subject in every country with sovereign mineral wealth. There is a view that Tanzania is losing considerable added value by not smelting and refining concentrates in country, while there is another view that companies are also stealing from Tanzania by not declaring all the metals contained in the concentrate.

These are serious issues, with serious consequences for our integrity and the sustainability and profitability of our business and the Tanzanian mining industry. For Acacia to be successful in Tanzania, we must be able to address and correct these misconceptions. Just so everyone is clear, at our mines, we generate our revenue by:

1. Producing and selling gold bars (doré) which are then refined into a more pure gold product – this accounts for 55% of revenues at Bulyanhulu, 45% of revenues at Buzwagi and 100% of revenues at North Mara


2. Producing and selling a concentrate which is smelted and refined to separate out the gold, copper and silver – this accounts for 45% of revenues at Bulyanhulu, 55% of revenues at Buzwagi and 0% of revenues at North Mara


Gold sales account for 95% of total revenues, with 70% coming from doré sales and 25% coming from gold contained within the concentrate. The remaining 5% of revenues is from copper in the concentrate and a very small amount of silver. On this basis, the company is currently losing 30% of its total revenue stream, and around 50% of the combined revenues of Bulyanhulu and Buzwagi. With the concentrate ban in place, this equates to lost revenue of more than $1 million per day (with additional revenue lost for all of the concentrate sitting in Dar es Salaam waiting for shipment for which royalties have been paid).


Addressing the issue of trust


There is a perception that we do not declare everything that is in our concentrate. This is simply not true.

The Tanzania Minerals Audit Agency (TMAA) is present at each of our mines and even has padlocks and seals on various pieces of equipment inside the gold room so that we cannot operate them without the TMAA being physically present to verify everything that we do. Every gold bar and every shipping container of concentrate is sampled so that we know the content of gold, copper and silver. Four samples are taken: one for Acacia, one for the TMAA, one for the overseas smelter and one umpire sample which is kept separate and used if there is a dispute or difference between the other samples.

Further to having the TMAA on site, when it comes time to transporting the gold bars or the concentrate, the Tanzania Revenue Authority (TRA) is also present to observe the process. Before the containers of concentrate can be loaded onto trucks, we must know the value of the gold, copper and silver in the concentrate from the samples taken, and pay the royalty to the government. When the royalty is received in the government bank accounts, the containers are sealed by the TMAA and TRA and then trucking can commence.

What is a concentrate and why do we produce it?

How we process our ore to liberate the contained precious minerals is determined by how and why these minerals were originally formed or deposited in the rocks hundreds of millions or billions of years ago. The scientific fields of geology, mining engineering and metallurgy (mineral processing) are fascinating and require an in depth understanding of the best way to find, mine and process (extract) the payable minerals.

In general terms, when gold is the only payable mineral present (i.e. >98-99% of the value), we can process the ore on the mine site and create gold bars. At both North Mara and Geita, gold is extracted using gravity techniques for the coarse, free gold and then cyanide to leach the finer disseminated gold. Gold bars are smelted at both mines.

Bulyanhulu and Buzwagi have slightly different processes, due to the rock types at the mines which host the gold (95% of the value) and other payable metals such as copper and silver (the remaining 5% of the value). Both mines are still able to extract around half of their gold using gravity and cyanide leach techniques. However we need to use more elaborate techniques to break down the sulphide rock so that the rest of the gold, copper and silver can be liberated.

Fortunately, we can concentrate the sulphides using a process called ‘flotation’ where chemicals are added to the finely ground rock, causing the ore to float and thus separate from the waste rock. The flotation processes are very effective and allow for the gold, copper and silver to be concentrated into a product with much higher values and a much smaller mass than was originally mined:

 Bulyanhulu Mine can process 1.0 million tonnes of underground ore per year and, through the flotation process, remove most of the waste rock and concentrate the minerals into approximately 25,850 tonnes of concentrate containing gold and copper. That is nearly a 40 times reduction in mass which then makes the resultant concentrate valuable enough to sell


 Buzwagi Mine can process 4.4 million tonnes of open pit ore per year which is much lower grade and, through flotation, remove most of the waste rock and concentrate the minerals into approximately 25,750 tonnes of concentrate containing gold and copper. That is nearly a 200 times reduction in mass which then makes the resultant concentrate valuable enough to sell
We can never recover 100% of the gold, silver and copper from our ore. At Bulyanhulu, our gravity, cyanide leach and flotation processes are maximised to achieve the best gold recovery whilst recovering sufficient copper to make the concentrate worthwhile for the smelters (whose primary product in copper) to even want to purchase from us.


I trust that people understand from this brief description, that it is the type of orebody that dictates the processing options that we use. In some respects, North Mara and Geita are actually lucky because they are able to do all of their processing on site and only produce gold bars. For the Bulyanhulu and Buzwagi concentrates, gold is still the most important product as the copper and silver is only 10-15% of the value of the concentrate.


Downstream Processing

It appears that one of the main concerns causing the ban on our selling concentrates for export is that we should be doing all of the downstream processing in Tanzania because otherwise the country doesn’t potentially get full benefit for its minerals. It is important to note that our gold/copper/silver concentrates are already a highly processed and beneficiated product.

Whilst the smelters do charge to process our concentrate, on average for the contract terms that we have agreed with the overseas smelters, we receive 97% of the total value of gold, silver and copper. That is because with any smelting or other chemical process, getting 100% recovery is impossible and these terms pass the risk to the overseas smelters to ensure that they can actually achieve above these recovery rates (or they will lose money). In Tanzania (if a smelter were built), the smelter operator would need to offer competitive terms, not just on price but also on recovery of the various metals, therefore their margins would depend on their own processing costs and efficiency.

There are generally two different types of downstream treatment options to extract the gold, copper and silver from the concentrate: smelting and oxidation. There are three types of oxidation process: roasting, pressure oxidation and biooxidation. The type of process used will depend on a number of variables including the types of ore, size of facility and access to cheap power.

1) Smelting: involves heating the concentrate to 1,200°C to melt the valuable metals (gold, copper and silver)

2) Roasting: essentially ‘cooking’ the concentrate at 750°C and isolating the gold, copper and silver by converting the sulphur in the sulphide minerals into sulphur dioxide gas (which then produces large volumes of sulphuric acid)

3) Pressure oxidation: an autoclave (massive oven) operating at temperatures of 190 - 225°C and high pressures of 1.9 - 3.2 MPa (many components constructed from titanium due to the aggressive conditions)

4) Bio-oxidation: use bacteria in a liquid wash at 42°C, which literally ‘eat’ the sulphide away from the contained gold, copper and silver

There is a lot more detail which can be provided to explain these various processing techniques, though in each case the copper is first separated from the gold and silver and these are treated separately to get the final metal product.

If our mines were able to build dedicated downstream processing facilities, they would be tiny compared to the large commercial smelters. Furthermore, power costs in Tanzania are high compared to other countries with developed smelting industry. When the mines were being built (Bulyanhulu in 1999-2000 and Buzwagi in 2007-2008), studies showed that it was far more cost effective to sell the concentrates to large commercial toll smelters with access to cheap power rather than build our own. We currently sell our concentrate to smelters in Germany, China and Japan.

Based on the current mine plan, Buzwagi will only produce concentrate for another 18 months, after which time, when it is processing the low grade oxide stockpiles, it will not recover any copper and all gold will recovered by gravity and cyanide leach. This will leave Bulyanhulu as the only large scale mine in Tanzania which produces a concentrate.

What do you think?

As employees of Acacia, or contractors working at the Acacia mines, or family and friends, you will no doubt wonder why there is no smelting facility for our gold, copper and silver concentrates in Tanzania.

Ultimately, if it made economic sense to do so – for the country and for the company – then such facilities would have been built. In the south of the DRC and in northern Zambia (all part of the same copper belt, where copper is the primary product), there are sufficient mines producing copper concentrate to warrant constructing large smelters and refineries in country to serve a number of mines which can share the cost. In South America, some of the copper mines – such as Chuquicamata in Chile – are so large that they do their own downstream processing (with a capacity of 855,000 tonnes per year, compared to the Bulyanhulu requirement of just 25-30,000 tonnes per year).

The TMAA conducted an independent study into the construction of a smelter for copper and gold in Tanzania which was updated in early 2011 and which concluded that it was not viable to do so. Acacia has offered to fund the Government conducting an update of this study (though we would not be involved in the study itself), to see whether the situation has changed.

It is important that we all understand more about this concentrate ban so that when it is discussed in different circles, more informed comments and discussions can be had. This issue really is affecting all of us. Please do provide feedback so that we can help to make this matter easier to understand, build trust and explain. With the current approach, we believe we are doing the best for Tanzania and Acacia, by downstream processing our gold and copper ore into a gold copper concentrate on site in Tanzania and then selling this product for smelting and refining in other countries.

Asante Sana

Mark Morcombe
Chief Operating Officer
 
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Charles Mandela

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Bad governance against containing natural resources theft (embezzlement / cheating)! Better that way! Minerals can wait until when there will be good governance to control cheating. For now, NO!
The most important factor in mining success are a good governance and management.

Perhaps when you'll seeing a successful country in mining industry, what sort of questions do you ask?

Or which pitfalls should investors take into account when looking at a country to invest?

When you are looking at them direct in the eyes its very difficult for them to give you direct answers, but good governance matters.
 
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Charles Mandela

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Being the bill engineering hand does not mean there were no other elements in the process ie stakeholders' opinions and legislature. Likewise being a co-chair doesn't make him the dicision maker!
Too much talks! Who's in charge? It's pitiful shameful even to mention his name, but he's a professor!
May be you have forgoten your posion in mining engineering!
Ain't a mining engineer.
Bila shaka
The nation is currently on the right truck!
The right truck!! Or on the right track as they proclaimed.
 
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Massanda OMtima Massanda

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To much talks! Who's in charge? It's pitiful shameful even to mention his name, he's a professor! Can't wonder why we're still poor..
Not really! You want to be rich in an overnight? Pole!

Ain't a mining engineer!
You talk as if one! Though at some point and time, you talk as our country's resources' invader!

The right truck!! Or on the right track as they proclaimed.

Both have a more or less meaning in this!
 
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Massanda OMtima Massanda

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Jaribu kuwa mtulivu ili ujifunze mengi! Ukijifanya kushupaa dunia itakucheka kama inavyofanyika kwa serikali ya Tanzania.
Nikipata walimu wazuri, nitakuwa mpole! Kwa sasa, afadhali nibaki na ninachojua bila kuongeza a au be.
Sijawahi kusikia mtu anaicheka serikali ya Tanzania, isipokuwa kutoka kwako, leo!
 
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The most important factor in mining success are a good governance and management.

Perhaps when you'll seeing a successful country in mining industry, what sort of questions do you ask?

Or which pitfalls should investors take into account when looking at a country to invest?

When you are looking at them direct in the eyes its very difficult for them to give you direct answers, but good governance matters.

Sio unawachapa watu risasi au unawafunga wakurungenzi wa makampuni ya madini, halafu unategemea kupiga hatua. Ni wajinga tu ndo watakaokuona unafaa!.
Don't worry, 2020 is at close door for the good governance to come to meet your dreams! What matters most, is how you will play your cards!
Kwani wakipigwa risasi na kufukuzwa wakurugenzi, Tanzania haina wengine wa kuchukua nafasi za hao wahanga? Aidha ni vizuri kwamba tunao werevu kama wewe ambao wanapuuza hao wajinga!
 
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Charles Mandela

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Nikipata walimu wazuri, nitakuwa mpole! Kwa sasa, afadhali nibaki na ninachojua bila kuongeza a au be.
Sijawahi kusikia mtu anaicheka serikali ya Tanzania, isipokuwa kutoka kwako, leo!
Sio kuicheka serikali ya Tanzania, ni kubeza maamuzi yanayofanywa na baadhi ya viongozi wa serikali ya Tanzania bila kuzingatia utaalamu wa sekta husika.

Lazima ifike mahala tuwe wakweli ili mambo yaende sawa [njano iwe njano, sio nyekundu], sekta ya madini tumeharibu na zisipochukuliwa hatua za tahadhari ndo tutaharibu zaidi.

Kwenye sekta kama hii ambayo inahitaji wawekezaji zaidi wa kigeni ni lazima mashauriano yawepo ili kufikia muhafaka, muhafaka ambao utaambatana na sheria zinazokidhi mahitaji ya kimazingira, kijamii, kiufundi, kiuchumi na kuimarisha mahusiano ya kisiasa baina ya nchi wawekezaji.
 
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Sio kuicheka serikali ya Tanzania, ni kubeza maamuzi yanayofanywa na baadhi ya viongozi wa serikali bila kuzingatia utaalamu wa sekta husika. Na hili likiwa ni mojawapo!.

Lazima ifike mahali tuwe wakweli ili mambo yaende [njano iwe njano sio nyekundu], sekta ya madini tumeharibu na zisipochukuliwa hatua za tahadhari ndiyo tutaharibu zaidi.

Kwenye sekta kama hii ambayo inahitaji wawekezaji zaidi wa kigeni lazima mashauriano yawepo ili kufikia muhafaka, muhafaka ambao utaambatana na sheria zilizokidhi mahitaji ya kimazingira, kijamii, kiufundi, kiuchumi na kuimarisha mahusiano ya kisiasa baina ya nchi wawekezaji.
MASHAURIANO! Ni kweli!
 
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Don't worry, 2020 is at close door for the good governance to come to meet your dreams!
Not my dreams, but for better Tanzania.
What matters most, is how you will play your cards!
That's for citizens, not for me!.
Kwani wakipigwa risasi na kufukuzwa wakurugenzi, Tanzania haina wengine wa kuchukua nafasi za hao wahanga?
Unajua mambo mengine usifanye kwa ushabiki, jaribu kutuliza akili na kufikiri kwa mapana zaidi.

Kitendo cha mbunge kupigwa risasi siku ya kupitisha muswada wa sheria mpya za madini kimeathiri vipi sekta ya madini?

Kitendo cha kuwatuhumu na kuwafunga kwa uhujumu uchumi wakurungenzi wa makampuni ya Acacia na Barrick ilhali wao ni watendaji tu kinatoa taswira gani kisheria?

Je, huu ndo utawala bora na sheria? Ifike mahala tuambizane ukweli, matukio kama haya ndo yanaifanya Tanzania kuwa nyuma kiuwekezaji katika sekta ya madini.
Aidha ni vizuri kwamba tunao werevu kama wewe ambao wanapuuza hao wajinga!
Wajinga tunao humu humu ndani wala hawatoki nje!
 
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Not my dreams, but for better Tanzania.

That's for citizens, not for me!.

Unajua mambo mengine usifanye kwa ushabiki, jaribu kutuliza akili na kufikiri kwa mapana zaidi.

Kitendo cha mbunge kupigwa risasi siku ya kupitisha muswada wa sheria mpya za madini kimeathiri vipi sekta ya madini?

Kitendo cha kuwatuhumu na kuwafunga kwa uhujumu uchumi wakurungenzi wa makampuni ya Acacia na Barrick ilhali wao ni watendaji tu kinatoa taswira gani kisheria?

Je, huu ndio utawala bora na sheria? Ifike mahala tuambizane ukweli, matukio kama haya ndo yanaifanya Tanzania kuwa nyuma kiuwekezaji katika sekta ya madini.

Wajinga tunao humu humu ndani wala hawatoki nje!
Are you not a citizen?
Una maana alipigwa risasi kwa sababu alikuwa anaenda kupinga sheria mpya ya madini?
Wakurugenzi gani wa Acacia na Barrick waliotuhumiwa na hatimaye kufungwa kwa uhujumu uchumi? Je, ni kweli kwamba baada ya sakata la Acacia / Barrick / sheria mpya ya madini hakuna mwekezaji yoyote wa madini aliyekuja Tanzania?
Siamini kwamba wajinga wamo JF tu na nje hawapo! Na hii inanipa mashaka juu ya uwerevu wako!
 
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Massanda OMtima Massanda

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Natumaini tumeelewana!
Sina ubishi juu ya umuhimu wa mchakato wa mashauriano na ushirikishwaji (reconciliation and engagement processes) wa wadau kwa masuala yote, yawe ya msingi au la! Ni muhimu!
 
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Charles Mandela

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Are you not a citizen?
I am not only a private citizen. I also am simply a man who does truly believe in God.
Una maana alipigwa risasi kwa sababu alikuwa anaenda kupinga sheria mpya ya madini?
Siwezi kusema hilo tukio ni la ujambazi. Kama lingekuwa ni tukio la ujambazi wangebeba kila kitu. Ni tukio la kisiasa lililoambatana na uwasilishaji wa sheria mpya za madini.

Na kitu ambacho watu wengi hawaelewi kuhusu haya makampuni ya madini ni upelelezi na ushushushu wanaofanya kwa ajili ya masilahi yao ya kibiashara.

Kiuhalisia, hali ya kiuwekezaji imetetereka sana nchini Tanzania baada ya utawala wa awamu ya tano kuingia madarakani, hii inasababishwa na aina ya uongozi uliopo kwa wakati huu.

Kupigwa marufuku kwa mikutano ya hadhara ya vyama vya siasa na kukatazwa kuonyeshwa kwa vipindi vya bunge ili serikali iweze kudhibiti habari.

Sasa unategemea nini kwa upande wa uwekezaji kama uhuru wa kupata habari na kupewa habari unadhibitiwa? Hata kama tungekuwa na madini kila mtaa, bila ya kuwa na utawala bora ni bure!
Wakurugenzi gani wa Acacia na Barrick waliotuhumiwa na hatimaye kufungwa kwa uhujumu uchumi?
Kuna Deo Mwanyika na Alex Lugendo ambaye ni mshauri wa serikali ndani ya kampuni hiyo ya uchimbaji madini.
Je, ni kweli kwamba baada ya sakata la Acacia / Barrick / sheria mpya ya madini hakuna mwekezaji yoyote wa madini aliyekuja Tanzania?
Hakuna! Kinachofanyika ni kuendeleza vitalu vilivyokuwa vinamilikiwa hapo kabla, pamoja na hayo yote uchukuaji wa leseni za madini ulisimama kwa muda wa mwaka mmoja hivyo kupelekea shughuli za madini kuzorota.
Siamini kwamba wajinga wamo JF tu na nje hawapo! Na hii inanipa mashaka juu ya uwerevu wako!
Hmmm!
 
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Massanda OMtima Massanda

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I am not only a private citizen. I am simply a man.

Siwezi kusema hilo tukio ni la ujambazi. Kama lingekuwa ni tukio la ujambazi wangebeba kila kitu. Ni tukio la kisiasa lililoambatana na uwasilishaji wa sheria mpya za madini.

Na kitu ambacho watu wengi hawaelewi kuhusu haya makampuni ya madini ni upelelezi na ushushushu wanaofanya kwa ajili ya masilahi yao ya kibiashara.

Kiuhalisia, hali ya kiuwekezaji imetetereka sana nchini Tanzania baada ya utawala wa awamu ya tano kuingia madarakani, hii inasababishwa na aina ya uongozi uliopo kwa wakati huu.

Kupigwa marufuku kwa mikutano ya hadhara ya vyama vya siasa na kukatazwa kuonyeshwa kwa vipindi vya bunge ili serikali iweze kudhibiti habari.

Sasa unategemea nini kwa upande wa uwekezaji kama uhuru wa kupata habari na kupewa habari unadhibitiwa? Hata kama tungekuwa na madini kila mtaa, bila ya kuwa na utawala bora ni bure!

Kuna Deo Mwanyika na Alex Lugendo ambaye ni mshauri wa serikali ndani ya kampuni hiyo ya uchimbaji madini.

Hakuna! Kinachofanyika ni kuendeleza vitalu vilivyokuwa vinamilikiwa hapo kabla, pamoja na hayo yote uchukuaji wa leseni za madini ulisimama kwa muda wa mwaka mmoja hivyo kupelekea shughuli za madini kuzorota.

Hmmm!
Doscontentedly noted and thanx
 
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How and why do we produce gold and copper concentrates?

On Friday 3rd March, the Ministry of Energy and Minerals issued a press release stopping the export of mineral sands on the basis that companies should be investing in building smelters in Tanzania for further processing, rather than shipping this product to other countries.

The directive has been in place for two weeks now and affects Acacia at both Bulyanhulu and Buzwagi, which produce a concentrate containing gold, copper and silver. North Mara is not affected.

Our CEO, Brad Gordon was in Tanzania last week to attend urgent meetings with government officials and to try and explain the impact that this ban will have on our business even while we have further dialogue on a suitable way forward to explore smelter options for Tanzania. At this stage, the ban remains in place though we remain hopeful that there will be some positive news in the near future so that normal operations can be restored.

The export of mineral sands, or in our case, the sale of gold and copper concentrate, is an emotive subject in every country with sovereign mineral wealth. There is a view that Tanzania is losing considerable added value by not smelting and refining concentrates in country, while there is another view that companies are also stealing from Tanzania by not declaring all the metals contained in the concentrate.

These are serious issues, with serious consequences for our integrity and the sustainability and profitability of our business and the Tanzanian mining industry. For Acacia to be successful in Tanzania, we must be able to address and correct these misconceptions. Just so everyone is clear, at our mines, we generate our revenue by:

1. Producing and selling gold bars (doré) which are then refined into a more pure gold product – this accounts for 55% of revenues at Bulyanhulu, 45% of revenues at Buzwagi and 100% of revenues at North Mara


2. Producing and selling a concentrate which is smelted and refined to separate out the gold, copper and silver – this accounts for 45% of revenues at Bulyanhulu, 55% of revenues at Buzwagi and 0% of revenues at North Mara


Gold sales account for 95% of total revenues, with 70% coming from doré sales and 25% coming from gold contained within the concentrate. The remaining 5% of revenues is from copper in the concentrate and a very small amount of silver. On this basis, the company is currently losing 30% of its total revenue stream, and around 50% of the combined revenues of Bulyanhulu and Buzwagi. With the concentrate ban in place, this equates to lost revenue of more than $1 million per day (with additional revenue lost for all of the concentrate sitting in Dar es Salaam waiting for shipment for which royalties have been paid).


Addressing the issue of trust

There is a perception that we do not declare everything that is in our concentrate. This is simply not true.

The Tanzania Minerals Audit Agency (TMAA) is present at each of our mines and even has padlocks and seals on various pieces of equipment inside the gold room so that we cannot operate them without the TMAA being physically present to verify everything that we do. Every gold bar and every shipping container of concentrate is sampled so that we know the content of gold, copper and silver. Four samples are taken: one for Acacia, one for the TMAA, one for the overseas smelter and one umpire sample which is kept separate and used if there is a dispute or difference between the other samples.

Further to having the TMAA on site, when it comes time to transporting the gold bars or the concentrate, the Tanzania Revenue Authority (TRA) is also present to observe the process. Before the containers of concentrate can be loaded onto trucks, we must know the value of the gold, copper and silver in the concentrate from the samples taken, and pay the royalty to the government. When the royalty is received in the government bank accounts, the containers are sealed by the TMAA and TRA and then trucking can commence.

What is a concentrate and why do we produce it?

How we process our ore to liberate the contained precious minerals is determined by how and why these minerals were originally formed or deposited in the rocks hundreds of millions or billions of years ago. The scientific fields of geology, mining engineering and metallurgy (mineral processing) are fascinating and require an in depth understanding of the best way to find, mine and process (extract) the payable minerals.

In general terms, when gold is the only payable mineral present (i.e. >98-99% of the value), we can process the ore on the mine site and create gold bars. At both North Mara and Geita, gold is extracted using gravity techniques for the coarse, free gold and then cyanide to leach the finer disseminated gold. Gold bars are smelted at both mines.

Bulyanhulu and Buzwagi have slightly different processes, due to the rock types at the mines which host the gold (95% of the value) and other payable metals such as copper and silver (the remaining 5% of the value). Both mines are still able to extract around half of their gold using gravity and cyanide leach techniques. However we need to use more elaborate techniques to break down the sulphide rock so that the rest of the gold, copper and silver can be liberated.

Fortunately, we can concentrate the sulphides using a process called ‘flotation’ where chemicals are added to the finely ground rock, causing the ore to float and thus separate from the waste rock. The flotation processes are very effective and allow for the gold, copper and silver to be concentrated into a product with much higher values and a much smaller mass than was originally mined:

 Bulyanhulu Mine can process 1.0 million tonnes of underground ore per year and, through the flotation process, remove most of the waste rock and concentrate the minerals into approximately 25,850 tonnes of concentrate containing gold and copper. That is nearly a 40 times reduction in mass which then makes the resultant concentrate valuable enough to sell


 Buzwagi Mine can process 4.4 million tonnes of open pit ore per year which is much lower grade and, through flotation, remove most of the waste rock and concentrate the minerals into approximately 25,750 tonnes of concentrate containing gold and copper. That is nearly a 200 times reduction in mass which then makes the resultant concentrate valuable enough to sell
We can never recover 100% of the gold, silver and copper from our ore. At Bulyanhulu, our gravity, cyanide leach and flotation processes are maximised to achieve the best gold recovery whilst recovering sufficient copper to make the concentrate worthwhile for the smelters (whose primary product in copper) to even want to purchase from us.


I trust that people understand from this brief description, that it is the type of orebody that dictates the processing options that we use. In some respects, North Mara and Geita are actually lucky because they are able to do all of their processing on site and only produce gold bars. For the Bulyanhulu and Buzwagi concentrates, gold is still the most important product as the copper and silver is only 10-15% of the value of the concentrate.


Downstream Processing

It appears that one of the main concerns causing the ban on our selling concentrates for export is that we should be doing all of the downstream processing in Tanzania because otherwise the country doesn’t potentially get full benefit for its minerals. It is important to note that our gold/copper/silver concentrates are already a highly processed and beneficiated product.

Whilst the smelters do charge to process our concentrate, on average for the contract terms that we have agreed with the overseas smelters, we receive 97% of the total value of gold, silver and copper. That is because with any smelting or other chemical process, getting 100% recovery is impossible and these terms pass the risk to the overseas smelters to ensure that they can actually achieve above these recovery rates (or they will lose money). In Tanzania (if a smelter were built), the smelter operator would need to offer competitive terms, not just on price but also on recovery of the various metals, therefore their margins would depend on their own processing costs and efficiency.

There are generally two different types of downstream treatment options to extract the gold, copper and silver from the concentrate: smelting and oxidation. There are three types of oxidation process: roasting, pressure oxidation and biooxidation. The type of process used will depend on a number of variables including the types of ore, size of facility and access to cheap power.

1) Smelting: involves heating the concentrate to 1,200°C to melt the valuable metals (gold, copper and silver)

2) Roasting: essentially ‘cooking’ the concentrate at 750°C and isolating the gold, copper and silver by converting the sulphur in the sulphide minerals into sulphur dioxide gas (which then produces large volumes of sulphuric acid)

3) Pressure oxidation: an autoclave (massive oven) operating at temperatures of 190 - 225°C and high pressures of 1.9 - 3.2 MPa (many components constructed from titanium due to the aggressive conditions)

4) Bio-oxidation: use bacteria in a liquid wash at 42°C, which literally ‘eat’ the sulphide away from the contained gold, copper and silver

There is a lot more detail which can be provided to explain these various processing techniques, though in each case the copper is first separated from the gold and silver and these are treated separately to get the final metal product.

If our mines were able to build dedicated downstream processing facilities, they would be tiny compared to the large commercial smelters. Furthermore, power costs in Tanzania are high compared to other countries with developed smelting industry. When the mines were being built (Bulyanhulu in 1999-2000 and Buzwagi in 2007-2008), studies showed that it was far more cost effective to sell the concentrates to large commercial toll smelters with access to cheap power rather than build our own. We currently sell our concentrate to smelters in Germany, China and Japan.

Based on the current mine plan, Buzwagi will only produce concentrate for another 18 months, after which time, when it is processing the low grade oxide stockpiles, it will not recover any copper and all gold will recovered by gravity and cyanide leach. This will leave Bulyanhulu as the only large scale mine in Tanzania which produces a concentrate.

What do you think?

As employees of Acacia, or contractors working at the Acacia mines, or family and friends, you will no doubt wonder why there is no smelting facility for our gold, copper and silver concentrates in Tanzania.

Ultimately, if it made economic sense to do so – for the country and for the company – then such facilities would have been built. In the south of the DRC and in northern Zambia (all part of the same copper belt, where copper is the primary product), there are sufficient mines producing copper concentrate to warrant constructing large smelters and refineries in country to serve a number of mines which can share the cost. In South America, some of the copper mines – such as Chuquicamata in Chile – are so large that they do their own downstream processing (with a capacity of 855,000 tonnes per year, compared to the Bulyanhulu requirement of just 25-30,000 tonnes per year).

The TMAA conducted an independent study into the construction of a smelter for copper and gold in Tanzania which was updated in early 2011 and which concluded that it was not viable to do so. Acacia has offered to fund the Government conducting an update of this study (though we would not be involved in the study itself), to see whether the situation has changed.

It is important that we all understand more about this concentrate ban so that when it is discussed in different circles, more informed comments and discussions can be had. This issue really is affecting all of us. Please do provide feedback so that we can help to make this matter easier to understand, build trust and explain. With the current approach, we believe we are doing the best for Tanzania and Acacia, by downstream processing our gold and copper ore into a gold copper concentrate on site in Tanzania and then selling this product for smelting and refining in other countries.

Asante Sana

Mark Morcombe
Chief Operating Officer
All your defenses wont hold any water. The fact is that you guys have been caught with your pants down by the UnAfrican
 
Charles Mandela

Charles Mandela

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Charles Mandela

Charles Mandela

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All your defenses wont hold any water. The fact is that you guys have been caught with your pants down by the UnAfrican
All the way up for the weekend!.
 
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fred1149

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fred1149

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View attachment 494149
I agree wholeheartedly with his actions as a President, but appointing a second committee to conduct an investigation into the mineral content of impounded copper concentrate [metallurgical accounting assessment] is nothing without considering the legislative framework of Tanzania's laws governing the mining industry.

We need the constitutional reform agenda on a mining legal framework. This has to be due to some sort of corruption in the past governments.
I think that you have gone an astray as your statement is misconception in that point of view.
What I know is that, when the president John pombe magufuli appoints the second committe to conduct an investigation of other impounded gemstone, his point is to attain the view or having made research and come up with the new idea on how government will seek the view of stake holder's on how to regulate the whole gemstone products, then he will use such an idea to ensure that the policy and the new gemstone pieces of legislation would act as the cornerstone of gearing up the collection of the revenue for the best interest of our economy as far as the increasing of revenue is concerned.

To sum up, it is the policy /an idea that comes first and then the law comes to cure the policy because the policy is not the law but the law comes from the policy. Therefore the act of our lovely president John Joseph pombe magufuli to appoints the 2nd committee to probe for the gemstone was to come up with the idea on how to come up with the new idea that will focus into country's prosperity and thus the new bill will be tabled to the Parliament in order to enact new laws or change some pieces of legislation to curb the situation

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