I’ll explain…
I’ve in mind here the mining licence for the biggest beneficiary of the country’s unique gemstone ‘tanzanite.’ This is TanzaniteOne, reportedly a “multi-billion dollar” mining firm listed (NOT with the nascent Dar es Salaam Stock Exchange) but with the London Stock Exchange. In 2004, the South Africa-based firm edged another South African firm, African Gem Resources, out of the lucrative tanzanite mining industry.

In the event, it also elbowed its way into the tanzanite business, which globally commands a $400-500 million-a-year market.

The tanzanite is a gemstone that’s reportedly 1,000 times rarer than diamonds! It is also finite. Formed 500 million years ago, known deposits’ll last 12-20 years!

Apparently, tanzanite’s found only in Tanzania, a fact that seems to be lost upon the country’s leaderships, past and present. Its uniqueness, rarity and limited reserves alone give the country tremendous comparative advantage which, if prudently tapped, could, reap phenomenal benefits for hapless, beleaguered Tanzanians.

In the event, it isn’t! A 15-year market life of around $400 million yearly works out at $6 billion in income for all the stakeholders involved everything else being equal.  But, how much of that sum will Tanzanians’ll ever get as the original, natural, God-given owners of the resource?

Unless and until the extant mining arrangements change for the better on the ground, ordinary Tanzanians’ll continue to scramble for the crumbs from the foreign investors’ High Table...

Available figures show the “tanzanite company has contributed nearly $10 million (to Tanzania’s) economy in the form of corporate taxes ($5.3 million); royalty ($4.4 million), and $201,898.73 in gemstones levy from 2005 to 2009. Also, the company has created nearly 500 formal employment positions!” [The Guardian: Jan. 15, 2012].
That’s less than $2 million yearly for a $400-500 million global income!

No one’s saying how much the company has made from tanzanite in those five years. Even the Tanzanian authorities are in the dark on this!

Did we have to give transnational exploiters the opportunity to reap billions from Tanzania for a measly $2 million a year in return? Tumerogwa: are we under a magician’s spell?

Admittedly, small-scale miners and smugglers are a headache. But, at least, the former do invest their earnings in the country, if only by spending in the domestic consumer trade and improved household-level lifestyles!

Smuggling can be moderated through stringent law enforcement measures, but only if the pervasive corruption among public officials is surmounted first.

In such a situation, I cannot see how the authorities’d justify renewal of the company licence when it expires in March. Our decision-makers surely cannot be that naive, that imprudent, and that insensitive to the situation on the ground!

Apparently, Section 8 of the revised 2010 Mining Act stipulates that gemstone mining will solely be done by Tanzanians unless it requires heavy investments and sophisticated technology! This last bit is wherein the devil lies.
It’s a loophole that gives the grandly corrupt in the corridors of power leeway to circumvent the law and prolong wanton exploitation of the peoples’ natural resources for the benefit of a few aliens!

The authorities should renegotiate the mining agreements, old and new, to ensure that ordinary Tanzanians benefit to the maximum from them up to 40 per cent returns, in cash and in kind.

If not, then we should give it a rest for ten years or so in which to deeply consider the prospects. Hopefully, the corrupt elements in the incumbent government would have gone out of commission by then, replaced by a newer, more dedicated leadership who have the interests of ordinary Tanzanians in heart and mind. Cheers!
Mr Lyimo is a socioeconomic commentator based in Dar es Salaam

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