Jobs at risk as gold price continues to fall

By Lusekelo Philemon

  Mines consider suspending activities

Eng Ally Samaje

Over 1,200 mine workers employed in two of the major gold mines in the country are in danger of being retrenched following the drastic fall of gold prices in the world market.
“We are very concerned with the gold price trend in the global market,” said Eng Ally Samaje, who is the Acting Commissioner for Minerals.

Samaje raised the concerns here yesterday soon after presenting a paper at a seminar organised by MS Training Center for Development Cooperation (MS-TCDC), and brought together various mining stakeholders from across the continent.

The commissioner cited that mines, which are in danger of suspending operations are, the North Mara and Buzwagi, both operated by the African Barrick Gold.

“Barrick Gold Company has already expressed concerns to us, but they are yet to decide whether to continue or suspend mining operations in those two sites,” he explained.

If the multinational company would opt to suspend business, it is estimated that more than 1,200 workers will be forced to go home for unpaid leave.

“This will have a very negative impact to the country’s economy and the well-being of employees working in the two mines,” Samaje said noting that the government also stands to lose revenue that it would otherwise acquire from mining related taxes.

“But, we still hope that it is not going to happen…and Barrick Gold also are still watching the price trend,” he said, attributing the drastic fall of gold prices with the low demand of the precious metal in the global market.

Efforts to contact African Barrick Gold proved futile. ABG, the biggest investor in Tanzania's mining sector, posted total revenues of $2.32 billion (more than 3.7 trillion shillings) in 2011 and 2012.

The mining giant, which offers some of the highest-paying jobs in Tanzania, spent $313 million (over Sh500 billion) on its employees over the past two years which accounts for 14 percent of its total revenue.

Around 91 percent of ABG's total workforce of 5,649 employees comprises of Tanzanian nationals, with the company aiming to further reduce its expatriate labour in 2013.
Payments to the Tanzanian government totaled $285 million (over Sh460 billion) during the period that is 12 percent of the company's total revenue.

Since 2010, ABG's direct contributions to the Tanzanian economy have reached $1.5 billion (overSh2.4 trillion).

In 2012 alone, the company contributed $700 million (over Sh1.1 trillion) to the country's economy, representing 2.5 percent of the GDP.

This year, the company plans to invest a further $445 million (over Sh720 billion) to sustain and expand its assets base in the country where it has for gold mines - Bulyanhulu, North Mara, Buzwagi and Tulawaka. 

SOURCE: THE GUARDIAN