Geita Gold Mine (GGM), is owned by AngloGold Ashanti Limited, a global gold producer with 21 operations on four continents.
It is listed on the New York, Johannesburg, Accra, London and Australian stock exchanges, as well as the Paris and Brussels bourses. GGM General Manager, Mr Michael Van Anen ANEN recently granted an interview to Staff Writer JOHN KULEKANA on the firm’s performance, achievements, challenges and prospects. Excerpts …
QUESTION: Geita Gold Mine (GGM) has a long history, which includes changes of ownership. Can you briefly give us the profile of the firm?
ANSWER: Gold was formally discovered in the Geita Region around 1896 and mining began in the 1930s. Geita gold deposits are located 20 km south east of Nungwe Bay on Lake Victoria, at an altitude of about 1,200 metres above sea level. The area forms part of the Central African Plateau, which is characterised by an undulating topography consisting of gently sloping plains, scattered hills and low-lying wetlands.
The special mining lease (196.27 km2) that defines GGM falls within the Geita Forest Reserve. The GGM commenced production in 2000, initially as a joint venture between two gold mining companies – AngloGold Limited from South Africa and Ashanti from Ghana.
With the merger of the two companies in 2004, Geita Gold Mine (GGM) became wholly owned by AngloGold Ashanti. GGM is located in the northwest of Tanzania and is an open cast mine with three pits.
AngloGold Ashanti has invested US$600 million in GGM since 2000 and the mine has paid $683 million in direct contributions to the Tanzania government through taxes and royalties since 2000. In the second quarter of 2013, Geita’s production was 113,000 ounces (oz), up from 66,000oz in the previous quarter.
Q: GGM a good employer and tax payer?
A: GGM contributes significantly to Tanzania through royalty, income tax and other payments to the government. GGM also believes in making local procurements from local businesses and making a substantial contribution to the community investments.
For example, AngloGold Ashanti has invested about $600m in Geita Region since 2000, while the mine has paid some US$683 million in direct contributions to the Tanzania government through taxes and royalties in the period. For 2012 alone, GGM paid US$ 213.8 million in royalties, income tax and other contributions.
This represents the second highest tax contribution across our global portfolio and second only to South Africa where we have a much larger operating base. In addition to our tax remittances in Tanzania last year, AngloGold Ashanti provided a direct income and benefits to about 3,600 employees both directly and indirectly.
96 per cent of our employees are Tanzanians. On procurement, in 2012 alone, GGM procured over US$ 276 million of goods and materials from businesses locally. We are also actively seeking ways to increase local procurement even further.
Q: Safety is among major challenges in the mining industry. How well is GGM performing on this aspect, taking into account mercury and cyanide – which are highly toxic substances and are used in processing gold?
A: GGM does not use mercury to process gold. GGM has prioritised securing a ‘harm free’ workplace with a focus of reducing risks and exposure of employees to harmful substances and conditions. The key focus to achieve our goal of Zero harm is applying changes to our Safety culture by adapting a ‘Zero Tolerance’ behaviour toward safety.
No one is expected to make an unsafe act or condition in any area of our work place on site. GGM continuous to improve visible leadership and engaging the whole work force to the right safety behaviours, further detailed investigation and review to all incidents are employed in all cases that has involved unsafe incidents.
Q: The government has repeatedly called upon big miners like GGM and ABG to support small scale miners. There are thousands of artisanal miners working in risky environment, using crude and inefficient tools and lack skills and adequate financial capital. What are you doing on this aspect?
A: As a partner in the Multi Stakeholder Partnership (MSP) on ASM, AngloGold Ashanti (GGM) will support the Tanzania government in finding solutions for managing ASM issues. These solutions will be practical and sustainable and as a first step, GGM will pilot the MSP around its concession.
This pilot will be aligned to GGM’s positive and active approach in engaging other stakeholders on ASM issues. The partnership with the World Bank will also help facilitate the stakeholder engagement process and leveraging synergies and resources with existing ASM programmes that involve the World Bank.
AngloGold Ashanti’s strategy for addressing ASM – both illegal and legal – is founded on a strategic constructive engagement process with the Tanzania government, local communities and other partners with an emphasis on the protection of livelihoods. Through these partnerships, AngloGold Ashanti is developing strategic solutions to the problems associated with ASM and contribute to positive social and economic development in the area.
Specifically, we are working in partnership with the Tanzania government, the World Bank, other large scale miners and other relevant stakeholders to co-create solutions to enhance formalisation of the ASM sector and to support alternative livelihoods where appropriate.
The Multi Stakeholders Partnership seeks to develop creative approaches to engage stakeholders, coordinate activities and leverage resources and expertise to achieve shared objectives.
It aims to enhance government’s capacity to develop integrated ASM solutions by combining the policy actions of the government, the convening power of the World Bank and the technical know-how, managerial expertise, financial resources and technology of the industry (both large and small-scale) to achieve mutually beneficial and lasting results.
Q: In some places there are regular reports of fatal conflicts between miners and residents in surrounding villages, as well as complaints of theft, vandalism and encroachment on miners sites. What is the situation at GGM?
A: Artisanal and small-scale mining (ASM) and illegal activity on our concession remain a significant challenge at GGM and other mining companies in Tanzania. The security environment within the GGM ‘special mining licence’ area continues to be a challenge with a significant increase in the number of trespassers entering the site each month, often for the purposes of illegal mining or committing theft.
The security unit continues to work closely with the Geita Police Force and Field Force Unit since the signing of a Memorandum of Understanding (MoU) in 2012. Equally important, AngloGold Ashanti is a signatory to the Voluntary Principles on Security and Human Rights (VPSHRs).
This means that all incidents at GGM involving security personnel are investigated and the outcomes of investigations are reported to VPSHR structures and published publicly. In that way we ensure all security activities are handled in an ethical and responsible way.
Q: Good corporate governance includes providing support to community by giving part of the profit generated to neighbours as aid, charity and support to various humanitarian programmes. Can you present a detailed account of GGM’s Corporate Social Responsibility milieu?
A: AngloGold Ashanti is committed to fulfilling its obligations and duties as a responsible corporate citizen across the entirety of its operations and its belief in the importance of the concept of sustainability clearly extends through to its activities at GGM. It was as recently as August 2013 that GGM was named the winner of eight awards from the Tanzanian Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE) for its commitment to community investments.
These awards were bestowed on the company as recognition of its health, education, procurement and water programmes for its host communities in Tanzania. These include the Geita Town Water Project Implementation, which has seen the company invest $4.9 million towards the implementation of a water supply system in partnership with the Tanzania government.
The establishing of a clean water supply will ultimately benefit some 130,000 residents located around Geita. Another $5million investment from GGM has gone into the construction of the Nyankumbu Girls Secondary School, the final stage of which began in July 2013.
This stage includes the construction of the remaining batch of teachers’ housing, school fence, sports fields and purchase of laboratory equipment. The overall project is expected to be completed by March 2014, after which more than 900 girls will have access to a sciencefocused boarding school, the only one of its kind in Geita Region.
Meanwhile, a joint venture with the Geita District Council and other parties, has successfully implemented an integrated malaria control programme in Geita. The Geita Malaria Prevention programme, which covers approximately 19 villages annually, focuses on carrying out indoor residual spraying within the community and was responsible for offering this prevention to more than 90 per cent of the target population.
Furthermore, from an environmental perspective, GGM is understandably proud to have maintained ISO 14001 certification, which will remain valid until June 2016. Crucial to our success, going forward will, of course, be the support of our host communities.
GGM is currently rolling out an enhanced engagement strategy, involving the surrounding communities and creating awareness of our mining processes and activities. We believe this will enhance public knowledge and understanding of the industry and strengthen the stakeholder relationships which currently exist.
By JOHN KULEKANA, Tanzania Daily News