Tanzanian to improve mining infrastructure to increase gold, metal production
Posted by
Mark Bese on Wed, Dec 14, 2011 @ 01:00 PM
As Tanzanian gold miners begin to increase production and connect to the nation's power grid, their power consumption is expected to jump significantly, noting the country's need for better infrastructure conducive to lucrative mining sites.
According to The Telegraph, gold mining companies may soon triple their power consumption, said Ami Mpungwe, Tanzania's Chamber of Minerals and Energy president. Power usage in the mining sector is expected to grow from its current 50 megawatts to 146 megawatts in the coming years.
"There is a need to improve infrastructure to sustain growth in this [mining] sector," he said by telephone from Tanzania. "Currently, most mine houses are generating their own power at a substantial cost, which erodes competitiveness."
Mpungwe added that the country is struggling to benefit from high global gold prices due to the high cost of mining - which could be remedied by making infrastructure improvements. Tanzania Electricity Supply Corp. is currently in the process of expanding its power transmission system to mines located in remote areas near Lake Victoria, which would significantly increase the mine's efficiency, the media outlet stated.
According to The Guardian, Tanzania's mining outlook is dependent on more than its electric infrastructure, leading the government to plan for widespread improvements in mining infrastructure.
Emmanuel Jengo, Tanzania Chamber of Minerals and Energy executive-secretary, announced the challenge at the recent Corporate Social Responsibility (CSR) forum, urging the government to develop the needed articles of infrastructure that would benefit the country's mining sector, including better roads, railways and ports.
"When these projects are completed, we will have linked mining to other sectors of the economy and the country will benefit massively," he stated.
According to the news source, about $2.5 billion have been invested in exploration and mining endeavors throughout the country in the last 10 years, money that has also attracted many mining services and other support industries to the area.
By 2010, mineral exports solely from Chamber members had grown from $16 million in 1997 to $1.57 billion.
"There is significant potential for further development of new mines and providing sustained growth due to ongoing mineral exploration activities for various minerals within Tanzania," Jengo added.
Tanzania took in a total of $120.5 million in revenue from taxes on mining companies in 2010, compared to $2.1 million in 1997. The mining sector's contribution to the the country's GDP has increased from 0.9 percent in 1990 to 2.6 percent in 2008, and employs roughly 15,000 workers.
The Chamber was formed 17 years ago and now has almost 60 members. It includes a wide range of industry leaders from major and minor multinational mining companies, geological services, and other industry-related firms.
The forum attracted mining industry leaders from Canada, Kenya, Uganda, Rwanda, Burundi and Zambia.
Tanzania is expecting several new investments to come from Canada, as it has held a long relationship with the mining company-rich nation for many years, the news provider stated. According to Canadian High Commissioner to Tanzania Robert Orr, CSR discussed at the meeting is becoming a business necessity in the mining sector.
"The advancement of its application, both in terms of the number of companies implementing CSR and the complexity of the programs, is evident today in the region as it is around the world," he said.
The Guardian states the two companies are currently in the final stages of negotiating a Foreign Investment Protection Agreement, which is expected to be signed in 2012.