Tanzanian president fires minister and disbands minerals audit agency

 OMAR MOHAMMED | 24 MAY 2017 | BUSINESS DAY

Tanzanian President John Magufuli fired mines minister Sospeter Muhongo after an audit of containers of mineral sands showed exports had been understated.

An investigation initiated by Magufuli in March found that 277 containers held as much as 15.5 tonnes of gold, instead of the 1.1 tonnes declared, the president said on Wednesday in a speech broadcast live on state TV.

Magufuli also disbanded the Tanzania Minerals Audit Agency’s board, dismissed its CEO and asked authorities to investigate those responsible.

Magufuli banned mineral exports in March and ordered an audit of the mining industry to identify loopholes he said result in income losses as he tries to boost revenue from the industry for the state.

He’s also invited investors to build a smelter in the East African country to process its natural resources. The country is Africa’s third-biggest gold producer with companies including AngloGold Ashanti and Acacia Mining extracting the metal, and also produces copper, iron, zinc and diamonds.

Earlier on Wednesday, Magufuli asked Muhongo to resign after receiving the report on the contents of the containers seized at the port of Dar es Salaam in March: “I really like Prof Muhongo and he is a friend of mine, but on this he needs to re-think and re-assess without delay.”

The containers, which had mineral sands from mines including Buzwagi gold mine, owned by London-based Acacia, were located at a privately run terminal and awaiting customs procedures before being shipped overseas.

Acacia shares dropped as much as 17% to 360.40p in London, the biggest intra-day decline since March 3. The company said it fully declares everything of commercial value and pays appropriate royalties and taxes.

The ban on unprocessed metals should remain in place, according to the eight-member committee that carried out the investigation. The government should also construct a smelter as soon as possible, it recommended. “The government should retain the minerals-export ban until royalties reflective of the full value of the sands have been paid in full,” Abdulkarim Mruma, the committee chairman, said at the briefing on Wednesday.

The containers held as much as six tonnes of copper instead of the four tonnes declared and had many unrecorded minerals including iridium, iron and zinc, Magufuli said. “We have been given all these natural resources, but we are giving them away for free. This pains me a lot. It’s embarrassing.”

Magufuli has also ordered a separate probe into mineral exports over the past 19 years, which report will be ready soon, he said.