TANZANIA MINERALS AUDIT AGENCY VISION to Be a Centre of Excellence in Monitoring and Auditing of Mining Operations
Total Page:16
File Type:pdf, Size:1020Kb
THE UNITED REPUBLIC OF TANZANIA MINISTRY OF ENERGY AND MINERALS TANZANIA MINERALS AUDIT AGENCY VISION To be a centre of excellence in monitoring and auditing of mining operations. MISSION To conduct financial and environmental audits as well as auditing of quality and quantity of minerals produced and exported by miners in order to maximize benefits to the Government from the mining industry for sustainable development of the Country. CORE FUNCTIONS Auditing of Auditing of environmental Auditing of capital budget and quality and investment and expenditure of quantity of operating the mining produced and expenditure of entities for the exported the mining purpose of minerals by entities for the assessment of mining entities purpose of tax compliance to assessments the mine closure plan. Tanzania Minerals Audit Agency (TMAA) marked five years of its establishment by recording good performances as highlighted in this Annual Report. This has been made possible through the keen leadership of TMAA’s Ministerial Advisory Board combined with diverse skills, experience, commitment, hard work and dedication of staff. In the Annual Report for year 2013 we promised to continue improving our audits with the aim of ensuring maximization of Government revenue from the mineral sector. Following completion of year 2014, it is my sincere pleasure to report the following key outcomes: i. A total of TZS 101.3 billion was collected as royalty from the large scale mines, while total royalty payable decreased by 5.6% to TZS 107.38 billion compared to TZS 113.78 billion realized in year 2013. The decrease was mainly attributed by lower gold prices and closure of one major gold mine. ii. A total of TZS 428.24 billion was collected by the Government as taxes and levies from the large scale mines, up by 29.5% compared to TZS 330.76 collected in year 2013. iii. A total of TZS 4.1 billion was collected as royalty from licensed miners dealing in building materials and industrial minerals as a result of TMAA's strategic audits, up by 141% compared to TZS 1.7 billion realized in year 2013. iv. A total of TZS 2.3 billion was collected as royalty from mineral licensees with elution plants operating in Geita, Mwanza and Mbeya regions as a result of TMAA's strategic audits, up by 135% compared to TZS 981 million realized in year 2013. v. Continued improvements in compliance to environmental management best practices by large, medium and some small scale mines as a result of TMAA environmental audits. i vi. Enhanced curtailing of illegal trading and smuggling of minerals whereby 27 incidents were reported for minerals worth TZS 832 million. In each quarter of year 2014, the Agency recorded good performance results. This was greatly contributed by embracing the ethics and values of the Agency. On the other hand, support from the Ministry of Energy and Minerals was also vital to the Agency’s performance. With deep gratitude and appreciation, I would like to thank all TMAA staff for teamwork and cooperation in implementing the Agency’s Action Plan that ensured that our goals and targets are significantly met. I am convinced that, the aim of the Government to maximize its revenues from the mineral sector is progressively being realized. TMAA shall aggressively continue to monitor and audit large, medium and small scale mining operations in year 2015 so as to ensure that mineral rights holders make the required payments to the Government and conduct their activities in a sound environmental manner. I am optimistic that there will be more successes in year 2015 compared to those achieved in year 2014 as we continue working hard to build excellence across the organization. I trust you will find our 2014 Annual Report informative, and I encourage you to send us your feedback. Mining for Sustainable National Development. ii Table of Contents GLOSSARY OF TERMS ...................................................................................... VI 2014 PERFORMANCE HIGHLIGHTS .................................................................... 1 1.0 WORK PLANNED FOR YEAR 2014 ................................................................ 7 2.0 AUDIT RESULTS AND PERFORMANCE FOR YEAR 2014 .................................. 9 2.1 AUDITING OF MINERALS PRODUCED AND EXPORTED ........................... 9 2.1.1 Minerals Produced by Major Gold Mines in Year 2014 .......................... 10 2.1.2 Minerals Exported by Major Gold Mines in Year 2014 ........................... 11 2.1.3 Auditing of Diamonds Production and Exports ..................................... 12 2.1.4 Auditing of Tanzanite Production and Exports ...................................... 13 2.1.5 Auditing of Coal Production and Sales ................................................. 14 2.1.6 Auditing of Building Materials and Industrial Minerals........................... 14 2.1.7 Auditing of Gold Produced and Sold by Vat Leaching and Elution Plant Operators ........................................................................................... 16 2.1.8 Mineral Royalty Payments for Year 2014 .............................................. 16 2.1.9 Combating Minerals Smuggling and Illegal Trading .............................. 17 2.2 FINANCIAL AUDIT AND TAX REVIEW .................................................. 18 2.2.1 Financial Audit and Tax Review Results for Year 2014 ........................... 18 2.2.2 Achievements Resulting from TMAA's Financial Audits ......................... 19 2.3 ENVIRONMENTAL MONITORING AND AUDITING ................................ 20 3.0 HISTORICAL DATA ................................................................................... 27 4.0 UPDATE ON PROSPECTIVE PROJECTS ........................................................ 42 4.1 Mkuju River Project .......................................................................... 42 4.2 Kabanga Nickel Project ..................................................................... 43 4.3 Mchuchuma-Liganga Project ............................................................. 44 4.4 Nyanzaga Gold Project ..................................................................... 44 5.0 CHALLENGES FACED IN YEAR 2014 .......................................................... 45 6.0 PLANNED ACTIVITIES FOR YEAR 2015 ........................................................ 46 7.0 CONCLUSION .......................................................................................... 49 iii Table 1: Key Achievements in Year 2014 ................................................................ 3 Table 2: Work Planned for Year 2014 .................................................................... 7 Table 3: Minerals Produced by Major Gold Mines in Year 2014 ............................. 10 Table 4: Quantity and Value of Minerals Exported by Major Gold Mines, 2014 ..... 11 Table 5: Diamonds Production and Export, 2014 .................................................. 13 Table 6: Tanzanite Production and Exports by TTM, 2014 ..................................... 13 Table 7: Coal Production and Sales at Ngaka Coal Mine, 2014 .............................. 14 Table 8: Building Materials and Industrial Minerals Production in Year 2014 ......... 15 Table 9: Gold Produced at Vat Leaching/ Elution Plants in Mwanza, Geita and Mbeya regions ..................................................................................... 16 Table 10: Unresolved Queries Communicated to TRA (2014) ................................ 18 Table 11: Summary of Environmental Measures Taken by Large and Medium Scale Mines.......................................................................................... 20 Table 12: Common Shortfalls on Environmental Management Noted at Large and Medium Scale Mining Operations ................................................... 23 Table 13: Common Shortfalls on Environmental Management Noted at Small Scale Mining, Vat leaching and Elution Plant Sites .................................. 25 Table 14: Profiles of Seven Large Scale Gold Mines .............................................. 27 Table 15: Tax & Royalty Payments by 9 Major Mines, 1999 – 2014 (TZS Billion) ....... 27 Table 16: Historical Minerals Sales by Major Mines (1999 - 2014) .......................... 28 Table 17: Historical Tax Payments by Major Mines (2006 - 2014, Amounts in TZS Bil.) ............................................................................................... 35 Table 18: Procurement of Goods and Services by Large Scale Mines (2001 – 2014) ...................................................................................... 37 Table 19: Tanzania Mineral Reserves for Selected Minerals and Projects (December 2014) ................................................................................. 38 Table 20: Status of Employment in the Major Mines – Number of Locals versus Expatriates ........................................................................................... 41 Table 21: Planned Activities for Year 2015 ........................................................... 46 iv Figure 1: Gold Production, 2014 - Contribution by Mine............................ 11 Figure 2: Total Gold Export Quantity, 2014 - Contribution by Mine ............ 12 Figure 3: Historical Gold Exports by Major Mines (2000- 2014) .................. 29 Figure 4: Total Gold Exports by Large Scale Gold Mines (2001 - 2014) ........ 30 Figure 5: Historical Minerals Export Value by Major Mines (2000 - 2014) .... 31 Figure 6: Total Gold Export Value by Large Scale Gold Mines