Twiga Mineral Corporation stands tall

Named after a large African hoofed mammal, giraffe, barely three years after establishment, Twiga Minerals Corporation stands strikingly tall just like its namesake in the great Serengeti National Park grassland.

Since its establishment Twiga Minerals Corporation has demonstrated the value-creating capacity of a true partnership between a mining company and its host nation, reflecting the sixth phase’s government anticipation on improving investment climate and embracing partnerships with the world’s largest miners, among other measures that seek to achieve its determination to almost double the contribution of the mining sector to the economy.

On her inaugural speech to Parliament last year, President Samia Suluhu Hassan said the contribution of the mining sector to the gross domestic product (GDP) increased from 3.4 percent in 2015 to 5.2 percent in 2019. Its revenue also increased from 168bn/- in 2014/2015 to 527bn/- in 2019/2020.

Nevertheless, President Samia wants to improve the economic contribution of the mining sector to at least 10 percent of the GDP by 2025.

“The sixth phase government intends to accelerate this success by enforcing the Mining Act of 2017, continuing to control smuggling and remove investment barriers to attract and facilitate government negotiations and ultimately enter into partnerships with the world’s largest miners,” she told the Parliament in the inaugural speech.

Twiga Mineral is a joint venture between Barrick and the government of Tanzania, and oversees the management of Barrick’s assets in Tanzania, North Mara and Bulyanhulu Gold Mines, as well as the implementation of the economic benefit-sharing agreement.

It was formed when Barrick took over the operations of the former Acacia Mining in September 2019 and subsequently entered into a framework agreement with the government.

Since Barrick assumed operational control in 2019, noteworthy progress at North Mara and Bulyanhulu has been made. North Mara and Bulyanhulu significantly grew mineral reserves net of depletion at the end of 2021 and exploration footprint increased around Bulyanhulu.

In May 2022, Barrick announced it would spend 6 dollars for every ounce of gold sold by its two mines, North Mara and Bulyanhulu to improve healthcare, education, infrastructure and access to potable water in the communities around them.

At the same time, it committed up to 70 million US dollars for investment in value-adding national projects, including mining-related training, skills development and scientific facilities at Tanzanian universities, as well as road infrastructure.

Barrick has spent more than 1.9 billion dollars in taxes, salaries and payments to local businesses since its joint venture with the government. At least 73 per cent of the mines’ goods and services are sourced locally and they give preference to the employment of Tanzanian nationals.

Since Barrick formed a joint venture with the government to form Twiga Minerals, the then dilapidated North Mara and Bulyanhulu have been revived, returned to profitability and are now truly world-class assets, with the potential to join the Barrick’s Tier One gold complex family, and become the seventh in the company Tier one family tree.  It has also made significant progress in dealing with legacy social and environmental issues and is returning substantial value to its Tanzanian stakeholders.

Its contribution to the government coffers has been steady and increasing ever since, in 2020 the government received more than 370 million US dollars (TShs 856 billion) in cash inflows from the Twiga partnership through taxes, dividends. It has now paid 140 million dollars of its 300 million dollars settlement with the government.

Barrick has also invested 800 million dollars (1.851tri/-) in the country’s economy, spent 2.0 million dollars  (about 4.6bn/- ) on community development and recruited 600 new local employees, with Tanzanian nationals now making up 96 percent  of the mines’ workforce. It also works closely with the Mining Commission on its local content programme, and local content spending already accounts for 73 percent of the mines’ purchases.

After meeting President Samia in July last year to review progress at Twiga Minerals Corporation, Barrick Gold Corporation president and chief executive Mark Bristow said that the meeting had been a highly constructive one in which both parties had agreed that the success of the Twiga joint venture – a first for Africa – had demonstrated the value that could be created by a genuine economic benefit sharing partnership between a mining company and its host country.

“I confirmed that Barrick was in Tanzania for the long term and that we’ll be using our North Mara-Bulyanhulu complex as the base for further investment in the country, which is highly prospective but still largely unexplored.  We see the potential for more world-class gold discoveries here but in order to achieve exploration success we need to keep turning over our licenses and assessing new ground.  The process of acquiring new licenses is ongoing,” he said.

To local communities the mines are leaving no stone unturned, at the North Mara, it has established a local business development programme to help local businesses grow. The program provides workshops and mentorship opportunities for local businesses to help them take their enterprises to the next level.

Mentors for the programme are well renowned industry leaders and organizations form the Ministry of Minerals, Tanzania Revenue Authority, financial institutions and the Dar es Salaam Stock Exchange. So far 15 businesses are participating. Four workshops have been provided since November 2021 covering topics such as, value proposition, market size and product offering, access to finance, business plans and growth strategies as well as investment readiness and corporate governance, including the establishment of a board of directors.

The venture enabled the ecologically friendly closure of of Buzwagi Mine in 2021. At its peak, Buzwagi was the second largest operating mine in Tanzania and employed more than 3,000 people.

Barrick’s plan is to ensure that Buzwagi remains an economic powerhouse for local communities and Tanzania. To do that it is looking into establishing the Buzwagi Special Economic Zone (BSEZ).

The aim of the BSEZ will be to turn Buzwagi’s mining area into a business area to generate similar benefits the mine was providing to the local municipality and its surrounding communities through taxes, fees, and new employment opportunities.

The feasibility study for the BSEZ showed it has the potential to create approximately 3,200 jobs per year, generate more than 150,000 dollars per year in service levies for the local municipality over the short term, and as much as 1.3 million dollars in the long term and generate Pay As You Earn (PAYE) taxes for the Tanzanian government of as much as 4.5 million dollars over the short term and more than 18 million dollars over the long term.

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