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Tanzanian president fires mining minister and chief of state-run agency
May 24, 2017 / 10:42 AM / in 7 months

Tanzanian president fires mining minister and chief of state-run agency

DAR ES SALAAM (Reuters) - Tanzania President John Magufuli fired his mining minister and the chief of the state-run mineral audit agency on Wednesday after an investigation into possible undeclared exports by mining companies to evade tax.

Tanzania's President-elect John Pombe Magufuli salutes members of the ruling Chama Cha Mapinduzi Party (CCM) at the party's sub-head office on Lumumba road in Dar es Salaam, October 30, 2015. REUTERS/Sadi Said/File Photo - RTSTRMP

Magufuli’s decision, announced in a televised speech, signals an escalation of tensions between the government and the mining industry, which has denied engaging in tax evasion.

Mining accounts for about 4 percent of the East African nation’s gross domestic product.

Magufuli said the investigation report revealed that Acacia Mining declared the presence of gold, copper and silver in its mineral sand exports but did not declare other precious metals in the consignments.

“The committee (investigating the exports) found that there were many other minerals in those shipping containers that were not declared, such as sulfur, iron, iridium, titanium and zinc,” Magufuli said. “They were also under-invoicing the actual gold, copper and silver content in those shipping containers.”

The report said that Acacia declared about 1.1 tonnes of gold in the containers but an analysis established that the shipment contained up to 15 tonnes.

The company denied any wrongdoing and said it had not yet seen the report.

“Acacia reiterates that it fully declares everything of commercial value that we produce and pay all appropriate royalties and taxes on all of the payable minerals,” the company said in a statement.

SHARES PLUNGE

Acacia’s share price fell by more than 14 percent to 374 pence after the announcement -- its biggest fall since March 3. By 1111 GMT (7:11 a.m. ET) the shares had recovered some ground to 388 pence, down 10.6 percent.

Acacia, majority owned by Barrick Gold, has three Tanzania gold mines that also produce copper. It is also exploring in other parts of Africa.

Magufuli also said that the Minister for Mines and Minerals, Sospeter Muhongo, and the state-run Tanzania Minerals Audit Agency (TMAA) were guilty of failings in the monitoring of gold and copper concentrate exports.

“I like Professor Muhongo very much ... he is my friend, but I would like him to assess himself on this issue and vacate his position without delay,” Magufuli said after receiving the report on examinations of more than 250 impounded shipping containers of gold and copper concentrates.

Magufuli also sacked the agency’s chief executive, Dominic Rwekaza, and disbanded the board of the mineral audit agency, saying they failed to supervise exports properly.

Neither Muhongo nor representatives of the Tanzania Minerals Audit Agency were immediately available for comment.

Magufuli, nicknamed The Bulldozer for his propensity to push projects through, launched a major crackdown on corruption shortly after taking office in 2015.

The anti-graft drive has felled ministers, the head of the port, the tax chief and thousands of civil servants, though some companies claim they are being fined for crimes they did not commit.

Writing by Katharine Houreld; Editing by David Goodman

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