23 October 2017

Tanzania: Top Tanzanite Miner 'Ready' to Cooperate

Photo: Daily News
Tanzanite.

Arusha — TanzaniteOne Mining Limited, the largest miner of the rare gemstone, has bowed to the government pressure to address serious flaws unearthed recently by a parliamentary probe team.

These include many loopholes in the mineral supervision such as theft, embezzlement, corruption and lack of accountability which led the country losing million of dollars in undeclared or undervalued exports.

The company also says it is ready for a review of the existing joint venture agreement between it and State Mining Corporation (Stamico).

Reacting to a recent report by the special parliamentary committee that investigated the mining of tanzanite in the country, the Arusha-based miner affirmed it was ready for a win-win agreement with the government on the multi-million dollar tanzanite industry.

"We would like to take this opportunity to assure President John Pombe Magufuli that we will cooperate fully with the government and together we will ensure positive conclusion (of the negotiations) that will be of greater value to our nation," TanzaniteOne said a statement issued here on Saturday.

The statement signed by company secretary Kisaka Mnzava came hot on the heels of an agreement reached last week between the government and Barrick Gold, the majority shareholder of Acacia Mining firm, on the 50/50 profit sharing.

Saturday's statement was the first official response by TanzaniteOne since the government poked holes in the tanzanite industry seen to be notorious for tax evasion and illegal exports.

TanzaniteOne apparently avoided head-on collision with the government and instead affirmed its willingness to cooperate and partake in discussions with the government "in the spirit of good faith and transparency".

Two of the company directors, Mr Faisal Juma Shahbhai and Mr Hussein Gonga, could not be immediately reached yesterday for details.

But the firm, which entered into a joint venture with Stamico five years ago, but whose shares were bought by 100 per cent by Sky Associates, a Virgin Island consortium, maintained it was ready to negotiate with the government.

"We want the government to initiate the proposed discussions/negotiations," affirmed Mr. Mnzava, noting that this was the position of the Board and Management of the company's enthusiasm and eagerness "to jointly work with the government and reach a consensus".

The parliamentary team's report, which was presented to President John Magufuli on September 17, said Tanzania was losing billions of shilling each year from fraud in tanzanite mining and trading.

For instance, while Sh8 trillion was generated from tanzanite production between 1998 and 2017, records with Tanzania Revenue Authority (TRA) and the Commissioner of Minerals indicated that only Sh400 billion was collected by the government.

Dr Magufuli visited Mererani, on September 21 and expressed his dismay over the way the country was losing a fortune through undeclared exports of raw tanzanite.

Following the signing of the agreement between the government and Barrick Gold, President Magufuli last Thursday directed Constitutional and Legal Affairs minister Palamagamba Kabudi to immediately kick-start similar negotiations with tanzania and diamond miners.

In a surprising move, TanzaniteOne welcomed the proposed negotiations, which are not expected to be an easy ride given the myriad of underworld deals which have been associated with the otherwise lucrative tanzanite industry.

"We as a company are fully behind the initiative of our president to ensure tanzanite and other natural resources benefit the nation and each and every Tanzanian," the company said, noting that Tanzanians have to benefit from the rare gemstone.

During his visit to Mererani, the only place in the world where tanzanite is found, President Magufuli announced an array of measures aimed at streamlining the mining and export of the rare gem.

The measures are generally aimed to curb illegal exports of tanzanite and ensure than only licensed dealers are involved in the tanzanite trade.

Although TanzaniteOne officials appeared to welcome the government government's expected tightening of tax evasion through illegal exports, the company has on a number of occasions claimed it was being unfairly targeted for criticism.

When hosting journalists from several media houses in Mererani on September 4 and 5, the firm denied that it was involved in the smuggling of tanzanite or tax evasion.

"It is equally wrong to call us the only large-scale miner. There are scores of tanzanite dealers hiding under the cover of small-scale miners yet they own huge investments in Arusha and mint millions of dollars from exports every month," said one of the company's directors, Mr Gonga.

He defended the company saying it paid due taxes and employed hundreds of people unlike other unlicensed miners who are not in the government account books. He added that at Mererani there were about 300 active mine pits.

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