21 June 2014

Tanzania: Richland Retrenches Workers in Arusha

Arusha — The London listed Richland Resources is to cut a third of the workforce in its Arusha's Merelani operations to reduce costs.

Richland announced on 14 April 2014 that the Company could no longer support further financial investment into Tanzania following a two-year period that has seen key working areas at Merelani being occupied by armed illegal miners.

In a statement Richland reported that a review of staffing needs, 229 of 670 people employed at Merelani have been identified for possible retrenchment while 41 have been suspended for serious employment breaches.

Richland wants to prevent any temporary mine closure occurring while the Tanzania government completes its work in making the area secure, the statement adds.

Richland also plans to install body scanners to improve the performance of the mine as the Tanzanian government has issued desist notices to small miners working adjacent to Block C at Merelani in an attempt to curb the illegal mining that has dogged Richland's operation.

While it welcomed the Tanzanian government's move Richland said it cannot employ a full workforce until the area is fully secured and the illegal miners ousted. "As Richland monitors the Tanzania situation we shall move ahead with our recently announced sapphire re-development in Queensland, Australia," the company said.

Richland is also looking at a sale of online retail arm the Tanzanite Experience as part of its strategic review, while its Tsavorite project has also been earmarked for sale or joint venture.Terms have also now been agreed over a binding agreement for the joint development of the Arusha graphite deposit in Block C and Kibaran's next door Merelani-Arusha Graphite Project. Richland Resources and the State Mining Corporation (STAMICO) operates block C at Merelani.Bernard Olivier, Richland Resources' chief executive, said: "The global retail market for coloured gemstones is thriving and we are taking active steps to deliver value from our mining expertise and marketing relationships."Merelani has the potential to be very profitable for TML and STAMICO, and the restructuring and efficiency programme are yielding immediate results."

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