Tanzania’s gold rush and housing crush

Villagers say mining has polluted water and destroyed homes, but Canadian firm denies all charges.

Kahama, Tanzania – The mango tree they chose to assemble under is by far the biggest tree around. It’s so big and its leaves so dense, it gives shelter to dozens of people. At a closer look, however, the leaves are coated with a layer of fine grey dust.

“That’s also from the mine,” says Generous Mayenda, glancing at the waste dumps of the Buzwagi Gold Mine owned by London-listed company African Barrick Gold (ABG). The Canadian-owned  firm is Tanzania’s biggest gold producer, owning three of the country’s five gold mines.

Mayenda looks tired. The red of the Manchester United cap on her head has faded over time, and her shoes are dirty and full of holes.

“One day in 2012 there was a massive blast, one of those that make the ground shake. It happens when they advance into a new rock layer,” she says.

That night when it rained, one of the buildings at her home collapsed. “A few weeks later, another one came down,” she says.

The government failed to develop an effective system of communication with the communities. That's why the communities feel left behind, because all they see is companies coming into their area, sometimes even with force.

by - Silas Olang, Revenue Watch Institute non-profit group

Mayenda says the Buzwagi Gold Mine is the reason the buildings collapsed, and she is not alone. Other villagers say their mud houses crack and collapse because of blasting at the open pit – Tanzania’s largest. They say their children’s coughs come from the dust blown over the village, and the water from the local wells is polluted from mine waste.

Jumane Mpemba, a local representative, says about 200 mud houses have collapsed since the mine started operations in 2009, including two belonging to his family. “We have complained to the local authority many times, but never got an answer,” says Mpemba.

African Barrick Gold, however, denies that mine blasting is bringing down homes.

In a statement to Al Jazeera issued through its London-based PR agency Bell Pottinger, the company says it monitored blasting over a six-month period and found “there was no effects from the blasts, rather, most houses that were claimed to have been affected were a product of bad workmanship with the residents trying to get compensation”.

The company admits the community “didn’t accept the results” of its investigation. Residents here say they have never been informed about what is happening around them.

Company representatives have only attended three of eight scheduled meetings with community leaders, Mpemba says.

Silas Olang is from Revenue Watch Institute , a non-profit group that promotes resource development that benefits local populations. He also blames Tanzanian authorities for neglecting communities in resource-extraction areas.

“The government failed to develop an effective system of communication with the communities,” says Olang. “That’s why the communities feel left behind, because all they see is companies coming into their area, sometimes even with force.”

Follow the money

Revenue Watch monitors the management of commodities in 58 mineral-rich countries and publishes an annual Resource Governance Index. In 2013, Tanzania performed poorly on the index, ranking 27th, mainly because of a lack of transparency.

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“It is very problematic to track the revenues from mining in Tanzania,” says Olang. “But then it is also very difficult to find out what the money from mining is spent on. We don’t know anything about the relationship between the government and the companies.”

With estimated gold reserves of about 45 million ounces (1,275 tonnes), Tanzania has become the third-largest gold producer in Africa, after South Africa and Ghana. According to the Bank of Tanzania, it exported $2.3bn worth of gold in the fiscal year 2011-12. The mining sector’s contribution to Tanzania’s GDP more than tripled between the mid-1990s and 2012, according to Revenue Watch.

However, since the mining boom started in the early 1990s, the East African country has failed to transform this into wealth for communities near the mines, critics say.

But African Barrick Gold disagrees. “In 2012, ABG’s made a total contribution of over $980 million to the Tanzanian economy, which represents over three percent of total Tanzanian gross domestic product,” it said in a press release.

What is indisputable is that the presence of large-scale mining operations often provokes conflicts with local residents.

In 2009, spillage from African Barrick Gold’s North Mara mine was thought to have  contaminated the Tigithe River, from which more than 2,500 households get their water. People and cattle became severely ill and some livestock  reportedly died  from cyanide in the groundwater. Residents still report problems with their drinking water today.

Harold Sungusia, from the Legal & Human Rights Centre , says a lawsuit involving 1,451 complainants was filed against African Barrick Gold over the pollution in 2010, but nothing has yet happened.

“We have a list of the names and the extent of the damage … Skin diseases and damage to their livestock are the charges. You can go there and see them, they are still suffering from the problems,” Sungusia says.

But James Macfarlane from the company’s PR firm, Bell Pottinger, denies any such problems.    

“That was a one-off spill and only occurred due to the theft of impermeable liners from the mine. Once aware of the spill, we contained it and have invested significant capital into rehabilitating all areas affected by it. This process is now complete and we have now been granted the permits to discharge water once again,” says Macfarlane.

Cracks are common in houses near the Buzwagi Gold Mine
[Victoria Schneider/Al Jazeera]

“Minor spills occasionally occur on mine properties and are immediately isolated and the affected areas are rehabilitated. We track these internally and continue to strive to reduce the number to zero.”

Bad deals

Critics allege mining and other corporations operating in Tanzania don’t pay a fair share of taxes, robbing the country of much-needed revenue. With about 45 million people, the country’s poverty rate  stands at 65 percent. A lack of transparency over government deals with foreign resource companies has also been problematic.

Critics highlight the Buzwagi mining contract that leaked to the media in 2007. It was reportedly signed in London by then minister of mines and energy Nazir Karamagi, without being reviewed by Tanzania’s parliament.

Before the signing, Karamagi reportedly promised significant tax revenues would be gained through the deal that would benefit locals, but that never came to fruition. “It was one of the bad ones,” recalls Olang. “It wasn’t clear on taxes and revenues, and on the company’s environmental obligations.”

The public investment management system is not very transparent, and communities are not finding how much is invested in their communities.

by - Jacques Morisset, World Bank economist

Olang says the Buzwagi contract was only one example of the failure of Tanzania’s legislative system, in which “neither the companies nor the government is obliged to disclose anything”.

He says one mechanism that could help would be the government’s implementation of the Extractive Industries Transparency Initiative (EITI), funded by the World Bank, for which Tanzania qualified in 2009. Olang remains sceptical that will happen, however.

“The government is trying to implement the contract, but that is yet to be seen,” he says.

Jacques Morisset, the World Bank’s lead economist for Tanzania, Burundi and Uganda, agrees that Dar es Salaam’s deals with the resource extraction industry haven’t been transparent, but he calls for patience.

“The public investment management system is not very transparent, and communities are not finding how much is invested in their communities,” Morisset told Al Jazeera. “The first goal at the beginning was to attract investors. The development can only happen step by step … Now it has to be ensured that the revenues from mining are used efficiently.”

But back at the Buzwagi Gold Mine, patience has long run out.

Generous Mayenda now rents a room in the house of a woman she doesn’t know, after her home collapsed last year. She points to two wells where she gets her water. Vegetation surrounding the water supply is covered in greyish slime. She says no-one has come to test its safety.

As she approaches the ruins of her former house, machinery and heavy vehicles from the mine roar in the distance. She walks silently towards the three walls left standing. Mayenda kneels down amid the rubble she used to call home. 

Follow Victoria Schneider on Twitter at the Dirty Profits Exposed project: @DirtyProfitsExp

This report was produced with the support of the  Facing Finance  campaign.

Source: Al Jazeera