RC contradicts commission on tanzanite royalty plunge

Mirerani. Manyara Regional Commissioner Alexander Mnyeti said yesterday that the steep drop in monthly royalty collections from tanzanite was due to falling production, not rampant smuggling of the gemstone.

The assertion – which was supported by Manyara Regional Miners Association (Marema) chairman Sadick Mnenei – is at variance with the position of the Tanzania Mining Commission (TMC) that the drop was largely due to rampant smuggling despite the construction of a Sh5 billion wall around the prime mining area. Monthly royalty collections have reportedly plummeted from Sh444 million to only Sh40 million.

Briefing journalists last week, TMC chairman Idris Kikula said some miners were involved in smuggling and since inspection was being done manually for lack of modern inspection equipment at the exit, tanzanite was easily smuggled out.

“We have proposed that a tanzanite auctioning facility be built (within the walled area). This will enable the government to collect all the royalty it deserves,” he said, adding that the commission had noted that an inordinately high number of vehicles and people were entering and leaving the mines, which could have led to increased smuggling.

The commission has proposed that people should use special identity cards to gain entry into the area instead of national IDs or voter’s registration cards.

But Mr Mnyeti said yesterday that there was no smuggling of the gemstone, adding that the drop in royalty collections was due production having decreased markedly in the past three months.

“In April, May and June, production was very low except for one mine that’s owned by Iraqw Mining. It’s therefore wrong to conclude that there was smuggling,” he said. Mr Myeti added that a reasonable sum in royalties would have been collected had production at other mines be as high as it was at the Iraqw mine.

“We expect royalties to increase significantly in August since production is steadily picking up,” he said.

Some small-scale miners said the fall in royalty collections did not mean that there was smuggling at the Mirerani mines.

Prime Minister Kassim Majaliwa told Parliament recently that the new wall around mines led to an increase in collections from Sh714 million (between January and March 2018) compared to Sh147.1 million that was collected in the entire year in 2017.

Before the wall was constructed, it was estimated that about 40 per cent of the tanzanite mined at Mirerani mines was being smuggled, thus denying the government revenue.

Mr Majaliwa said the smuggling was mostly done by middlemen who were not properly vetted or frisked at the main gate due to the lack of modern security scanners.

Mr Mnenei said yesterday that small-scale miners do not have enough funds to continue with production because their financiers were finding it increasingly difficult to provide them with capital as the business environment becomes more unpredictable.

“The rich businesspeople are facing challenges in their businesses. As such, they do not have enough funds to loan small-scale miners. This means that the latter’s capital has decreased significantly,” he said.