AFRICANEWS

Tanzania

Miners accuse company of setting monopoly

Mining/human rights

Small-scale miners in Mererani, Tanzania, have accused African Gemstones Ltd. (Afgem) of trying to physically and financially squeeze them out of the lucrative tanzanite market. In turn, the Johannesburg-based company says it is being a good corporate citizen by setting higher standards for the mining industry and preventing smuggling.

Amidst charges of racism and brutality, a South African mining company operating near Arusha, Tanzania is poised to capture the $100 million-a-year world market in tanzanite, a gemstone found only in Northern Tanzania.

African Gemstones Ltd. (Afgem), based in Johannesburg, has been mining tanzanite at its eight square kilometre Block C site at Mererani, 100 kilometres north east of Arusha, since January 2000. It had received its mining concession from the Tanzanian government in mid-1999.

Since January 2000, the company has mined 4,216 tonnes of tanzanite ore, says Joe Kimble, General Manager of Afgem Tanzania. He estimates that Block C has a total reserve of 2.2 million tonnes of tanzanite ore, which translates to 10 tonnes of tanzanite in various grades. According to geological studies, gems in Block C are found from a few metres to 150 metres beneath the surface, he says.

Along with Block C, three other mining plots - Blocks A, B, and D - comprise a total area of approximately 20 square kilometres where the tanzanite is found. Block A is owned by another firm, Kilimanjaro Mines Ltd., while small-scale artisan miners own, and work on, mines in the other two blocks.

It is not known how the Tanzanian government concluded that Block C was the most suitable for a foreign investor. When asked for geological details of the other sites, the local Zonal Mining Office refused to comment, claiming the matter was "sensitive."

Although Afgem's presence has received the invitation and blessing of the Tanzanian government because of the company's US$8 million investment to date and its plans to invest a further US$12million once it starts its full-scale operations, small-scale miners in Mererani have a different story to tell.

They accuse the company of trying to squeeze them out of the tanzanite market by creating a monopoly-type situation. "They (Afgem) want to drive us out of business so that they can get the whole area," says Awadh Omar, a miner and Chairman of Mererani Village.

"Mererani will be a basket case if Afgem stays. They will kick us out of the mines, dig up the area, mine the Tanzanite and ship it to South Africa. What remains? Unemployment and frustration since mining is the only occupation here," says Almasi Juma, a small-scale miner who for the past five years has been using the mining proceeds to support his family of two. Iddi Nangu, 45, who abandoned his small-scale business for Tanzanite mining concurs: "Afgem is crazy. They found us here, yet they want us out."

Approximately 10,000 small-scale artisan miners are employed in 750 mines in Blocks B and D, according to the Federation of Mining Associations of Tanzania (FEDEMA) and Arusha Regional Mining Association (AREMA), independent bodies that represent small miners. They estimate that tanzanite mining and trade supports 300,000 people and is responsible for the steady growth of this dust-blown town and its larger neighbours such as Arusha, Moshi, Boma, Karangai, King'ori, Usa, Tengeru, and Kikatiti.

AREMA says that Afgem is taking a number of steps to capture the tanzanite market and marginalize the miners. According to AREMA, Afgem laser brands its tanzanite exports to guarantee quality and ensure there is no fake tanzanite. As a result, the unbranded stones of the small-scale miners are considered to be forgeries, since only Afgem mines the gemstones. Other rumours such as small-scale miners using children to mine their gems also abound.

"That is what we are against. Monopoly," says Hamisi Rioba, AREMA's Chairman. "Where do they want us to sell our products?" A trader quoted in the local newspaper concurs: "If you take gemstones not branded with the Afgem logo abroad, it is like you have either stolen them or they are fake." Indeed, some of the affected traders ended up selling their stones to Afgem agents or returning home with their tanzanite.

Afgem's Kimble denies that the company seeks to create a monopoly. "Any Tanzanite that is cut from here and is exported from this operation is not laser marked." He says he is not afraid of competition since the quality of mining in the other blocks will soon see the exodus of Afgem's competitors. "We will soon see people abandoning these mines, as they are unsafe," he says. For instance, in April 1998, 71 miners died in Mererani after walls of a flooded mine buried them.

AREMA also claims that Afgem is flooding markets with tanzanite to drive prices down by as much as 60 percent. According to the miners, the price per gramme of uncut tanzanite at Mererani was US$600 in February this year. But now it has crashed to US$150 per gramme, they say. However, the chairman of Afgem Tanzania, Ami Mpugwe, Tanzania's former ambassador to South Africa has denied all the allegations.

As it conducts its operations on the ground, Afgem officials have been accused of acting brutally and violently towards small-scale miners. A group of six miners have taken Afgem to court over an incident that happened last September 9 as they were returning to Mererani after their shift in Block B.

Small-scale miner Raymond Marali says that six white Afgem security guards accosted him and his colleagues while they were waiting for a bus near Block C. The guards ordered the group to lie on the ground, tied the miners' hands with plastic cords, kicked them, set five dogs upon them, and locked them up in a container before taking them to the Mererani Police Station, according to Marali.

Kimble said that the six were actually caught on Afgem property. "The actual facts as they stand is that there were people conducting an illegal mining operation over here (Block C)." There have been approximately 60 cases of criminal trespass, theft and illegal mining on Afgem's property since February of last year, says Kimble. But nobody has ever been convicted.

This and other incidents have prompted people in Mererani to accuse Afgem of importing apartheid to a country that was in the forefront in opposing segregation. Kimble dismisses such claims: "I don't believe we have an apartheid system here. It is the Tanzanian government that invited us here. So if they have problem with our apartheid past, it is up to them." Of Afgem's 30 security guards, Kimble claims that only three are expatriates; locals put the number at ten.

Kimble says that Afgem is concerned about the local community. He says the company has spent US$35,000 building a road that provides access to places that before were inaccessible, and has helped to rehabilitate watering areas for the pastoralists and improve a local clinic and primary school. The firm employs 220 people, the majority of who are locals, says Kimble. Afgem intends to introduce a social fund to benefit Mererani's non-mining population, he says.

At an April 9 meeting with Mererani residents, Afgem offered the community a grant of US$25,000 for the village development fund. Incensed villagers turned it down, accusing Afgem of trying to "silence" them before a visit by the Minister Majogo.

Tensions have been brewing in and around Mererani, a town of 75,000 people, for months. They culminated recently in a series of bloody clashes that pitted the small-scale miners against company officials.

Last September, seven artisan miners were killed and scores injured after Afgem's security people fired on miners who had invaded Afgem's property. Another invasion this year in April left a teenager miner dead, while dozens were injured in May after 400 miners invaded Block C, demanding the firm's expulsion.

Against this backdrop of violence, the Minister of Energy and Mines, Edgar Majogo, has declared Mererani a controlled area, and police patrol the roadblock linking Mererani to the main road at the Kilimanjaro International Airport. The government has also formed two committees - one by Regional Commissioner, Daniel Ole Njoolay and the other by Majogo - to probe the clashes. None of the reports have been made public.

Kimble and government officials have said that small-scale miners instigated the clashes and other violence to protect the underworld of gemstone smuggling. Tanzanite smuggling is, indeed, a problem in the area, with some artisans admitting that they sell their goods to informal dealers to avoid paying duty.

Most of the uncut tanzanite from the smaller miners is sold to master dealers in Arusha, Mererani, Moshi and Nairobi. It is these who export the gem. Last year, Kenya, a country that doesn't have a single tanzanite mine, exported more tanzanite than Tanzania.

Analysts agree that, although it is through foreign investors such as Afgem who could assist in curbing smuggling and uneconomical mining, they are not the panacea. In the past, such investors have ended up leaving their operating areas worse than they found them.

That is the fear stalking Mererani. "Even if we are poor, that does not give the government the license to do as it pleases," observes Edward Barongo, a former Regional Commissioner for Arusha. Many in Mererani agree with him.

| CONTENTS | AFRICANEWS HOMEPAGE |

AFRICANEWS - Koinonia Media Centre, P.O. Box 21255, Nairobi, Kenya
tel: +254.2.576175 (voice) Fax:- +254.2.577892 (fax-modem)
AFRICANEWS on line is by Koinonia Media Centre