25 August 2014

Tanzania: Gold Firm Marks First 'Hit' With Grandiose Plans

Mwanza — A SUBSIDIARY of the State Mining Corporation (STAMICO), Stamigold, is set to import new heavy duty mining equipment worth 5.5 million US dollars (about 8bn/-) as it celebrates its first gold production.

Acting Stamigold Biharamulo Mine Manager, Mr Dennis Ssebugwao, said that the procurement of its own machineries will gradually phase out dependence of the hired equipment from the private companies.

He mentioned the machineries in the final processes of shipment as two excavators and two dozers as the company plans to part with hired machines in phases -- hopefully within six months to one year from now.

"We still need huge capital to be able to run profitably so buying our own machineries and getting rid of the privatelyowned ones is some of the strategies that we have in place for the time being.

We hope that if all goes well, we will achieve that," Mr Ssebugwao said. To start with, he said, Stamigold will now be able to perform the finishing stage of the quality gold between 85 per cent and 90 per cent.

According to him, to attain the best price in the world market, the gold will have to be refined first -- and that will be performed by foreign experts. Stamigold is optimistic, however, that the market won't be that bad as it arranges to export its gold through the London International Gold Market, Mr Ssebugwao noted.

The company anticipates that it will take some two to seven years in active mining as studies have indicated at least 82,000 ounces of the gold deposits already explored will be mined within that period alone.

"Price per ounce is 1,300 US dollars as per currentworld price, so the simple calculations may tell you where we are heading if you slash out the production costs of 900 US dollars on average," he observed.

However, Mr Ssebugwao told the Minister for Energy and Minerals, Professor Sospeter Muhongo, that the company was facing a number of challenges in realising its ambitious objectives.

He mentioned some of them as unavailability of most equipment for mining and gold processing as it has to be imported and hence very expensive.

But to make it worse, he said, there are a lot of bureaucracies at home where it has proved difficult for the company to obtain permits for the equipment needed for the day-to-day operations. Competition between other mining companies in employing qualified engineers is another issue, making it difficult to retain the best and competent ones.

Apart from assuring the government maximum support, Prof Muhongo challenged Stamigold to hire best cream and pay them on the basis of productivity and qualifications one possesses.

"The system of offering salaries is soon changing in the country in which it is input and what a staff can offer that will be highly considered apart from the professional qualifications," he said.

He challenged STAMICO to make sure the top positions at Stamigold are filled, acting staff confirmed or best managers found to fill them. Prof Muhongo said the country's dream is to see Stamigold performing like other giant mining companies currently investing in Tanzania.


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