has contributed enormously since its inception in the country in 2000, as far as corporate social responsibility implementation in Geita District is concerned.
Speaking last week to a team of journalists from local media houses during their ‘seeing is believing’ visit to the mine, GGM’s Managing Director, Terry Mulpeter said “We aim at creating and share value with the communities in which we operate by addressing the needs and challenges wherever possible,” he noted.
The Geita mine is located in north western Tanzania, in the Lake Victoria goldfields of the Geita region, about 120km from Mwanza city and 4km west of the town of Geita.
The Geita gold deposit, which is currently mined as a multiple open pit operation, has underground potential and is currently serviced by a 5.2Mt per annum carbon in leach (CIL) processing plant.
GGM has significantly contributed to the education and health sectors. Construction of Nyankumbu girls’ secondary school, 37 classrooms at Geita and Nyakabale primary schools; 5 teachers’ houses and provision of 46 desks has been accomplished. Construction of Nyakabale clinic; support on cleft palate surgery and ‘Moyo wa huruma’ orphanage centre.
In order to ensure they work in line with the Tanzanian Mineral Policy 2009 and the Mining Act 2010 to enhance the potential contribution from the sector, GGM has further constructed two outpatient buildings; the HIV/AIDS and Malaria prevention and control programmes.
According to Mulpeter, GGM has invested over 957bn/- in Geita since 2000 when it started its operations in the country. And between 2012 and 13 alone, GGM has paid over 450bn/- in taxes and royalties to the government.
GGM boss said that in 2014, the company paid 2.1bn/- from its annual turnover as service levy to Geita Town Council. And it has invested around USD 6million in the Geita water project. Data indicate that over 100,000 inhabitants in and around Geita town were benefitting from this water project.
He further revealed that over 95 percent of the GGM employees are Tanzanians. Currently there are over 1800 direct jobs, with further 2000 plus jobs through contractors and suppliers. It also has localized a programme that aimed at ensuring 97 percent of its workforce were Tanzanians by the end of 2016.
When asked to comment on the relationship between GGM and the local authorities and the government, Mulpeter said that the relationship was good. “The government has been very supportive to us,” he noted.
Adding; “We have good communication with the government from the local level and that has worked out perfectly in terms of seeking solution to some of the challenges facing the community and some encountered in the operation of the plant,” he appreciated.
Large scale mining activities undoubtedly, can induce development in previously underdeveloped areas and contribute positively to the socio-economic development of the rural areas where mining activities take place.
As part of the international corporate social responsibility, mining can bring significant benefits to such communities as construction of roads, health, educational facilities, creation of jobs and other economic opportunities.
For example, among the potential benefits obtained by local communities from the GGM in Geita are social services which include; improved health care and education, improved water supplies and raised level of skills in work force.
In Tanzania, the mining companies’ investment in social development is registered by the Ministry of Minerals and incorporated into the calculations of the total revenue contributions of the sector under donations (Lange, 2006). The donations to community development by largest mines in the period 1992 to 2002 were USD 17 million in the whole period. USD 12 million (70 percent) was spent on water and roads.
As the case in other African countries, Tanzania has been attracting investors in the mining of gold and other gemstones especially in Kahama, Tarime and Geita districts; less has been documented regarding socio-economic benefits accrued by local communities. These include provision of education facilities, employment, water, road network improvements, provision of soft loans to local people and health services.
Literature shows further that, poor management of earnings from valuable natural resources results in a syndrome known as Dutch Disease, characterized by real exchange rate appreciation, high labour costs, and structural imbalances in economic development. Dutch Disease undermines long-term economic performance in resource dependent economies resulting in a ‘resource curse.’
Large-scale mining operations invest substantially in local community development through providing training, public services such as education and health; public goods such as clean water, transport, energy and infrastructures such as schools, health centres, water supply systems.
It is assumed that all mining can be accompanied by the growth of small and micro-enterprise activities, providing supplies and related services to mining companies, miners and their families leading to generation of substantial further incomes (World Bank, 2005).
Traditionally, good relations with the local community have not been an important part of the mining culture in the developing countries.
However, the GGM revealed that most of goals have been attained, but we look further to commit ourselves into sustainable projects that are vital for social and economic development not only for Geita residents but our country as well. GGM normally has a 10 years plan in accomplishing goals set for community development adhering to the SDGs and Tanzania vision 2025.
We have committed a lot to do to the community close to us. But, we cannot accomplish every individual needs. We work for sustainable projects of which will be of great benefit to the community once the mine is closed.
In Tanzania, the mining sector contributes to the economy through employment, supplier contracts, investments, payment of government taxes and multiplier effects from business linkages to other sectors.
The mining sector recorded an impressive growth rate of 7.8 per cent in 2012, up from just 2.2 percent in 2011, helped by increased investments in the capital-intensive industry.
Generally, the sector’s contribution to the national economic output, or gross domestic product (GDP) increased from 3.3 percent to 3.5 percent from 2011 to 2012 respectively.
The government's National Development Vision estimates that the contribution of mining to GDP will reach 10 per cent by 2025.
Gold accounted for 94 per cent of the country's total mineral exports in 2012, maintaining Tanzania’s position as Africa's fourth-largest producer of the precious metal.
Gold exports are ranked the country's top foreign exchange earner, ahead of tourism, agriculture and manufacturing. The major players in the country’s gold mining industry are AngloGold Ashanti and African Barrick Gold (ABG).
According to data from the Bank of Tanzania (BoT) and the Tanzania Chamber of Minerals and Energy (TCME), the mining sector now directly employs over 15,000 people from just 1,781 mining jobs in 1997 when the large-scale mining industry was making its first baby steps.
The sector’s over the years has in turn created thousands of jobs in other sectors. Under the multiplier effect, one job in the mining sector creates four new jobs in other sectors of the economy.
Between 1997 and 2012, mining companies paid a total of $1.339 billion (2.17 trillion shillings) to the government in terms of royalties, statutory taxes and other contributions.
Mining companies also paid $713.122 million (1.155 trillion shillings) for local salaries for their employees, while $40.94 million (over 66 billion shillings) was invested in the training of Tanzanian employees.
Mining firms invested $50.8 million (over 82 billion shillings) in corporate social responsibility and over $58 million (94 billion shillings) in infrastructure development during the period under review (1997-2012).
To date mining companies are the largest contributors to host communities by investing significantly in community projects, more than any other industry in the country.
Daniel Semberya is a sub editor-(Features section). Email: dnlsemberya@gmail.com
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