Gemstone firm sheds 600 jobs to cut costs

Monday January 11 2016

Tanzaniare One workers demonstrate at the mine

Tanzaniare One workers demonstrate at the mine premises at Mirerani in Simanjiro District Manyara Region, protesting against job cuts announced last year. The company said it retrenched 618 employees to cut cost following drop of business. PHOTO | FILE 

By Adam Ihucha

Arusha. Tanzania is bleeding jobs as falling Tanzanite gemstone output has forced a giant mining firm to lay off 618 of workers as part of its austerity measures.

Tanzanite One Ltd, the world’s largest miner of the blueish-hued gemstone in Simanjiro District, Manyara Region, laid-off nearly 50 per cent of its robust 1,200 workforce as part of the plan.

It is owned by Sky Associates and State Mining Corporation (Stamico).

One of the firm’s directors, Mr Faisal Juma Shabhai, says that the job cuts decision was informed by the declined of the gemstone output on their operations at Mirerani Hills, 60km South East of Arusha. “The production had declined by 50 per cent over a period of few months, but more seriously, the overhead costs also remain high, compelling us to lay off workers,” he said.

Records show that TanzaniteOne spend nearly $1 million per month for its operations such as purchasing mining equipment, wages for its staff, as well as to meet administrative costs.

He also cited an increase in illegal mining activities within its mining area by locals, compelling the firm to shut down three out of five mining shafts, as one of the factors behind the mess.

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“Such kind of incidents not only threatened the safety of the company’s workers, but also made its operations ‘extremely challenging’, informing our decision to shut off three out of five mining shafts,” he stresses.

“We have finalised talks with labour union about job cuts. In fact we have signed the deed of settlement before the Commission for Mediation and Arbitration (CMA) in Arusha,” confirms TanzaniteOne’s human resources manager Kiria Laizer.

However, Tanzania Mines and Construction Workers Union (Tamico) chairman Maghai Daniel cautioned the company to stick to the agreement. “The company must pay all affected staff as per mining policy,” he explains.

Globally, tanzanite trade earns $500 million a year (about Sh1.1 trillion), with Tanzania, which is the only source of the precious stone recording export revenues of $38 million equivalent to 7.6 per cent of trade value.

According to the World Bank each year, 800,000 young Tanzanians enter a job market that generates only 50,000 to 60,000 new employment opportunities.