With Tanzania’s first gold refinery set for completion in about 6 weeks, the country will be earning more from its prized mineral resource through value addition. According to reports, over 80 percent of the refinery has been completed and the first trial is set for October 25.
The $15 million-dollar plant, which is located in the administrative capital Dodoma, will process raw gold produced in over 19 regions in Tanzania and neighbouring countries such as the Democratic Republic of Congo (DRC).
It is expected to have a production capacity of minimum 40 kilograms of refined gold per day, processed from almost one tonne of gold ore, said Prince Mgisha, the Chief Operating Officer of Eyes of Africa Ltd, a Serbian mining company that owns the refinery.
Game changer for Tanzania?
Being one of the top gold-producing countries in Africa, Tanzania has been exporting raw gold for many decades. However, the country can now export the refined product and get more earnings from the value addition with the soon-to-be-completed refinery.
“As Africa’s fourth-largest gold producer, this is a huge step for our country and economy,” Tanzania’s Minister for Minerals, Dotto Biteko, was quoted as saying by The East African, during a recent media tour of the refinery.
Tanzania, which saw its first international gold trading hub inaugurated in March, has about 28 mineral trading centres in operation around the country. Reports suggest that an average of 20kg of gold is traded per day at each mineral hub.
The benefits of the refinery extend to artisanal and small-scale miners in the country as well. According to Mgisha, they will be able to have their gold refined and use it as collateral to get loans from banks.
Moreover, when the price of gold goes up, the same gold used as collateral for loans could still be sold for a higher price. “Artisanal and small-scale miners in the country have suffered from a lack of loans, capital, and poor investment, but this is about to change,” the COO said.
The refinery will also create employment opportunities for locals after it becomes operational. Meanwhile, the Bank of Tanzania plans to tap into the business potential of the Dodoma gold refinery by running a gold reserve with locally-refined stock.
Earlier this year, President John Magufuli ordered the central bank to create a gold reserve to supplement national reserves. The president, who has locked horns with foreign mining companies since assuming office in 2015 with his sectorial reforms, also directed the apex bank to enforce control on mineral exports.
Meanwhile, the central bank revealed this month that Tanzania’s gold exports rose 23 percent in the year to July. Being Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali, Dar hopes to see a rebound in its mining sector after a tax crackdown and overhaul of its mining code in 2017 spooked foreign investors.
Tanzania’s mineral wealth includes gold, tin, nickel, iron, copper, zinc, lead, diamonds and uranium. Its gemstones are varied, including tanzanite, coal and industrial minerals such as soda, kaolin, gypsum, phosphate and dimension stones.