The Exchange - East Africa's Source for Financial News The Exchange MAY 2017 - FINAL (1) | Page 7

MAY 2017
TANZANIA
7.
Buzwagi faces closure, compelled to list
By Madodi Junior
D
ar es Salaam. Despite undergoing
the process of mine closure,Buzwagi
Gold mine, under the multinational
mining corporation Acacia, is obliged to
list on the Dar es Salaam Stock Exchange
(DSE), according to the Commissioner for
Minerals, Ali Samaje.
Mr. Samaje recently said that under the
mining Act of 2010 and its subsequent
regulations on compulsory listing at DSE
all mining companies owned by Acacia,
including Buzwagi, North Mara and
Bulyanhulu had to list on the DES.
“It must be noted that although Acacia has
cross-listed shares in the DSE, it must list
30 per cent of shares it owns in the mining
companies”, said the Commissioner.
Each mining company possessing the
Special Mining License (SPL) must list
shares at DSE come the end of August,
Mr. Samaje said when he was requested to
clarify on the matter.
The
government
had
already
communicated on that issue with all
mining companies that possess the SPL.
In February this year the government
set a deadline of six months for all mining
companies with SPL to go public in order
to enhance economic empowerment of
Tanzanians through shares in big mining
companies.
Acacia is facing further complications,
however, with the news that Tanzania has
brought forward the requirement to have a
minimum of 30 per cent of its stock for local
people to own from October 2018 to end-
August.
Acacia Vice-President, Deo Mwanyika
said that they were still under business
uncertainty, because currently they
are contemplating to negotiate with
the government on such issues, apart
from the government’s ban on exporting
metallurgical concentrates.
Engineers at Buzwagi mine site in Geita, Tanzania. Photo Source: acaciamining.com
The mining conglomerate has reported
that its shares in gold mining have slumped
again after it revealed the $60million
(£47million) cost of an export ban in its
main base of Tanzania.
On 2nd March this year the government
ordered a halt to all shipments of gold and
copper concentrate out of the country as
it seeks to develop a domestic smelting
industry.
Acacia warned that the order would affect
30 per cent of its revenues, and later said
it was losing $1million (TSh2.2 trillion)
a day with the ban. Presenting its first-
quarter numbers, chief financial officer
Andrew Wray admitted the cost so far was
$60million.
Acacia also reported that shares fell more
than seven per cent to 422 per cent. The
stock is down 20 per cent since news of the
ban broke.
Currently 64 per cent of Acacia is owned
by Canadian mining group Barrick, with
the rest held by international investors.
Government, institutions to
join forces in commercializing
agriculture
By Mariam Kibwana
T
anzania needs to invest in
agriculture as a source of income
generation as well as developing
the national economy. Investing in
commercializing agriculture to meet
economic growth does not only make
sound sense, it makes for sustainable
empowerment.
For Tanzania to meet its Vision 2025
goals, investing in agriculture is essential.
The government should now look into
ways of modernizing agriculture together
with encouraging more investments in
agricultural sub-sectors. Dairy industry
being one of them, should receive more
attention from the government and various
stakeholders for it to achieve sustainable
development.
Smallholder farmers, the majority of
whom are youth, should be empowered
for generating income and developing
business opportunities. Recognizing the
limited support from the government and
the need to commercialize agriculture for
future growth, various institutions have
lended their support to entrepreneurs
and smallholder farmers to ensure they
develop capacity-building skills to run
their businesses through agricultural
production.
Findings shows that Tanzania ranks
third in East Africa in milk drinking, with
per capita consumption of 45 litres per
person annually against 130 litres and 80
litres for Kenya and Uganda respectively,
due to low awareness on the nutritional
importance of milk to one’s health.
The Tanzania Federation of Cooperatives
(TFC), has been supporting the dairy
industry by conducting various projects
aiming at empowering the youth to
advance in dairy farming, not only
for home consumption but also for
generating business opportunities. TFC
is the national co-operative umbrella
organization that promotes, serves
and coordinates the development and
prosperity of all cooperative societies in
Tanzania Mainland.
A new model dubbed ‘Service Provider
Enterprise’ (SPE) has been initiated by
the TFC through the project on Support to
Farmer Organizations in Africa Program
(SFOAP), as an innovative market-driven
solution to combat the lack of training and
extension services in the dairy sector and
develop Tanzania’s dairy sector.
SFOAP is a five-year project sponsored
by International Fund for Agriculture
Development (IFAD), European Union
(EU), Swiss Agency for Development and
Cooperation (ADC), France Development
Agency (AFC) with Eastern Africa
Farmers’ Federation (EAFF) as one of
the organizations identified to implement
SFOAP.
Currently in its second year of
implementation, the project has been
introduced in Nronga Women Dairy
Cooperative Society in Moshi Machame, in
the Kilimanjaro region and Tanga Dairy
Cooperative Union (TDCU) in Tanga region.
Acacia is continuing to stockpile
concentrate while it negotiates the
resumption of exports. “If we didn’t see
a route to resolve the issue, we wouldn’t
keep stockpiling,” Acacia head of corporate
development and investor relations,Mr.
Wray was quoted as saying.
He insisted the company had enough cash
on the books to absorb the extra cost but
added that operations were under “daily
review”.
Acacia’s North Mara mine, which
produces semi-pure bars but no concentrate,
is unaffected by the ban.
The country is the fourth largest gold
producer in Africa after South Africa,
Ghana, and Mali, but is now under high
risk of losing huge gold investments in case
Acacia pulls out.
In 2011, Acacia listed its shares from
London Stock Exchange on the DSE,
which represented an important step
in establishing a framework to promote
broader liquidity and ownership of shares
With the new model, a total of 20 SPEs have
been recruited, 10 from each co-operative.
According
to
project
coordinator,
Ahadiel Mmbughu, last year the youth
went to Kenya for a one-week training
session to motivate and strengthen
their farming knowledge and practices.
“Through the theoretical and practical
training undertaken by the SPE youth,
they can transfer knowledge, train others
and sustain the skills,” he said.
Some of the topics covered included
SPE formation and network, leadership
and governance, dairy routine at a dairy
farm, fodder establishment (fodder seeds
classification, varieties and nutrition),
fodder preservation (surface and tube
silage making), costing silage making
activities, cow signals, working with co-
operatives and meeting marketing and
performance standards.
“Before the youth went to Kenya, we
invited dairy consultants from Kenya to
orient and teach Tanzanians on how to
enhance their skills in developing the
dairy sector,” he said.
Tanzania has about 21.5 million heads of
cattle, 15.2 million goats, 6.4 million sheep
and 58 million poultry. He said over 98
percent of livestock is indigenous breed
types while two percent is of improved
breed.
Mr. Mmbughu noted that the youth
trained in the SPE model will not only
improve dairy activities in their regions
but will use their skills and knowledge
to educate other farmers and offer them
services.
“The youth have utilized the knowledge
provided by our neighbours from Kenya
and also the dairy professionals from
Morogoro on the effective ways to advance
in dairy farming. The response is positive
and the youth have begun to offer services
to other farmers,” he said.
Project
supervisor,
Mwinuka
Lutengano, said they have conducted
in Tanzania as part of its longer term
commitment to Tanzania.
Already Acacia has given a deadline of
end of this year for completing the process
of closing Buzwagi gold mine following its
being economically unproductive.
Acacia has three mining companies with
SML, including North Mara, Buzwagi and
Bulyanhulu.
Analysts are cynical on whether the set
mine closure plan will be adequately met
given the big burden of compulsory listing
of shares at the stock market.
The Parliamentary Committee for
Energy and Minerals has called upon the
management of Buzwagi gold mines to
involve the surrounding communitie s and
workers in the process of the mine closure.
Under the mining closure plan, gold
production activities at Buzwagi is set
to end this December according to the
ministry’s bulletin.
Members of the parliamentary committee
visited Buzwagi gold mine in Kahama
recently.
Parliamentary Committee Chairman
Doto Biteko said that involvement of
communities and mine workers in the
mining closure process was necessary
because such exercise has a far-reaching
impact on the Kahama district economy
and household economies.
Some of the listed impact of the mine
closure is loss of economic gains among
residents, loss of district earnings in terms
of paid up royalties and several corporate
social responsibility benefits paid by the
mining company on an annual basis.
The bulletin also quoted the manager
for Buzwagi Gold Mine Assa Mwaipopo
as saying that the gold mine has been
involving the surrounding communities
in regular meetings to incorporate their
views on how to implement the mining
closure plan.
fodder campaign to the two cooperatives
aiming at increasing awareness to the
wider cooperative members towards
silage making, improving cattle feed and
establishment of fodder plots.
“Given the nature of cooperative societies
in Tanga, we have decided to establish
different silages. To sustain the activities,
new demonstration plots were started with
a number of fodder seed varieties.”
“In another development, he said the
youth also attended training in Morogoro
which was facilitated by the professionals
from the department of animal health
(Morogoro Campus).
“Both the training from Kenya and
Morogoro have transformed youth engaged
in dairy production to better manage the
dairy industry.
Robert Morage, the Kenyan dairy
consultant
in
feeds
and
feeding
management said during his training
stint that the new model is essential
in transforming dairy farming since
Tanzania is still practicing old ways of
farming.
“In comparison with agricultural
practices in Kenya, Tanzania is still far
behind and so measures and initiatives
need to be put in place to improve on the
production of milk in Tanzania,” he said.
He noted that the youth will be an
important catalyst for change to bring the
knowledge and skills from the institutions
and disseminate them to the small-scale
holders in agriculture to enhance their
commercialization processes. He urged
the Government to support farmers by
recruiting more extension officers to
assist farmers on a day-to-day basis.
It is time therefore, for the government
to put supportive measures in place and
to encourage other institutions to breathe
new life into Tanzania’s agricultural
industry – the mainstay of our economy.