Tanzania: Three Mining Firms Sued for Environmental Pollution

By Faustine Kapama

MWANZA-based mining company, Bismark Hotel Mining Company Limited, has sued three giant gold mining companies, demanding $47.2m (about 108bn/-) compensation for allegedly environmental pollution caused by illegal artisanal miners in Geita Region.

The three mining companies, which have already lost an application for over 3.3bn/- as security for costs in a compensation suit pending before the High Court in Dar es Salaam, are Pangea Minerals Limited, Acacia Mining PLC and Barrick Gold Corporation.

In a recent ruling delivered by Judge Yose Mlyambina, the three mining companies, as defendants, had sought for orders requiring, among other things, Bismark Hotel Mining Company Limited to deposit in court as security of costs $1,416,000 before the determination of the suit.

Defence counsel had submitted that Bismark Hotel Mining Company Limited, the plaintiff in the suit, might not be able to settle the costs of clients in a civil case No 165 of 2019.

The defendants' anxiety was based on the grounds that the plaintiff was unable to pay legal costs associated with private adjudication proceedings and had made an admission that he had no alternative source of funds to meet costs relating to the hearing of the matter and that of witnesses.

In his ruling, however, the judge dismissed with costs the application for lacking merits. He found an old principle and with no international development bearing the defendants' argument on a need to deposit security for costs based on the plaintiff being a foreigner and had no immovable property in Tanzania.

"The concern should be limited to affordability of cost payment. Any company whether is a foreign or local, if it is found to be unable to pay costs at the end of trial, the court has a sole duty to order the deposit of security for costs. I find the application lacks merits. (It) is dismissed with costs," he ruled.

It is stated that the defendants had filed a chamber summons on February 27, 2020, for among other orders, that the plaintiff in civil case No 165 of 2019 be ordered to provide security for defendant costs estimated at $1,416,000 or a bank guarantee from the internationally recognised bank.

Facts show that on September 13, 2019, the plaintiff instituted a civil case No 165 of 2019 before the court against the defendants and three others, claiming for $47,200,000 compensation.

Such compensation allegedly arising from environmental pollution due to gold mining and prospecting activities carried out by illegal artisanal miners in Siga Hills, Nyang'hwale District, Geita Region in Tanzania.

Before filing the suit, on May 28, 2019, the plaintiff instituted a miscellaneous civil cause No 292 of 2019 against Pangea Minerals Limited and two others seeking, among other orders, stay of private adjudication proceedings between the two parties.

The basis of the adjudication is the allegation by the plaintiff of the presence of illegal artisanal miners in Siga Hills, Nyang'wale District, Geita Region, which caused environmental pollution to the area.

A procedural timetable for the adjudication, including the dates of the final hearing, was fixed by adjudicators in the procedural order and the final hearing was to take place in May 2019, and over several weeks in both London and in Dar es Salaam.

Ultimately, following the exchange of written submissions the parties agreed an oral hearing would take place from May 27, 2019 to June 2, 2019 and be held exclusively by the court in the miscellaneous civil cause No 292 of 2019.