Mining for National Development

Facts Surrounding Export of Copper/Gold Concentrates for Smelting (‘Mchanga’)

The issue of copper concentrate exports (popularly known as Mchanga) produced by Acacia’s two gold mines namely Bulyanhulu Gold Mining Company (BGM) and Buzwagi Gold Mining Company (BZGM) has attracted a lot of debate and commentary during the past decade. The debate centred mainly on the argument that, instead of exporting the copper-gold concentrate, mining companies should separate the minerals in the country by constructing their own smelters.

In as much as the mining companies would have liked to complete the entire process at the mine site, it was argued that smelting the copper concentrate was an uneconomic consideration largely due to economies of scale. The ores obtained from BGM and BZGM are sulphide in nature whereby gold is locked in complex compounds with copper and silver. As a result of the impasse, in 2009, the government commissioned the Tanzania Minerals Audit Agency (TMAA) to conduct a study on the viability to construct a copper concentrate smelter in Tanzania so that the copper-gold concentrates produced can be separated in the country.

Simply put, smelting is a process of melting ores or concentrates containing various minerals locked together to separate out the gold, silver or other contained metals, in this case the copper, gold, silver and other minor elements which are locked together. It is indeed international practice for mining companies particularly where the feedstock is relatively small to concentrate on mining and processing of the ore and the smelting part is left to the large smelters capable of handling concentrates from all over the world in large quantities, in other words, specialization.

Summary of the findings
A report dated December 2009 established that a commercially viable Copper Concentrate smelter requires a feedstock upwards of 150,000 tonnes annually. At full capacity, the combined production from BGM and BZGM is not more than 60,000 tonnes of Copper Concentrate annually, which is 40% of the capacity of a viable Copper Concentrate smelter. The report further states that:

The study concluded that, it is not feasible for a Copper Concentrate smelter to be constructed in the country to smelt and refine Copper Concentrate produced by BGM and BZGM.  

Magwangala (Waste Rock)
The Magwangala issue has also undergone deep analysis as a technical team formed by the ministry of energy and minerals visited the waste rock dump, collected samples and submitted to the Tanzania Geological Survey (TGS) and Tanzania Minerals Audit Agency (TMAA) laboratories for testing. Results showed gold content averaging 0.4 grams/tonne which were sufficient for the team to carry out economic analysis.

It would be worth mentioning from the outset that empirical data derived from several years of studies on small scale mining suggests that small scale miners’ gold recovery rates range between 40 % to 60%. It then follows that at a grade of 0.4grammes per tonne, an artisanal miner will only get 0.20 grammes of gold (50% average recovery) after processing of one tonne of waste rock; this amount is far too low to make the operation economic.  The report clearly states that the materials categorized as waste rock in GGM operations (0.4g/t) are not economical for processing and would render any project to process them laborious and unprofitable. Anywhere in the world, small scale mining is only amenable to small deposits with high grades.

On the other hand, the report suggests that only materials averaging a grade of 1.3 g/t and above would be economically viable for processing by Small Scale Miners, however, this type of ore is under GGM’s mining plan and therefore under no circumstances would the Company   dispose such materials to a third party.

Implications and best approach
It should be noted that apart from the proposal being unviable, any pilot project under such conditions is likely to generate unrealistic expectations and attract large influx of people from outside Geita that would in turn impact on the security, law and order in the communities around GGM operations and the entire Geita district. Furthermore, if for whatever reason such a project is allowed to proceed, it will set a serious precedent for the entire mining industry which will be extremely difficult to manage; it will also encourage invasions in exploration tenements resulting in suffocation of further investments into the mining sector. Here we would like to cite just a few of the consequences.

It should be noted that :

  1. Conditions of the Special Mining License governing the operations of Geita Gold Mining Limited as well as other TCME members, charges the Company with the duty to protect and manage the environment within the SML in accordance with the company’s approved Environmental Management Plan ( the “Plan”). This Plan prescribes the manner in which various forms of waste, including waste rocks stacked in waste dumps are to be treated; issuance of magwangala is not part of the plan.
  2. Among the waste produced from GGML’s operations comprises of acid forming rocks and potential acid forming rocks. Regulations currently in force require GGML to place potential acid generating materials in a manner that minimizes the production and release of such acids to levels that assure environmental protection.  If GGML were to accept this proposal, it will be incapacitated from discharging this legal obligation because it will not have control and monitoring capabilities over the new dumping sites although this alone will not extricate GGML from the fact that it was the source of such waste. The communities will not be protected from this pollution.

Bearing in mind the vast negative consequences it is strongly suggested that the proposed project be reconsidered pending further discussion among the stakeholders in the mining industry.

Way Forward
There is no doubt that artisanal mining plays an important role in alleviating poverty and potential contributor to the national economy as per the Mineral Policy. It recognizes small scale and sets out strategies on the best way to mainstream artisanal and small scale mining; Magwangala is not part of that policy. Instead, the Government should continue to work with other stakeholders to identify and implement sustainable solutions for Artisanal and Small scale Miners (ASM) in the country as recommended by the task team.

One such sustainable initiative is the Lwamgasa ASM Formalization Project in Lwamgasa Village, Geita District which was designed under the Multi-Stakeholders Partnership Initiative (MSP) whereby GGM financed feasibility studies for the Project that was completed in 2004. The Pilot Project was launched on 12th September, 2014. It is expected that if the pilot project in Lwamgasa becomes successful, the lessons learnt will be replicated in other parts of Geita and Tanzania to render the operations of ASM more viable economically, socially, and environmentally. The Government should also continue with the efforts to delineate suitable areas for conducting small scale mining activities.

It needs to be noted that our members, operate under the country’s Mining Act 2010 as well as other legislations that provide controls, regulations and procedures on how to manage materials generated from mining operations.  All our members are committed to operate on internationally recognized environmental standards such as ISO 14001 which contains strict adherence to proper management of the environment in which the mine operates.

Implementation of the Waste Rock (Magwangala) project at Geita will not only be an unethical act of gross irresponsibility but also a clear breach of the said laws and regulations and in turn will result in liabilities on part of our members.

The Chamber is committed to continue working with the Government on these and other issues that affect the mining industry.