BoT, mining firms partner to improve gold purchase

DAR ES SALAAM: THE Bank of Tanzania (BoT) has signed contracts with four mining firms and a gold refinery plant aimed at enhancing the purchase and refining of gold.

The move is in line with Section 59 of the Mining Act, which requires miners to allocate 20 per cent of their production for domestic sales, including to the Bank of Tanzania.

The companies involved in the lucrative deals signed in Dodoma on Monday were Geita Gold Mining (GGM), Shanta, Buckreef and the Geita Gold Refinery (GGR).

Speaking shortly after witnessing the signing of the deal, Finance Minister Dr Mwigulu Nchemba urged local gold refineries to take advantage of the opportunity by increasing their refining capacity to meet international standards, particularly those set by the London Bullion Market Association (LBMA).

He said the initiative will enable BoT to have reliable sources to implement its gold purchasing programme.

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“This step will also help domestic gold refineries to achieve international LBMA certification,” said the Minister for Finance. He acknowledged challenges BoT faces in gold purchasing, including legal issues regarding the buying of silver, as well as Value Added Tax (VAT) on refining costs and expenses involved in storing gold abroad via gold swapping arrangements.

However, Dr Nchemba promised that the government will continue to address the said challenges in line with the country’s laws and procedures.

According to the Minister, the Central Bank has significantly increased its gold purchases from the Tanzanian market.

“We expect to meet our goal of purchasing six tonnes of gold in the 2024/25 financial year to strengthen our foreign reserves.” On his part, Minister for Minerals Anthony Mavunde said although the process initially faced hurdles, the amendment to the Mining Act, mandating 20 per cent of produced gold to be bought by BoT, paved the way for smoother implementation.

“Today is a historic day. Both small and large miners are now attracted to selling their gold to BoT. It’s a day I’ll sleep soundly knowing we are building our national reserves and leveraging our resources to grow the economy,” he said.

He emphasised the government’s commitment to adding value to minerals, noting that eight local refineries are operational and being encouraged to expand their work.

BoT Governor, Emmanuel Tutuba noted that through its gold purchasing initiative, the Central Bank is increasing its gold holdings as an alternative means of boosting foreign exchange reserves and stabilising the Tanzanian currency.

Available data shows that as of June 13 this year, BoT had purchased 5,022 kilogrammes (5.022 tonnes) of pure gold valued at 554 million US dollar surpassing the target of 350 million US dollar. The gold was sourced from three local refining plants.

“The gold we buy meets international standards and is bought at favourable prices, with sellers expressing satisfaction so far, we have received no complaints regarding pricing,” Tutuba said.

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He added: “BoT is committed to making payments within 24 hours of purchase, and we’ve maintained that commitment.” Sharing the current storage status of the gold details, the BoT chief stated that 162 kilogrammes are stored in BoT’s account at the Bank of England, 2,775 kilogrammes in BoT Mwanza Branch and 719 kilogrammes at the Dodoma Branch, with more to be transported to the UK shortly.

Earlier, speaking on behalf of the negotiation team, Deputy Attorney General Samweli Maneno said discussions that led to these agreements were now complete and within the week they expect to conclude talks with Barrick Gold Corporation.

“This move supports the Mining Act’s mandate requiring 20 per cent of gold production to be sold to BoT, while also helping the government build foreign reserves and enabling local gold refineries to access raw materials and attain international certification.” Geita Gold Mining Managing Director, Duran Archery, expressed gratitude for his company’s inclusion in the national initiative.

“This is a great example of public-private partnership. GGM is proud to be a leader in making these visions a reality,” he explained.