GOXI

sharing in governance of extractive industries

PRESS RELEASE: ACACIA Urged to be more transparent to Tanzanians

PRESS RELEASE

 

ACACIA should be more transparent to Tanzanians

 

Dar res Salaam, Tanzania – 30th March, 2017: A stop order issued by Tanzania Government on March 3rd 2017 barring mining companies to export copper concentrates for smelting outside the country has significantly exposed Acacia, which exports the stuff from Buzwagi and Bulyanhulu mining projects.

 

Acacia statement opens a can of worms

On March 15th 2017 Acacia Chief Executive Officer (CEO), Brad Gordon responded officially pertaining to the Government order. The CEO is quoted expressing jittery for Acacia incurring loss of US$17 million (Tzs. 37 billion) in just two weeks of executing Government stop order. He is concerned if the stop order is maintained Acacia may fail to continue running operations because export of copper concentrates accounts for 50 percent of Acacia earnings from Buzwagi and Bulyanhulu mining projects. This statement exposes the vital information not previously disclosed to Tanzania Extractive Industries Transparency Initiative (TEITI). Actually, it opens a can of worms. Acacia is TEITI member with obligation to correctly disclose material production and Government payments information pertaining to its mining operations in Tanzania.

 

But reading Acacia statement we note the implication that Acacia had since TEITI launch (2009) disclosed only half the production and payments value data from Buzwagi and Bulyanhulu mining projects. And this sends bad signal to TEITI because it discounts material information and data compiled and published in the successive annual reports since 2011. The credibility of TEITI reports’ data and integrity of entire EITI work in Tanzania is exposed to irreparable risk if corrective remedies are not done in real time. Acacia has the obligation and should therefore come out immediately to patch up the anomaly.   

 

Acacia statement exposes a gap in the TEITI reports

The quantity of gold or money value declared as having been produced or earned by Acacia and therefore payments made to government in the form of royalties, taxes, fees, levies, duties and statutory contributions should be correctly captured and documented in the TEITI reports. However, that may not be the case when we evaluate inherent logic exposed by Acacia statement. The payment data documented in the TEITI reports from Pangea Minerals Ltd (Buzwagi) and Bulyanhulu only present half the story. None of the six TEITI reports (2008/09 – 2013/14), has documented either quantity or value of copper concentrates, which according to Acacia, account for 50 percent of Bulyanhulu and Buzwagi revenue combined.

 

The documented evidence available at TEITI indicates during the 2012/13 fiscal year, Pangea Minerals Ltd (Buzwagi goldmine) produced 205,240 ounces of gold worth Tzs. 520.9 billion (US$328,025,425) while Bulyanhulu goldmine produced 197,571 ounces of gold worth Tzs. 477.1 billion (US$300,413,402) (TEITI Report 5th, 2015:11). Again, the data documented during the subsequent fiscal year show no difference. Bulyanhulu is recorded to have produced 192,550 ounces of gold worth Tzs. 430.5 billion (US$265,884,907) while Pangea Minerals (Buzwagi) produced 198,995 ounces of gold worth Tzs. 384,539,239,000 (US$237,516,516) (TEITI Report 6th, 2015:10). Not only are the quantity and value of copper concentrates exported from Buzwagi and Bulyanhulu missing from the duo fiscal years’ TEITI reports, but also are entirely not documented in the previous four reports.

 

There is one more controversial issue, which previously, Acacia hadn’t disclosed yet, but it is implied in the statement. The statement underscores that Acacia exports (sells) copper concentrates to foreign buyers rather than sending the stuff for smelting outside the country where appropriate technology is available. This means the ownership title of copper concentrates changes from Acacia to a foreign buyer immediately the stuffs are exported. This notion is new to Tanzanians, who hitherto held common knowledge that Acacia sends copper concentrates to foreign countries with appropriate technology for smelting the stuff, which whatsoever, wouldn’t involve ownership title transfer from Acacia to a foreign entity. That being the case, Acacia would be expected to report such significant transaction to TEITI because copper concentrates and gold are materially different. The local media quoting persons involved in the export of copper concentrates from the Tanzania Mineral Audit Agency (TMAA), Tanzania Ports Authority (TPA) and Acacia officials estimate 50,000 [8ft (2.43m) x 8.5ft (2.59m) x 40ft (12.2m)] containers of copper concentrates have had been shipped annually.    

 

Our Position and recommendations

The Coalition of Tanzania Civil Society Members of global EITI Association (TEICS) considers the amount of money raised from export of copper concentrate but Acacia hadn’t reported to TEITI for public scrutiny is significant enough to alter both TEITI reports and Government records of payment received from Acacia. Disclosure of these payments is even more urgent than ever considering Acacia nonpayment of Corporate Income Tax (CIT) since the company started (1998) operating in Tanzania up to 2016, on the ground that the company is still recuperating losses incurred during the investment startup phase.

         

We, TEICS, recommend and call upon:-

 

1.That Acacia should disclose all details related to quantity and proceeds obtained from exports of copper concentrates since 2001 to 2017. Data presentation should comply with the EITI recommended pattern of data disaggregation – project by project and year by year – to allow and facilitate ease use by TEITI and Government.

 

2. That TETI Committee should immediately start retrospective review and upscale all previous TEITI reports’ data to accommodate significant material information disclosed by Acacia reflecting proceeds from annual exports of copper concentrates.

 

3. That the Government of the United Republic of Tanzania should assume leadership to evaluate the Mineral Development Agreement (MDAs) entered with Acacia to establish parties’ consistency and compliance with agreed terms therein, and thereafter, in consultation with Acacia, correct inconsistencies in the MDAs, if any, and ensure Acacia repays all the unpaid royalties, taxes, fees, levies, duties and statutory contributions resulting from exports of copper concentrates for entire period effectively from 2001 to 2017. Thorough and water-tight evaluation of MDAs and payments to the Government may even involve instituting forensic auditing.   

 

4.  That the media should follow up and report to public about the actions taken by Acacia, TEITI Committee and the Government to correct the anomaly caused by Acacia not disclosing copper concentrates export business to TEITI and Government.

 

 

Issued and signed on behalf of TEICS members today, 30th March 2017, by

 

Bubelwa Kaiza

Coordinator

 

Notes to Editors

 

Background to TEICS

TEICS is the Coalition of Tanzania Civil Society Members of global EITI Association composed of 28 member organisations.

 

TEITI

TEITI is the Tanzania Extractive Industries transparency Initiative constituted by equal number of government, companies’ and civil society constituencies representatives. TEITI is established by act of parliament (Act No. 23/2015) and it is mandated to collect and analyse mining, oil and gas production and payment data or material information compiled to publish reports annually, which facilitates public scrutiny and in effect promoting the transparency required to ensure good governance of natural resources. Under TEITA Act, mining, oil and gas companies are required to disclose to TEAITA Committee, their incomes from extractive operations, beneficial owners, corporate social responsibility contributions, statutory contributions, royalties, taxes, fees, duties, levies and other payments made to the Government. TEITI is governed by TEITA Committee with members nominated by respective constituencies. Tenure of office is three years.

 

Country status

Tanzania is one of 51 EITI candidate countries, which the country joined in 2009. By December 2012 Tanzania was declared EITI compliant and has by November 2015 published 6 EITI reports, covering 2008/09 – 2013/14 fiscal years; disclosing the Government to have received the total of US$ 2,516,283,670 revenue from mining and natural gas companies. The respective fiscal years’ revenues shown in brackets are as follows: 2008/09 (US$ 102,110,000); 2009/10 (US$ 309,407,926); 2010/11 (US$ 329,804,744); 2011/12 (US$ 468,000,000); 2012/13 (US$ 569,957,000); and 2013/14 (US$ 737,004,000).

 

 

 

Communication

Bubelwa Kaiza

+255 687047111

bubelwa.kaiza@gmail.com

Views: 257

Add a Comment

You need to be a member of GOXI to add comments!

Join GOXI

Conveners

           GOXI Partners

Translate

Videos

  • Add Videos
  • View All

© 2017   Created by Kobina Aidoo.   Powered by

Badges  |  Report an Issue  |  Terms of Service