How slow tanzanite trade is affecting lives in Arusha

A convoy of Tanzania National Service vehicles move alongside the tanzanite mines perimeter wall at Mirerani in Manyara Region. The wall is 24.5km long. PHOTO|AGENCIES

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OTTU building and St Thomas, which normally attract a large number of mineral dealers, have also seen a decrease in the number of clients

Arusha. A slump in earnings from the sale of tanzanite minerals is affecting money circulation and the spending power of residents of Arusha and Mirerani towns.

Two weeks ago the chairman of the Tanzania Mining Commission, Prof Idris Kikula, visited Mirerani mines, where he told reporters that smuggling of tanzanite was continuing, causing a fall in royalties from Sh444 million to Sh40 million per month.

“When brokers return from buying minerals and pass through the gate, some are suspected of hiding the precious stones, as there is no sophisticated equipment to detect them,” said Prof Kikula.

He said the commission believed that tanzanite smuggling is going on despite the construction of a wall enclosing the mines.

The lives of residents

The Citizen’s investigation in Arusha and Mirerani revealed that some businesses are losing out on customers with the situation being felt more in the lives of residents of areas where miners have been congregating.

Clubs, hotels and other entertainment spots in areas where the mineral is sold have taken a hit because of a dip in the number of revellers, particularly in clubs such as Triple A, which during weekends used to attract a large number of revelers.

Jeremiah Mollel, a businessman in the area, says tightened control of the mineral business has greatly contributed to the decline in the number of customers.

OTTU building and St Thomas, which normally attract large numbers of mineral dealers, have also seen a decrease in the number of patrons possibly because of the unavailability of tanzanite compared to the past days.

A mineral broker, Raphael Wandiba, says currently, after the tanzanite business started stagnating many brokers shifted to ruby mines in Longido District.

“The business is not conducive here because there is no tanzanite that is sold in towns anymore,” he says.

The situation in some areas of Mirerani town has become hard to cope with due to what residents say is control of mineral brokers and other dealers who want to enter the tanzanite mines.

For his part, area resident Peter Kaaya, says contrary to the past, money circulation in Mirerani Town has greatly diminished.

“It has become hard for a person to part with as little as Sh5,000. In the past you could easily get as much as Sh50,000 when you asked for it.

“Things have now changed because everyone is facing hardships and I think that controlling the mineral business has contributed to this situation,” he said.

For his part, the chairman of the Tanzania Mineral Dealers Association (Tamida), Mr Sammy Mollel, says he believes that the government’s earnings have dropped with life becoming hard to cope with mainly due to a decrease in mineral production.

He said Tamida was shocked by the Mining Commission’s report that revealed that the fall in government earnings was a result of smuggling.

“What we know is that mining activities have slowed down and even if there was smuggling of the mineral, the deficit in royalties would not be so big.

“Even if there is smuggling of minerals, it is impossible for it to cause a loss of Sh400 million per month. What we believe is that the production has gone down as many mines have stopped producing,” said Mollel.

He added that the situation did not only affect the government, but also miners and residents. This is because the city of Arusha and Mirerani town have more than one million people who depend on the tanzanite business for a living.

“I think what the government is supposed to do now is to give support to miners and get experts in modern mining technology. Banking institutions should also start giving loans to miners,” he suggests.

He also called on the government to conduct geological surveys yo establish more areas where people can engage in mining activities.

According to Mollel, the second reason for the decrease in the government’s royalties is that over 10 mines in blocks B and D, which border block C that is owned by Tanzanite One, have stopped production.

“Mining activities have stopped because of the agreement reached by all parties that such activities will be carried out in cooperation, particularly in the areas of disputes and that since Tanzanite One has stopped production, it has become hard even for other miners to work,” he says.

One of the directors of Tanzanite One, Faisal Shabhai, admitted that Tanzanite One had stopped mining activities.

However, he said that the firm’s production would resume soon.

For his part, the secretary of the Mirerani Miners, Abubakar Madiwa, concurred with others that the Mirerani residents who largely depend on the mineral to make ends meet are now facing hardships, saying many businesses had closed and there was little money in circulation.

“There are female food vendors who enter the mines to sell food and drinking water to brokers of mineral concentrates. So, abruptly preventing all these to enter the mines is a problem,” he says.

He says, as secretary of the miners association, they do not support those wanting to smuggle the mineral.

What they want to see is the government collecting its revenue and members of the public directly benefiting from the mineral.

Other miners believe that the fall in government royalty has been, somehow, contributed to by some owners of mines and mineral brokers who have found another way of evading taxes to the government and instead resort to smuggling.

“After the government introducing a stricter procedure for payment, many mine owners avoided giving correct particulars and paying taxes and instead they resorted to mineral smuggling,” said one of the miners who did not want his name disclosed.

Owners of mines speak out

The chairman of the Manyara Mineral Miners Association (Marema), Sadick Mnenei, says generally mining activities have slowed down and the tanzanite business is not vibrant.

He says the Mining Commission’s recent report has made mining activities much harder than before because of the added number of security organs to control entry into and exit from the tanzanite mines.

“We believe that government earnings have plummeted here in Mererani not because of smuggling, but low production of minerals.

“We, as owners of the mines, know that once we start getting minerals, the business and the living standards in Mirerani and Arusha will become much better and the government royalty will increase as well,” he says.

He insists that tanzanite cannot be smuggled out.

“If a mine produces some minerals, everybody will know because there are over 50 artisanal miners in every mine… there are supervisors and mineral officials,” he says.

He says Marema supports the government’s efforts to ensure the tanzanite gemstone benefits all Tanzanians and is not smuggled.