ENERGY & MINERALS

by Roger Nellist

President Magufuli has reappointed Professor Sospeter Muhongo as Minister of Energy and Minerals. Muhongo had resigned from the position last January (see TA111).

Mining troubles
The big gold mining company Acacia Mining plc reported in October that it had suffered a US$13 million net loss in the third quarter and announced urgent cost-saving measures to avert further financial difficulties. Acacia – which is listed on the London and Tanzanian stock exchanges – operates the Bulyanhulu, Buzwagi and North Mara mines and employs a total workforce of more than 6,000 people in Tanzania.

Acacia’s CEO, Brad Gordon, told company staff that “these are challenging times, with gold prices dropping from US$1,800 per ounce three years ago to less than US$1,100 during the September quarter”. High operating costs and lower output also contributed to the loss. Its gold production in 2015 was likely to be only 720,000 ounces compared with the previous forecast of 750,000 – 800,000 ounces. The company warned of job losses, pay freezes/cuts and other efficiency measures by the end of 2015.

Meanwhile, in Manyara region in September the long-standing conflict between artisanal tanzanite miners and a large mining company, TanzaniteOne, led 500 artisanal miners to protest on the streets after the Government suspended tanzanite mining in some areas. The company is alleged to have encroached on the artisans’ mining areas and the regional miners’ association has called for the Government to hand over its 50% stake in TanzaniteOne to the artisans. The regional authorities warned the miners not to take the law into their own hands but await the outcome of an investigation into the issue.

Mining operations can be difficult and dangerous. On 5 October six small-scale miners were trapped and feared lost, and others killed, when a mine pit in which they were working collapsed and buried them at the Nyagalata gold mine in Kahama District. Incredibly, more than 40 days later, five of the six were discovered alive though in very bad condition under the pit, whilst the sixth had died. They had survived by eating tree roots and drinking water that that they collected in their helmets as it trickled through openings in the rocks. The Ministry of Energy and Minerals reiterated the need for small-scale miners to use modern mining equipment to prevent such disasters in the future.

In August the Geita gold mine became the first in Africa to enter into a Fair Trade gold sales agreement with the UK that, among other things, requires producers to abide by modern health and safety standards. The more than 200 miners at the mine are expecting this new deal to improve their working conditions and lives which, for many thousands of miners in Tanzania, are harsh.

Better energy news
In September, TANESCO switched on its Ubungo gas power plants to start generating electricity from the natural gas that is being transported to Dar from Madimba in Mtwara Region. The then Minister of Energy and Minerals, George Simbachawene, said that by end October gas would be contributing about 335 MW of electricity to the national grid – a big step forward to producing a permanent all-year-round solution to power shortages in the country. The Minister lauded this “huge achievement” and reminded that the project, which had cost US$1.225 billion, was fully funded by the Government and supervised by the Tanzania Petroleum Development Corporation.

Over the last decade smaller amounts of electricity have been generated using gas piped from Songo Songo island. In coming years, the government will invest in further gas-fired power plants, both to boost electricity supplies for a growing economy and also to reduce expensive oil imports and save foreign exchange.

In October at the University of Dodoma President Kikwete launched Tanzania’s largest solar energy project as well as a College of Renewable Energy and Sustainability. The project, which will be operational in 2016, will be the largest solar farm built on a University campus anywhere in the world and is expected to generate up to 55 MW of electricity to supply Dodoma Region. Both the college and the project are being undertaken through strategic partnerships with Ohio State University and a USA renewable energy company. Together, they should also help pump clean water to rural Tanzanians. The college will establish Tanzania as an African leader on renewable energy – training technicians, scientists and entrepreneurs in sustainable energy supplies.

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