Coal Production and Sales at Ngaka Coal Mine, 2013
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Message from the Acting Chief Executive Officer This Annual Report highlights key outcomes recorded in year 2013. Tanzania Minerals Audit Agency (TMAA) marked four 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 the diverse knowledge, expertise, hard work and dedication of the 93 staff currently employed at TMAA. In our 2012 Annual Report we promised to forge ahead with our efforts aimed at ensuring maximization of Government revenue from the mineral sector. Following completion of year 2013, it is my pleasure to report the following key outcomes: - A total of TZS 310.66 billion was collected by the Government as royalty and taxes from the large scale mines. - A total of TZS 2.7 billion was collected as royalty from some medium and small scale mining operations as a result of TMAA's strategic audits. - Continued improvements in compliance to environmental management best practices by large and medium scale mines as a result of TMAA environmental audits. - Enhanced curtailing of illegal trading and smuggling of minerals whereby 32 incidents were reported for minerals worth TZS 2 billion. In each quarter of 2013, the Agency had good performance results. This was greatly contributed by embracing TMAA’s core values, which are Integrity, Excellence, Teamwork and Customer-Focused. We are very pleased with the support that we received from the Minister for Energy and Minerals (Hon. Prof. Sospeter M. Muhongo), Deputy Minister for Energy and Minerals (Hon. Stephen J. Masele), Permanent Secretary (Mr. Eliakim C. Maswi) and Former Acting Commissioner for Minerals (Eng. Ally Samaje). I wish to thank all TMAA staff who are responsible for implementing the Agency’s Action Plan and normally work hard to ensure that our goals and targets are met. I am convinced that, the aim of the Government to maximize its revenues from the mineral sector is progressively being realized. ii We are building TMAA on a solid foundation and in that regard we acknowledge our former CEO, Eng. Paul M. Masanja, now Commissioner for Minerals, for his outstanding contribution to TMAA’s success. TMAA shall aggressively continue to monitor and audit large, medium and small scale mining operations in year 2014 so as to ensure that owners make the required payments to the Government and conduct their activities in a sound environmental manner. I am optimistic that 2014 will end with more successes in comparison to those scored in 2013. I trust you will find our 2013 Annual Report informative, and I encourage you to send us your feedback. Mining for National Development. Eng. Dominic K. Rwekaza Ag. CHIEF EXECUTIVE OFFICER iii Table of Contents GLOSSARY OF TERMS ................................................................................................... VII 2013 PERFORMANCE HIGHLIGHTS ............................................................................... 1 1.0 MANAGEMENT OVERVIEW ..................................................................................... 6 2.0 TARGETS FOR 2013 .................................................................................................. 7 3.0 AUDIT RESULTS AND PERFORMANCE FOR 2013 ................................................ 9 3.1 AUDITING OF MINERALS PRODUCED AND EXPORTED ............................. 9 3.1.1 Minerals Produced by Major Gold Mines in 2013 ....................................................... 9 3.1.2 Minerals Exported by Major Gold Mines in 2013 ...................................................... 11 3.1.3 Tulawaka Mine Closure ......................................................................................................... 13 3.1.4 Auditing of Diamonds Production and Exports ......................................................... 13 3.1.5 Auditing of Tanzanite Production and Exports .......................................................... 14 3.1.6 Auditing of Coal Production at Ngaka Coal Mine ..................................................... 15 3.1.7 Auditing of Building Materials and Industrial Minerals .......................................... 15 3.1.8 Auditing of Gold Produced and Sold by Vat Leaching Operators ..................... 16 3.1.9 Mineral Royalty Payments for 2013 ................................................................................. 16 3.1.10 Combating Minerals Smuggling and Illegal Trading ............................................... 16 3.2 FINANCIAL AUDIT AND TAX REVIEW ........................................................ 18 3.2.1 Financial Audit and Tax Review Results for 2013 ...................................................... 18 3.2.2 Achievements Resulting from TMAA's Financial Audits ......................................... 18 3.2.3 Government Revenue Projection ...................................................................................... 19 3.3 ENVIRONMENTAL MONITORING AND AUDITING .................................. 22 4.0 HISTORICAL DATA ................................................................................................. 27 5.0 UPDATE ON PROSPECTIVE PROJECTS................................................................. 36 5.1 Mkuju River Project ...................................................................................... 36 5.2 Kabanga Nickel Project ................................................................................ 37 5.3 Mchuchuma-Liganga Project ...................................................................... 38 5.4 Nyanzaga Gold Project ................................................................................. 39 6.0 CHALLENGES FACED IN 2013 ............................................................................... 40 7.0 PLANNED ACTIVITIES FOR 2014 .......................................................................... 41 8.0 CONCLUSION .......................................................................................................... 43 iv List of Tables Table 1: Key Achievements in 2013 ............................................................................................................... 3 Table 2: Targets for 2013 ................................................................................................................................... 7 Table 3: Minerals Produced by Major Gold Mines in 2013 ................................................................. 10 Table 4: Quantity and Value of Minerals Exported by Major Gold Mines, 2013 ......................... 11 Table 5: Minerals Production, Export and Royalty Payments (2013) ............................................... 12 Table 6: Diamonds Production and Export, 2013 ................................................................................... 14 Table 7: Tanzanite Production and Exports by TTM, 2013 .................................................................. 14 Table 8: Coal Production and Sales at Ngaka Coal Mine, 2013 ......................................................... 15 Table 9: Building Materials and Industrial Minerals Production in the Eastern, Southern, Lake Victoria and Central Zones, 2013 ................................................................................................. 16 Table 10: Unresolved Queries Communicated to TRA ............................................................................ 18 Table 11: Projected Mine Output, Revenue and Government Take (Undiscounted) from 8 Large Scale Mines, 2014 - 2023 .................................................................................................... 21 Table 12: Summary of Environmental Measures Taken by Large and Medium Scale Mines .... 22 Table 13: Major Shortfalls on Environmental Management Noted at Large and Medium Scale Mining Operations ............................................................................................................................ 25 Table 14: Profiles of Seven Large Scale Gold Mines ................................................................................. 27 Table 15: Tax & Royalty Payments by 9 Major Mines, 1999 – 2013 (TZS Billion) .......................... 27 Table 16: Historical Minerals Sales by Major Mines (1999 - 2013) ..................................................... 28 Table 17: Minerals Produced by Medium and Small Scale Miners (2008 - 2013) ......................... 29 Table 18: Procurement of Goods and Services by Large Scale Mines (2001 – 2013) ................... 32 Table 19: Tanzania Mineral Reserves for Selected Minerals and Projects (December 2013) .... 33 Table 20: Status of Employment in the Major Gold Mines – Number of Locals versus Expatriates ............................................................................................................................................ 35 Table 21: Targets for 2014 ................................................................................................................................. 41 v List of Figures Figure 1: Gold Production, 2013 - Contribution by Mine ...................................................................... 10 Figure 2: Total Gold Export Quantity, 2013 - Contribution by Mine ................................................. 12 Figure 3: Africa's Top Four Gold Producing Countries (2008 – 2013) ............................................... 28 Figure 4: Gold Exports by Large Scale Gold Mines (2000 - 2013) .....................................................