Technical explanation on Concentrate Ban from ACACIA Chief Operating Officer

[Massanda OMtima Massanda]

The mining investment attractiveness in Africa shows Tanzania's score and rank had deteriorated in 2017, dropping from 59th (of 104) in 2016 to 78th (of 91).
View attachment 769990
Source: https://t.co/56pvX2zNyD

Better that way! This will give us time to consolidate the best way to go about it. Remember the extraction of our minerals was going in a terrific terrifying speed!

 

[MJINI CHAI]

Have you heard of the current 'PARADISE DOCUMENT' scandal? It is talking more louder than the mouthpiece of those who ignore the effort of our president and the cry of most African Countries against our natural resources sabotage! And I am sure, sooner than later, they will apologize for their misconception to the president's philosophy of HAPA KAZI TU, UZALENDO KWANZA and other African countries (not the white man's puppets) Cry!
Let us wait and see!

Our eyes are not yet closed.............!!!!

 

[Mzee Mukaruka]

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

Mr. Chief Operating Officer can u put this in Kiswahili ili wana JF wengi tukuelewe. That is one. Two try to put in practice your secondary school SUMMARIZING SKILLS ILI TUKUELEWE Long articles on serious issues like MAKINIKIA UNAPOTEZA WENGI. By the way hayo makonteina mshayachukua na kuyauza Europe au Asia!?

 

[Mzee Mukaruka]

The mining investment attractiveness in Africa shows Tanzania's score and rank had deteriorated in 2017, dropping from 59th (of 104) in 2016 to 78th (of 91).
View attachment 769990
Source: https://t.co/56pvX2zNyD

SOURCE ni muhimu ndugu yangu kama unataka kuwaelewa hawa Wazungu au Wadhungu, whichever is easier!

 

[Massanda OMtima Massanda]

Our eyes are not yet closed.............!!!!

What matters is: "do they see"; because they may be open but they don't see! Likewise we may have ears but we don't hear! It is a bit complex!

 

[Massanda OMtima Massanda]

Mining industry is not a trial - and - error industry! The government should assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration and mining investment.

The government should also look to the extent that, those regulations and public policy factors encourage or discourage mining investment.

The government should involve the number of jurisdictions that can be included in the study that tends to wax and wane as the mining sector grows or shrinks due to sectoral factors.

Furthermore, the impact of government policies can also be significant in encouraging or discouraging investment in this important area of economic activity, and it's obvious the industry shrink due to these new government policies. The question remains of what the Tanzanian government is going to do on this matter.

Rules of the game in any investment are based on win win indemnity! In this case, the government vs the investor!

 

[Massanda OMtima Massanda]

Forgetting about win - win scenario, It's not as 50 by 50 as you might think! In a win - win situation, it's normal to see that one is greater than the other sometimes. But you can't deny that the relationship benefits both parties. As both parties benefit from the deal, it's good. In some cases government may not win as much as investors as well, but no party loses.

With unfair deals (a more or less one-side benefits) as the hidden agreements may read (a belief behind the hidden curtains), it is equally clear that, there is more little or none that the country benefits out of them and thus becoming a loosing victim!
In other words, we need unquestionable (comprehensive) deals that concern the exploitation of our natural resources. Otherwise, they will, not only diminish our economic well being but worse enough, leave our land with unproductive pits!

 

[Massanda OMtima Massanda]

Forgetting about win - win scenario, It's not as 50 by 50 as you might think! In a win - win situation, it's normal to see that one is greater than the other sometimes. But you can't deny that the relationship benefits both parties. As both parties benefit from the deal, it's good. In some cases government may not win as much as investors as well, but no party loses.

With unfair deals (a more or less one-side benefits) as the hidden agreements may read (a belief behind the hidden curtains), it is equally clear that, there is more little or none that the country benefits out of them and thus becoming a loosing victim!
In other words, we need unquestionable (comprehensive) deals that concern the exploitation of our natural resources. Otherwise, they will, not only diminish our economic well being but worse enough, leave our land with unproductive pits!

 

[Charles Mandela]

With unfair deals (a more or less one-side benefits) as the hidden agreements may read (a belief behind the hidden curtains), it is equally clear that, there is more little or none that the country benefits out of them and thus becoming a loosing victim!
In other words, we need unquestionable (comprehensive) deals that the exploitation of our natural resources. Otherwise, they will, not only diminish our economic well being but worse enough, leave our land with unproductive pits!

Too much blah blah, that is it!

Who signed those unfair deals?

Who is responsible for those inappropriate hidden agreements?

Don't simply blame foreign investors when the main problem resolute within your own government itself.

 

[Massanda OMtima Massanda]

Too much blah blah, that is it! Who signed those unfair deals? Who is responsible for hidden agreements? Don't simply blame investors when the main problem resolute within your own government itself.

Be it bluh blah or logical, do we have to leave the bygone be bygone even when it pinches? It could be the government or the syndrome of power misuse of which we still have to question, rafiki!

 

[Charles Mandela]

Be it bluh blah or logical, do we have to leave the bygone be bygone even when it pinches? It could be the government or the syndrome of power misuse of which we still have to question, rafiki!

So who's to blame for misuse of power?

The government or foreign investors?

Don't act like you are not aware of what happened and still happening in this industry!

The land doesn't belong to us, we belong to the land.

So we have to implements an appropriate mining laws and regulations that will allow the country to lay the foundation for economic diversification from mining industry.

 

[Massanda OMtima Massanda]

So who's to blame for misuse of power? Government or investors? Don't act like you aren't aware of what happened and still happening in this industry. The land doesn't belong to us, we belong to the land so we have to implements appropriate mining laws and regulations that will allow the country to lay the foundation for economic diversification from mining industry.

There is no way the investors can dodge the blame of colluding with greedy selfish leaders to sabotage our economy. And there is no way we shouldn't raise our voices against the consequences we suffer and that is where I agree with you that there must be in place, not only proper mining laws and regulation, but also proper enforcement!

 

[Charles Mandela]

There is no way the investors can dodge the blame of colluding with greedy selfish leaders to sabotage our economy.

Have you ever involved in any business negotiation?

You should never view foreign investors as a disadvantage or part of the problem.

Instead, it's important for you and the government to understand that in any activity carried out with an intention of making profit every party fight to win, so facing and overcoming adversity is actually one of your biggest advantage.

And there is no way we shouldn't raise our voices against the consequences we suffer and that is where I agree with you that there must be in place, not only proper mining laws and regulation, but also proper enforcement!

Even a non expert can work out that to grow a mining industry requires systematic and purposeful effort to develop.

 

[Massanda OMtima Massanda]

Have you ever involved in any business negotiations? You should never view foreign investors as a disadvantage or part of the problem. Instead, it's important for you and the government to understand that in any activity carried out with an intention of making profit every side fight to win, so facing and overcoming adversity is actually one of your biggest advantages.

Even a non expert can work out that to grow a mining industry requires systematic and purposeful effort to develop.

Mark you, there may be no government in these agreements but rather selfish guys from both parties! One side pretending to represent the government and the other one wanting to make a huge profit by buying in the so called government reps (if you remember the 'radar saga', this could be the combination).
And this is where I think, the government should deal squarely with all those who signed these queer agreements!

 

[Charles Mandela]

Mark you, there may be no government in these agreements but rather selfish guys from both parties!

Pardon! Have you ever involved in any business negotiations?

One side pretending to represent the government and the other one wanting to make a huge profit by buying in the so called government reps (if you remember the 'radar saga', this could be the combination).
And this is where I think, the government should deal squarely with all those who signed these queer agreements!

I am regularly reading your comments but fails to understand what are you standing for! Do you really understand what is happening in mining industry?

 

[Massanda OMtima Massanda]

Pardon! Have you ever involved in any business negotiations?

I am regularly reading your comments but I fails to understand what are you standing for! Do you really understand what is happening in mining industry?

ANS TO QUEST. NO 1. Yes, I have, in most clean business negotiations (where position and interest are without collusion / corruption)!
ANS TO QUEST. NO 2. Going back to the core or main theme of the thread, and to both your and my views, we are either discussing out of point or we are not chewing the gum of the same taste!
In my thinking, I am of the opinion that the agreements vowed to fever the investor more than the state due to either lack of integrity or knowledge / skills from our reps as the indices show that there are many more minerals than those which were said to be in the concentrates. Had it been that these other said minerals were enlisted among others, then, option for establishing a smelting facility would have been considered and thus put in place.
It is not that I dislike investors in the mining industry (most of my life has been in this game) but that we need to have a fair deal where one hand washes another!
Last though not least, thanks for being my running mate in various discussions in various JF threads! Keep it on and chao!

 

[Charles Mandela]

ANS TO QUEST. NO 1. Yes, I have, in most clean business negotiations (where position and interest are without collusion / corruption)!

Just because you say it, doesn't make it so. It's time to start facing reality and stop pretending.

Tax bills have levied at random, revealing unclear laws and instances of corruption, those bad decisions are from the government, not foreign investors.

So how can you find clean business negotiations for that matter?

Licenses can be removed and re-issued to other parties without a reason or an explanation, and this happened just few days ago.

How can you manage mining sector with those negative sentiments among investors?

ANS TO QUEST. NO 2. Going back to the core or main theme of the thread, and to both your and my views, we are either discussing out of point or we are not chewing the gum of the same taste!
In my thinking, I am of the opinion that the agreements vowed to fever the investor more than the state due to either lack of integrity or knowledge / skills from our reps as the indices show that there are many more minerals than those which were said to be in the concentrates. Had it been that these other said minerals were enlisted among others, then, option for establishing a smelting facility would have been considered and thus put in place.
It is not that I dislike investors in the mining industry (most of my life has been in this game) but that we need to have a fair deal where one hand washes another!
Last though not least, thanks for being my running mate in various discussions in various JF threads! Keep it on and chao!

Giving rise to engineering and managerial systems that are helping investors [both native and foreigners] to manage their economic activities and building capacity at large.

 

[The only]

kichwa cha habari acacia content tanzanite khaaaa kama hujui lugha si ukaushe bosi wangu

 

[JMWAKA]

Masunga maziku seems your name came around western part of Tanzania but your content and argument zinawetetea mabeberu at I unasema kuwa in kosa LA serikali kuingia mikataba ya ovyo ni sawa mm kama normal citizen sikatai lakini unapingana na hiyo mikataba kurekebishwa kwani n msahafu au biblia isiyobadilika kwahiyo sababu nilikuwa ya ovyo ndo iendelee kuwa ya ovyo NOOO NOO NOO Tanzania is not Shamba LA Bibi Anymore other countries like china people like you are hanged public cause of betrayal of the country

I rest my case

 

[Charles Mandela]

Masunga maziku seems your name came around western part of Tanzania

I am originated from north western part of Tanzania, Shinyanga.

but your content and argument zinawetetea mabeberu

Name has got nothing to do with reality.

at I unasema kuwa in kosa LA serikali kuingia mikataba ya ovyo ni sawa mm kama normal citizen sikatai lakini unapingana na hiyo mikataba kurekebishwa kwani n msahafu au biblia isiyobadilika

Ni vizuri kubadilisha, lakini ni vyema kufahamu kuwa hawa ni wageni wametoka kwao kuja kuwekeza Tanzania kwa nia ya kupata faida. Kwa hiyo, unapofanya marekebisho ya sheria za madini ni lazima ukazingatia kanuni na taratibu za kiuwekezaji bila kuathiri pande zote mbili.

kwahiyo sababu nilikuwa ya ovyo ndo iendelee kuwa ya ovyo NOOO NOO NOO Tanzania is not Shamba LA Bibi Anymore

Kwani baada ya mabadiliko ya sheria za madini, mikataba imekuwa bora? Jibu ni hakuna, kinachoendelea sasa hivi ni kudhohofika kwa sekta ya madini!

other countries like china people like you are hanged public cause of betrayal of the country. I rest my case

Do not compare us with a very powerful and ambitious government like China, more reforms are needed to promote costitutionalism in our country than having an outdated and outmoded style of leadership.