Fresh data reveal other side of mining

The African Barrick Gold’s (ABG) Vice President for Corporate Affairs, Mr Deo Mwanyika.PHOTO|FILE 

By Veneranda Sumila The Citizen

In Summary

In 2012 gold output in the country was 35.9 tonnes equivalent to 73 per cent of national output for the year under review.

Dar es Salaam.As public pressure mounts criticism against the mining sector, fresh stunning details have emerged -- last year alone major gold miners paid $372 million (Sh606 billion), spent $185 million (Sh301 billion) in salaries plus another $25 million (Sh40.7 billion) invested in community development.

These data also shows that in 2012, total expenditure by major mining firms was $2.104 billion, but 70 per cent of this money or $1.608 billion was spent in the country.

According to fresh details issued by the World Gold Council (WGC) mining companies produced 35.9 tonnes of gold valued at $2.3 billion (Sh3.7 trillion) in 2012.

The taxes paid and their amounts in brackets are royalties ($90 million), corporation tax ($198 million) and other taxes ($84 million)
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The Citizen couldn’t independently verify the accuracy of these data though they are released by World Gold Council. The UK-based association -- which operates in India, the Far East, Europe and the USA and whose members comprise of the world’s leading gold mining companies -- says out of $2.1 billion that gold miners spent in 2012, a total of $1.6 billion was spent inside the country.

Titled Responsible Gold Mining and Value Distribution: A Global Assessment of the Economic Value Created and distributed by members of the World Gold Council, the report says out of the $1.6 billion, $198 million was paid as income tax to the government of Tanzania. “The data of Tanzania in this report comprises of five producing and one non-producing operations,” says the report.

In 2012 gold output in the country was 35.9 tonnes equivalent to 73 per cent of national output for the year under review.

In total, according to the report, gold miners spent some $1.9 billion. This, according to the report was equivalent to 6.9 per cent of Tanzania $29 billion gross domestic product (GDP) - the total market value of goods and services produced in Tanzania in 2012.

A huge chunk of the money gold mining firms spent in the country was payment to businesses in which a total of $1 billion (Sh1.6 trillion) was spent.

Gold mining firms concurred with the report findings, saying their contributions to the economy needs to be viewed from various angles.

“We welcome the findings of the World Gold Council report which highlights the significant contribution mining companies make through expenditure in country,” says the Geita Gold Mine (GGM) communications manager, Mr Tenga Tenga.

He said GGM’s parent company, AngloGold Ashanti has invested about $600 million in Geita since 2000, noting that the mine has paid some $683 million in direct contributions to the Tanzanian government through taxes and royalties in the same time period. “As for 2012 alone, GGM paid $213.8 million in royalties, income tax and other contributions. This represents the second highest tax contribution across our global portfolio, and second only to South Africa where we have a much larger operating base,” he said.