Nominee for the strangest mining-related event of the week goes to the release in Tanzania of a report entitled A Golden Opportunity? How Tanzania is failing to benefit from Gold Mining” I cannot find a copy of the report on the web, so I have to rely on a series of badly written articles to try to find out what the report says.
Background to the report appears to be this: “The research is published by the Christian Council of Tanzania (CCT) the National Council of Muslims in Tanzania (BAKWATA) and the Tanzania Episcopal Conference (TEC). It was funded by the Norwegian Church Aid and Christian Aid.”
The objective of the report is clear: “It builds a powerful case for continued activism in trade and economic justice in line with various Human rights instruments that call for a country’s wealth and natural resources to benefit primarily local communities.”
This is Africa; thus nothing should surprise or distress us. Why should I bat an eyelid when the report establishes that mining companies are making money in Tanzania, that not enough tax is paid, that vast sums go missing as the money approaches the government, and that the locals get paid peanuts. If you can work your way around the convoluted web of poor laws, unenforced regulations, bribed and corrupted officials, and profitable mining companies, that are reflected in the following extract from one of the reports I read, let me know:
According to the report, a total of $3 billion was taken out of the country by mining investors while $400 million was lost due to tax incentives offered to mining companies. A further $700 million, according to the report, was lost in dubious circumstances, mainly because of lack of key documents. The report shows that the country exported gold worth more than $2.5 billion in the past five years while it has received an average of only $21.7 million a year in royalties and taxes on these exports, which is less than 10 per cent of the annual total value. On average, the three per cent royalty earns the Government about $17.4 million a year, and raising the royalty to 5 per cent would have increased Government revenue by $ 61 million in the past seven years. An increase to 7.5 per cent would have increased revenue by $131 million, while an increase to 10 per cent, would have earned the country over $300 million per year.
Of course everybody involved is playing around and playing loose: “The report reveals that Government figures show that not a single gold mining company in the country has paid the corporate tax rate of 30 per cent on profits because they have consistently declared losses. It says, however, that Anglo Gold Ashanti and Barrick companies’ records clearly show that both companies are making profits in Tanzania that should have netted the Government at least $57 million in corporate tax.”
The fun parts of the reports are the snippets on the response of the religious to the report:
- Qrmulf Steen, secretary-general of the Christian Organisation in Norway, who represented foreign church leaders, said natural resources must not be played around with. He cited the case of Norway saying, “When we wanted to develop, the first thing was to control the natural resources.”
- Mwanza-based Muslim cleric Sheikh Hashim Fereji said mines were a blessing from God that were supposed to be used wisely for the benefit of all Tanzanians.
We really need to get a copy of the report to wade our way through this thicket of numbers convoluted by non-mathematically-inclined reporters. I quote for the shear fun of it:
A total of 400,000 artisanal miners have been thrown out of work due to a multiplicity of multinational gold mining companies since the 1990s, a study has revealed. The study says this has been possible because the law and policies governing the mining sector allow mining companies to employ an unlimited number of foreigners compared to a minimum of five people in other sectors. At least each of the mining companies has between 6 and 9 per cent of its workers from abroad. According to the study, Barrick`s Bulyanhulu gold mine has 1,971 employees, 9 per cent of whom are expatriates. The Geita mine has employed 200 expatriates out of its 3,200 workforce. It shows that the number of artisanal miners has greatly declined since the 1990s when large-scale mining firms were established. “When the first two large-scale gold mines at Nzega and Geita were started, a total of 30,000 artisanal miners were removed,“ the report says in part. The study claims that rather than creating employment, large-scale mining in Tanzania has been responsible for creating mass unemployment. So far the mining sector has employed only 0.2 per cent of Tanzania`s workforce.
How one creates mass unemployment by increasing operations that involve a mere 0.2 per cent of the work force is beyond me. The tragedy of this report is that they may have a point, that they may have ways of improving things. But the absence of free dissemination of the report, the silly statements surrounding the report, the prejudice and greed that affects its analyses and conclusions, reduces the whole effort to another of those activities simply to be ignored or dismissed as rantings and ravings. I reserve the right to change my opinion if ever I get a copy of the report and on reading it appears more logical and even-handed than the reports thereon.
