‘Makinikia’ and economic liberation: The untold story – 3

  

By Dr Dalaly Peter Kafumu

Summary

·         By 1987 the DTT instead of undertaking exploration and mine development, it heavily engaged in dubious and opaque gold buying activities from small scale miners in Artisanal and Small Scale Mining (ASM) areas

Last week we saw the efforts of the government to engage foreign companies to bring in the country expertise and funding to assist Tanzania in building capacity to enable the nations profitably exploit its mineral resources.

This week we continue with the story of engagement of foreign companies and institutions to help Tanzania stand on its feet in exploiting its mineral resources.

Between 1980 and 1985 the UNDP funded exploration projects conducted large scale geological and geochemical reconnaissance surveys throughout the country.

These projects generated very important geological data-sets that became the guiding tool to most gold mineral exploration projects in the Lake Victoria gold fields and it later allowed some of world-class gold mines like the Bulyanhulu, Buzwagi, Tulawaka,Resolute and Geita mines to be established in Tanzania in the late 1990s to early 2000s.

Another notable foreign assisted project that was undertaken between 1984 and 1988 was the Dar Tardine Al Ummah (DTU) company based in Bahamas through the Dar Tadine (T) Ltd (DTT).

It entered into an agreement with the government to organise and fund gold exploration, mine development and gold trading in the Lake Victoria Goldfields areas that include Geita and Rwamgasa in Geita District, Musoma and Mara areas in Musoma and Tarime Districts and Iramba Sekenke areas in Iramba District.

Indeed the Dar Tadine Al Umma Limited (DTU) Company through the Dar Tardine (T) Limited (DTT) entered into an agreement with the government to explore, mine and trade gold in Tanzania to ensure the economy of the country grows to benefit the nation and its people.

By 1987 the DTT instead of undertaking exploration and mine development, it heavily engaged in dubious and opaque gold buying activities from small scale miners in Artisanal and Small Scale Mining (ASM) areas.

The gold buying activities were shrouded in exploitative secrecy, as the gold prices and the revenue obtained thereafter were all under-declared and in many instances the gold was illegally exported.

In this respect the DTT did not implement the most important requirement of the agreement of organising and funding gold exploration, mine development in Tanzania as per the agreement and this triggered the government to take legal actions against the company.

The Government of Tanzania then opened an arbitration case at the International Arbitration Chamber in Paris to terminate the agreements between the DTT and won the petition and the agreements were terminated.

At the same time as the agreements was terminated the Parliament of United Republic of Tanzania in 1988 launched a special inquiry to investigate what transpired during the implementation of the agreement between the government and the DTT.

Parliament discovered that the agreement between the DTU/DTT and the government of Tanzania became linked to a wider international financial conspiracy network that finally in the 1990’s ended up into a series of legal litigations in Swiss Courts and around the world.

The Parliamentary Committee Report recommended among other things that the government ought to be always on alert, careful and diligent in dealing with foreign companies in national mineral resource exploitation and management.

These series of failed undertakings once again pushed the Second Phase Government leadership that entered its second segment of leadership (1990 – 1995) to seek knowledge and understanding of the dynamics of the mining industry and how it works in globalised world.

Apart from entering into several mine development agreements for mineral exploration including the development of the Bulyanhulu Gold Mine that was entered in 1992 the government sought the assistance of the World Bank for institutional capacity building and the drawing of policy, legal and fiscal frameworks.

Next week we will dichotomise further these new World Bank assisted Mining Reforms of the 1990s that aimed at assisting the country to attract more foreign direct investments (FDI) and helping the mining industry in having a meaningful contribution into the economy towards economic freedom.