Tanzania's pot of gold

The Bulyanhulu complex has Tanzania's deepest mine

By Roger Dean in Dar es Salaam

A huge new gold mine has been opened in Tanzania, making the country Africa's third largest producer of gold.

Bulyanhulu mine near the northern town of Mwanza, which now employs more than 900 people, is the biggest underground gold mine in the country.

It is owned by the Canadian company Barrick Gold Corporation and, after an investment of $280m, is forecast to produce about 400,000 ounces of gold a year

We have a third modern world-class mine in operation. This is a very exciting time in our country

Samuel Lwakatare

This will take Tanzania's annual gold output to more than a million ounces, bettered in Africa only by Ghana and South Africa.

Tanzania earned nearly $200m in tax revenues from gold mining last year, and Bulyanhulu will substantially add to that figure.

Samuel Lwakatare, chairman of the Tanzanian Chamber of Mines, believes the new mine will make an important contribution.

President Mkapa: Big mines should help small-scale miners

"We have a third modern world-class mine in operation," he is quoted as saying. "This is a very exciting time for our country."

But there is a consistent and growing murmur of dissatisfaction about the mining industry in general in Tanzania, and the successful gold mines are coming in for criticism too.

The Lawyers Environmental Action Team (Leat) believes the country is not getting good value from the vast amounts of gold being extracted.

It is obvious this investment is not of benefit to Tanzania. It transfers the country's resources outside

Lawyers Environmental Action Team

"It is obvious this investment is not of benefit to Tanzania," they said in an open letter. "It transfers the country's resources outside."

Leat is also lobbying for a share of the profits to go direct to local communities, including small-scale artisan miners who worked the area before Barrick bought the rights.

They argue that Barrick and other mining companies are both financially capable of paying up and morally responsible.

Local population

A group of MPs from Lake Victoria Zone, where many mines are situated, have made similar demands.

It should be the goal of every large-scale mining operation to foster co-operation and partnership with small scale miners

Tanzanian President Mkapa

At a recent meeting with Minister for Energy and Minerals Edgar Maokola-Majogo in Tanzania's official capital, Dodoma, they demanded a system of profit redistribution similar to that of Tanzania's National Parks.

The parks pay a quarter of their taxes direct to the local population, as a measure of compensation for restrictions on land use.

The government, however, may be unwilling to surrender this slice of the cake.

Placate

The MPs also accused the mining companies of trying to placate the people with relatively small development projects.

Mining companies often set up water facilities or build new roads in areas they operate in, but the MPs said that the size of the mining companies' profits made the developments projects look mean.

The MPs actions come against the backdrop of a suspicion among many people that some of their representatives have been seduced and compromised by the big mining companies.

Digging deep for gold

Speaking at the opening ceremony of the new mine, President Mkapa showed sympathy with the communities' case.

"It should be the goal of each large-scale mining operation to foster constructive co-operation and partnership with small-scale miners", he said.

But this Tanzanian Government has moved away from from its one-time socialist ideals.

It now prides itself on its free-wheeling economic credentials. Whether it will actually force the issue is far from clear.