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					           CHALLENGES OF SMALL- SCALE MINING IN TANZANIA

  By: Khalfan Said Masoud, Managing Director, Samburu Mining Company Limited.
  World Bank Conference on Small Scale Mining, Madagascar, November …… 2006
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Ladies and Gentlemen,

It is an honor and privilege for me to present to a distinguished audience of
this very important conference. I thank the organizers for the opportunity
and all of you for being here.

Minerals are valuable commodities which man has found impossible to just
walk by without exploiting. Through history men have defied hostility of
weather, forests and wild animals in pursuit of minerals. The lucky ones
became filth rich after investing in the high risk mining ventures. Others
who were not lucky lost fortunes and even lives. Despite the tales of people
who lost fortunes or even died, man’s quest for mineral riches has continued
to grow. At present time, women have also joined the mineral rush either as
individual investors or as small associations of women miners. In Tanzania,
some women, apart from supporting the mining communities though selling
services such as food, have taken prospecting rights and a few are dealers in
various types of minerals.

Tanzania is a country endowed with mineral resources of all kinds; diamond,
gold, rubies, moon stones, green granite, natural gas, iron ore as well as the
rare tanzanite which is only mined in Tanzania. Much of the mineral
resources remain unexploited or underexploited. Many deposits are
exploited by small scale miners, mainly indigenous people of the mineral
rich districts.

The Tanzania Mineral Policy of 1997 and the Mining Act of 1998 provide
generous incentives that have attracted world class mining companies to
invest in this sector. As a result the sector recorded the fastest growth in real
terms, an impressive 13.5%, earning the country US$ 302.2 millions in
2001, US$ 499 million in 2003, and US$ 553 million in 2004 compared to
US$ 29.4 millions in 1998. Mining contributed only 3% to GDP in 2004 and
its impact on total economic growth is small. Nevertheless, it is significant
that its share has been growing consistently since 1993 when it was only
1.1% of GDP. It is expected to rapidly continue, as there is still significant


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untapped mineral potential in Tanzania. Many investors are supplying more
money into the exploration and mining sector.


The Mineral Policy of 1997 also created enabling environment for local
investments in the mining sector. This has created increased investment in
small scale mining across the country. The small scale mining contribution
to national income has consequently increased due to liberation of the sector
which encourages open transactions in mining dealership instead of
smuggling gemstones to neighbouring country especially Kenya.

Despite the many positive developments following the improvement created
by the legal framework, small scale mining is still underdeveloped in terms
of availability of investment capital, infrastructure, human capital/skills and
government support. The conditions in the small scale mining areas are
deplorable and dangerous. Almost all small scale miners are exposed to
health hazards due exposure to dust, harmful gases, toxic extraction
chemicals, unsecured mining shafts, crowded and dirt living conditions,
unsafe water sources and risk to contract HIV/AIDs. The poor conditions
found in most small scale mining centres are the results of historical
development of these centres.

 In most cases, minerals are found in remote areas without basic
infrastructure like road network, water, electricity and social services. Soon
after the discovery of mineral in a certain location, people rush to the area
with basic working equipment, shelter materials, and basic necessities. Once
the mineral opportunity is established they start to randomly bring in
services such as shops, hotels, water, fuel and other high demand services
without much thought on proper planning and layout. Over time, such
mining centres grow into small unplanned townships mostly of makeshift
squatters with crowded streets, dirt roads and poor sanitation. The mineral
rush cause environmental hazards, security and other social problems. These
are the typical living conditions of all small scale mining communities in
Tanzania.

In small scale mining there are also cases of breach of international
convention against child labour. For example, in the Mirerani areas there are
more than 4,000 children who are employed as miners under very harsh
conditions. These children are popularly known as snakes because of their
ability and courage to go through narrow mining shafts. They do not earn

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any wages but fend for themselves by using small income made either
through begging or selling small particles of minerals found in abandoned
mining shafts. They, as the adult miners, dream of getting rich. This dream
keeps them going even when their rights are violated.

In order to improve the conditions of SSM in Tanzania, deliberate efforts
should be directed in four main areas; favourable legal framework for SSM
sector, access to financial capital, access to appropriate and safe mining
technologies and access to skills capital.

Legal Framework for Small Scale Mining Sector:
The implementation of the Mineral Policy of 1997 and the Mining Act of
1998, has put a lot of emphasis in promoting foreign investors in mining
sector. Investment in SSM is not given the priority it deserves and in most
cases viewed as illegal mining activities. This needs to be reviewed.

Access to Financial Capital:
Mining is a risky and speculative activity. It is even riskier when it involves
SSM where opportunities cannot be verified due to lack of proper
prospecting equipment. Formal financial institutions shy away from this
sector living it to informal financing which is small and unreliable. Most
SSMs have suffered the pain of loosing their entire investment.

Access to Appropriate and Safe Mining technologies:
Most SS miners use rudimentary technologies in mineral extractions. The
types of equipment used are improvised and used by people who learn to
operate them on the job. These include picks, shovel, hammer and may be
jack hammer if they can afford it. There are many reported mining accidents
and deaths due to poor quality of equipment and work methods. Therefore,
lack of facilities and equipment make the whole process of small scale
mining dangerous and difficult.


Access to skills capital
Small scale miners learn the job through doing it. These are ordinary citizens
from mainly peasantry background with at most primary level education.
They do not have any knowledge of geological study of rocks. Through
experience they acquire knowledge and skills geared at extracting the
precious minerals. For the case of Tanzanite mining, they learn how to
analyse the rock layers/patterns that lead to finding the precious stone. Given

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their low geological knowledge, most resort to black magic believing that
witch doctors can assist them to strike it rich within a short time. There have
been several incidences of sacrificial killings especially of young male
children.


MINERAL DEPOSITS IN TANZANIA

 The Mozambican belt stretches all the way from Mozambique to Egypt and
probably over 5000 kms. All the coloured stones are found in this belt
except diamonds. The central Tanzania shield has kimberlitic and
kimberlitic bear diamonds


There are extensive deposits in these areas and the magnitude of the mining
has been significant. However, lack of technical expertise as well as
mismanagement has all contributed to a steady drop in investment and
productivity. One may argue that deposits are depleted and this may be
possible but it is not probable. This is because artisan mining efforts in all
these areas continue to produce, sometimes significant quantities of precious
stones. A good example is ruby which is found in Mahenge, Longido and
Tunduru in the southern part of Tanzania. In Lossogonoi, Kiteto District,
effort is underway to introduce mechanized ruby mining. Sapphire has been
produced in many areas, such as in Umba, Handeni, Masasi Songea and
Tunduru.


Examples of garnets are green garnet, rhodolite, almandine etc. The chrome
tourmaline deposits from Umba and Landanai. Concerted effort is required
to revive production, as does the vast deposit of green garnet in Lemshuku.

There are valuable deposits all over Tanzania that are commercially viable
such as, gold, ruby sapphire, emerald and tanzanite.

I suppose, after mentioning to you the deposits and the commercial potential
that exists in mining sector, you will probably agree with me that we need to
encourage more organized and commercial scale mining in order to increase
and sustain the supply of these minerals to the market.



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I would like to talk about my experience in mining Tanzanite and gold. I will
also explain the current situation and what the industry needs to look at in
order to ensure sustainable supply of minerals to the market.


TANZANITE :




 FIG 1:      ROUGH TANZANITE




FIG 2:       POLISHED TANZANITE

Even where there are vast deposits, traditional mining practices have made
production extremely difficult. These involve digging narrow and long
shafts/pits of up to 400 meters deep. Tanzanite mines are found in Merarani
Area. This is the only place in the world where Tanzanite is found. The area
is in a small village covering a few square kilometres. It is divided into four
blocks, that is A, B, C and D.

Blocks B and D are “free for all” zones. Here, in the beginning, the
government just allowed anyone to mine without any registration. As the
mining activities increased the government decided to regulate the mining
activities. Currently, all plots have been formalized, registered and issued
with mining licenses. Then, due to political pressure from small miners, a
new system was devised where the areas were divided into 50 by 50 meters
blocks. Each block could have as many as six shafts.




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FIG 4: 50x50 meter block and one of the shafts over 400 meters deep.

Once the shaft reaches the first tanzanite bearing zone, the mine becomes
free for all. No vertical mining rights prevail. Therefore it is first come first
serve race at any cost. The major challenge is removal of sand and gravel
from the shafts. Bags weighing more than 15 kilos have to be manhandled
up and out of the 400 meters tunnels, through narrow shafts and ladders.
Normally Tanzanite mining is a simple process. Once sand and gravels are,
removed, movement in the right direction can assure you a greater
probability of good production. However, because massive quantities of
sand and gravels have to be hauled out of the shaft manually, as is the case
in block B and D, the production is constrained. The situation in block A and
C, where Kilimanjaro mines and Tanzanite One operate the mining process
is fully a mechanized. Naturally this leads to higher production.

What motivates the workers in block B and D? While meals in some mines
are not guaranteed, there is nothing like salary which is being paid to the
workers. In some mines they are promised a certain percentage in case there
is production. How much productions, nobody else knows expect the
Steering team (those who are in charge of mining process). Most of these
workers depend on what they regard as luck, which can occur either by
snatching pieces of raw tanzanite worth millions of shillings, or by sorting
out gemstones inadvertently left in sand. For this reason workers are
tempted to move from one mine to another looking for productive mines.
This goes to show that mechanization in blocks B and D would be of great
benefits. However, at present it becomes difficult because of the high
concentration of these mines. The solution will be to merge common
operations of these mines and mobilize capital investment. If this is



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achieved, the contribution of small scale mining to the economy would be
greater.
GOLD
In the past ten years since 1990’s Tanzania have risen though the ranks of
mining nations to become a significant gold producer. It is has become
Africa’s third largest gold producer. Production in 2003 was about 1.3
million ounces and deposits of around 45 million ounce of Gold have been
discovered around Lake Victoria. During period Tanzania has seen the
opening of several large-scale mines, such as Golden Pride in Geita,
Bulyankulu Gold Mine, East Africa Gold Mine, etc. These companies
produce an average of 1.5 million ounces per annum against the available
deposits of 35.7 million ounces. This means, in less than 24 years the
deposits in these areas will be exhausted. Along side these big mines there
are thousands of artisans involved in small-scale mining of gold.
There are many other gold deposits across the country which have neither
been prospected nor exploited by the big mining companies. These stretch
from the Lake zone (Mwanza, Kagera and Mara) through Shinyanga,
Singida, Dodoma in the central zone. Others are Tanga Region in the coastal
zone and Mbeya in the southern zone. Small miners are active in all these
areas.
Sambaru in Singida (central part of Tanzania) for example, is a new area
where small-scale miners started mining in 2003. Many small-scale miners,
including our company Samburu Mining Company, have applied for PML
(Prospecting Mining Licence). One PML allows for 10 hectares. Our
company has 6 PMLs and have applied for 100 more. Like many other
small-scale miners the activities of gold mining in all these areas are in one
way or the other similar. Timber scaffolding is used in the shafts to prevent
their collapse. Ore is hoisted out manually by using bags tied to ropes. Using
a hammer the ore is pulverised before grinding it using an iron ball rolling
mill. After grinding it is then processed using sluice boxes, the gold is
caught by wet pieces of clothes and sacks. The concentrates is recovered by
washing pieces of cloth and sacks in water. Mercury is used to collect gold
(Amalgamating) and by using retort or open flame (fire) the remaining
mercury is blown out and gold is set free. The recovery methods guarantee
only 40-45% of gold. About 55-60% of gold is thrown back with the
processed sand and gravels. Small-scale miners rework the used sand and
gravels after a few months and recover gold again. Used sands and gravels
are the areas for investment not only in Singida but in all small-scale gold
mining sites.



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Some photographs at Sambaru and Londoni in Singida Region




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Inferior gold extraction methods, lead to mercury pollution of land and
rivers due to direct dumping of processed sand and gravels, soil erosion and
landscape destruction. Sustainable of these mines is questionable
considering the labour intensive methods and the resulting low productivity.
In this kind of small scale gold mining it is difficult to project production
quantities and quality. There so many questions in terms of who benefits
from the small production. Is it the pit owner? Is it the compressor owner? Is
it the mercury suppliers? Is it the stone crushers? Or is it the millers?

How do we change this situation?
Gold unlike Tanzanite is obtained all over the Country and in large
quantities. This means both small and big–scale mining can take place
concurrently. This is as long as the small-scale miners are organised, well
resourced, and have improved infrastructure. Where small scale miners are
organised; financial facilities, expertise and appropriate technologies should
be provided. A pilot project of supporting small-scale miners would serve as
a jump start to profitable and safe mining activities.

Conclusions:
Beside Tanzanite, gold, ruby and sapphire mining there are many other areas
of interest. Amethyst is found in Haneti, Handeni, Kongwa and Kilosa.
Emerald is found in Sumbawanga, Man’gola and Manyara. Aquamarine is
found inSongea. Kondoa and Singida hold zilcon/gold and garnet. While
Ruangwa has green garnet. There are other areas that keep on popping up
every now and then; the fact is there are over 200 gemstones types and other
minerals found in Tanzania.

All the above mineral deposits show that there a huge potential in
developing the small scale mining sector as a source of gainful employment
opportunities and economic growth. This is part of the vision of Samburu
Mining Company.
However, we need to find answers for one big question; How can we stop
the recurrent bad experiences in small scale mining? Most of the mineral
deposits in Tanzania were discovered by local citizens, confirmed by
geologists and prospectors. After such confirmations claims were filed and
mining activities started. Except for very few claims, most mining activities
were started and run on very limited financing mainly mobilized from
informal sources. Apart from constrained financing, there were cases of
claim disputes due to inefficiencies of the Ministry of Mineral and Energy,


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bureaucracy, political interference and lack of strong legal institutions for
handling commercial disputes. All these problems have left many local
investors in mining industry disillusioned.


There is an ongoing debate in Tanzania at the moment on whether the
country is benefiting from the massive foreign investments in the mining
industry. Many Tanzanians are complaining that the expected economic
uplift of indigenous people, especially in the mineral rich areas has not been
realized. Their living conditions remain more or less the same, apart from
accessing social services (schools, dispensaries, water in the form of
boreholes or taps) established by the big mining companies. Most
Tanzanians contend that these are minute investments compared to the
wealth which the big investors get out of our natural resources.

The main questions remain, how can the resources of the country be shared
equitably and create the economic uplift to its entire people? How can the
SSM be empowered to engage in a more profitable and safe mining
activities? It is not my intention to answers all the questions raised in this
paper but would like to conclude providing a few recommendations that I
believe will provide the answers we are looking for.

 In order to boost investment in small scale mining, a serious organization
and regulation of the sector is required. The government should invest more
efforts in promoting local investment in mining and regulating the sector.
The current government drive to expand employment opportunities should
also include promoting employment opportunities in the mining sector by
providing:
    • Technical support to small scale miners to reduce the risks involved in
       investing in mining activities which are not commercially viable. Also
       train artisans on proper mining methods.
    • Infrastructure development in the areas where small scale mining are
       located to reduce the cost of production and curb environmental
       degradation. This will also improve access to market and enable the
       small scale mining owners make more profit.
    • Community based financial support in the form of revolving funds to
       enable indigenous people to realize the benefits of the natural
       resources in there districts/villages
    • Political will to equitably share the benefits of the natural resources
       found in the country.

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   • Promote investment in appropriate and safe mining technologies that
     will improve the working and living conditions of the artisans and
     communities around mining sites.

Ladies and gentlemen thank you for your attention.




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