NICE & SHINY

Tanzania 2014 | INDUSTRY & MINING | INTERVIEW

TBY talks to Gideon T. Mwaya, Acting Director General of the State Mining Corporation (STAMICO), on the company's history, its largest domestic projects, and joint ventures.

Gideon T. Mwaya
BIOGRAPHY
Gideon T. Mwaya is a geologist by training and is currently the Acting Director General of the State Mining Corporation (STAMICO). He is a member the Geological Society of Tanzania, and acted as its Treasurer from 1986 until 1996 and as its Vice-President from 1996 until 2003. He was a member of the Board of Directors of Kiwira Coal Mines for the 2004 to 2005 period and is a Board Director of Itetemia Mining Company Limited and Buckreef Gold Mine Company Limited.

What is the company's history in Tanzania, and what are its current operations?

The State Mining Corporation (STAMICO) was established in 1972 under the Public Corporation Act, 1969 and was tasked with developing the mining sector in Tanzania. At the time of establishment, STAMICO had 12 subsidiaries, several exploration projects, and mineral buying projects, particularly mica, gold, and cassiterite. The state at the time was the sole investor in the mining sector. From the late 1980s and early 1990s\ the economic policies of the country changed from centrally controlled to market oriented. This led to the enactment of the new Corporation Act of 1992 to replace the 1969 Act. Under the Public Corporation Act 1992, subsidiary companies under holding corporations like STAMICO were transferred to the Treasury Registrar. STAMICO's subsidiaries were also transferred to the Treasury Registrar from where they were privatized by the Presidential Sector Reform Commission (PSRC). The new policies paved the way for private sector-led mineral development. With the private sector having become the engine of development, the government decided to close STAMICO down in 1996. This move was made in anticipation that the state would benefit more from the private multinational mining companies that had started to flow into Tanzania and invest in the mining sector. Expectations were high. However, STAMICO was not immediately closed and survived through the provision of consultancy services to the private mining companies. The government subsequently appointed commissions to review the benefits accrued from the private mining sector. After a thorough review, the Bomani Commission recommended the participation of the state in mining ventures and the re-strengthening of STAMICO. Thus, in July 2008, the government rescinded its decision to close STAMICO, whereby in April 2009 it was officially despecified. These developments led to the passage of the Mining Act 2010, which clearly stipulates that the government should own shares in new mines through STAMICO, with the state stake to be negotiated on a project-to-project basis. With the new policies in place, the government redefined STAMICO's role as: investing in mining through exploration; holding government shares in new mines; the provision of technical (drilling) and consulting services; and the coordination of the transformation of the artisanal and small-scale mining sub-sector into regulated, environmentally friendly, safe, productive, and sustainable operations.

What are some of STAMICO's largest domestic projects?

One of STAMICO's roles concerns investment, which means acquiring exploration licenses, developing them, and entering joint ventures. At present, STAMICO's joint ventures include the Buckreef Gold Project in Geita, which is a joint venture between STAMICO and the Tanzanian Royalty Exploration Company of Canada. STAMICO holds a 45% stake, while its partner holds the remaining 55%. The joint venture company is currently conducting feasibility studies that are set for completion by 2015. Exploratory work done so far has delineated a resource of about 2 million ounces of gold and exploration is still in progress. The project includes 12 prospecting licenses and a mining license. Another joint venture project is the Buhemba Gold Project located in the Musoma Greenstone Belt. The project involves the reassessment and processing of old mine tailings and exploration in the license area in order to reopen the Buhemba mine closed in 2005. STAMICO is negotiating a joint venture with Australian company Manjaro Resources (Pty) Limited for this.

STAMICO is to hold a 50% stake in TanzaniteOne. What are the details of this deal?

Under the new Mining Act of 2010, licenses for gemstones are exclusively reserved for Tanzanian nationals. However, where such gemstone mining requires special techniques and huge financial outlay, Tanzanians may enter into joint ventures with foreigners to undertake gemstone mining. Tanzanite is in this category and the owners of the mine, TanzaniteOne, had to partner with a Tanzanian entity in compliance with the 2010 Mining Act. STAMICO was considered by TanzaniteOne as the best candidate to enter into a joint venture with.