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Barrick, AGA on defensive
By J. MWAMUNYANGE
THE EAST AFRICAN
Posted Saturday, November 29 2008 at 09:58
Two of Tanzania's largest mining companies have come out fighting over allegations levelled against them in a report published recently by two activists.
In the report, A Golden Opportunity? How Tanzania is failing to benefit from gold mining, published by the Christian Council of Tanzania, the Tanzania Episcopal Conference and the National Council of Muslims in Tanzania, multinational companies are accused of plundering mineral resources at the expense of ordinary Tanzanians courtesy of some extremely lenient legislation.
The authors, Mark Curtis and Tundu Lissu, state that minerals now account for nearly half the country's exports, dwarfing coffee.
Having produced only two tonnes of gold in 1998, by 2005 Tanzania was producing 50 tonnes.
"Yet this boom exists on paper only, and ordinary Tanzanians are failing to benefit from it, both because of the country's tax laws and the practices of the leading mining companies," say the authors in their 56-page report.
Lissu and Curtis categorically state: "Our analysis, based on careful reading of the evidence, is that the country is being plundered of its natural resources and wealth."
The religious organisations that have published the report state in their introduction, "The situation in the mining industry today has tainted the picture of human dignity. The oppression seems to have risen to a point that threatens the peace of communities... In this report we show how we are falling into a trap in Tanzania, killing the future hopes of our next generations. We show how in our country, some people prefer gold to human rights. Gold is the source of their joy, not the cry of the people."
Curtis and Lissu write, "The gold mining industry in Tanzania is dominated by two multinational mining companies – the Canadian company, Barrick, and the South African firm AngloGold Ashanti (AGA). Company figures show that AGA has paid taxes and royalties totalling $144 million in 2000-07 and over the same period has sold around $1.55 billion's worth of gold, meaning that it has paid the equivalent of around 9 per cent of its exports in remittances to the government. Barrick, meanwhile, does not state on its website how much in taxes and royalties it pays to the Tanzanian government - our calculations show that it is paying a figure equivalent to around 13 per cent of its export sales in remittances to the government."
They quote, "a government-contracted independent audit conducted by Alex Stewart Assayers (ASA) in 2003, and leaked to the media in 2006, alleged that four gold mining companies, including Barrick and AGA, overstated their losses by $502 million between 1999-2003, indicating that the government lost revenues of $132.5 million.
The audit also noted that thousands of documents were missing that would have shown whether royalties, valued at $25 million were in fact paid." However, Barrick Gold Corporation and AngloGold Ashanti have countered this and other allegations.
A statement from Barrick said the report, "is basically an advocacy piece by a hired Tanzanian anti-mining activist which encourages the government of Tanzania to extract much higher taxes, rents, and royalties from Tanzania's nascent gold mining industry irrespective of its impact on that industry, or the benefits that flow from it.
"It is not clear to us why it would be posted on a human-rights website. While mining fiscal policy is certainly a fair issue for public debate in Tanzania, it is hard to see how Tanzania's very conventional existing mineral investment laws, including its current mining tax regime, constitute a violation of human rights."
AngloGold Ashanti also responded to the alleged negative social impacts of the tax practices used by the company's Tanzanian operations, noting, "On a general level, it needs to be understood that the investment required to bring a mine such as Geita into production is significant, particularly in an environment where mining is not an established area of economic activity and where investment needs to include the development of local infrastructure."
By J. MWAMUNYANGE
THE EAST AFRICAN
Posted Saturday, November 29 2008 at 09:58
Two of Tanzania's largest mining companies have come out fighting over allegations levelled against them in a report published recently by two activists.
In the report, A Golden Opportunity? How Tanzania is failing to benefit from gold mining, published by the Christian Council of Tanzania, the Tanzania Episcopal Conference and the National Council of Muslims in Tanzania, multinational companies are accused of plundering mineral resources at the expense of ordinary Tanzanians courtesy of some extremely lenient legislation.
The authors, Mark Curtis and Tundu Lissu, state that minerals now account for nearly half the country's exports, dwarfing coffee.
Having produced only two tonnes of gold in 1998, by 2005 Tanzania was producing 50 tonnes.
"Yet this boom exists on paper only, and ordinary Tanzanians are failing to benefit from it, both because of the country's tax laws and the practices of the leading mining companies," say the authors in their 56-page report.
Lissu and Curtis categorically state: "Our analysis, based on careful reading of the evidence, is that the country is being plundered of its natural resources and wealth."
The religious organisations that have published the report state in their introduction, "The situation in the mining industry today has tainted the picture of human dignity. The oppression seems to have risen to a point that threatens the peace of communities... In this report we show how we are falling into a trap in Tanzania, killing the future hopes of our next generations. We show how in our country, some people prefer gold to human rights. Gold is the source of their joy, not the cry of the people."
Curtis and Lissu write, "The gold mining industry in Tanzania is dominated by two multinational mining companies – the Canadian company, Barrick, and the South African firm AngloGold Ashanti (AGA). Company figures show that AGA has paid taxes and royalties totalling $144 million in 2000-07 and over the same period has sold around $1.55 billion's worth of gold, meaning that it has paid the equivalent of around 9 per cent of its exports in remittances to the government. Barrick, meanwhile, does not state on its website how much in taxes and royalties it pays to the Tanzanian government - our calculations show that it is paying a figure equivalent to around 13 per cent of its export sales in remittances to the government."
They quote, "a government-contracted independent audit conducted by Alex Stewart Assayers (ASA) in 2003, and leaked to the media in 2006, alleged that four gold mining companies, including Barrick and AGA, overstated their losses by $502 million between 1999-2003, indicating that the government lost revenues of $132.5 million.
The audit also noted that thousands of documents were missing that would have shown whether royalties, valued at $25 million were in fact paid." However, Barrick Gold Corporation and AngloGold Ashanti have countered this and other allegations.
A statement from Barrick said the report, "is basically an advocacy piece by a hired Tanzanian anti-mining activist which encourages the government of Tanzania to extract much higher taxes, rents, and royalties from Tanzania's nascent gold mining industry irrespective of its impact on that industry, or the benefits that flow from it.
"It is not clear to us why it would be posted on a human-rights website. While mining fiscal policy is certainly a fair issue for public debate in Tanzania, it is hard to see how Tanzania's very conventional existing mineral investment laws, including its current mining tax regime, constitute a violation of human rights."
AngloGold Ashanti also responded to the alleged negative social impacts of the tax practices used by the company's Tanzanian operations, noting, "On a general level, it needs to be understood that the investment required to bring a mine such as Geita into production is significant, particularly in an environment where mining is not an established area of economic activity and where investment needs to include the development of local infrastructure."