Tuesday, January 5, 2010

Gold


African gold first came to mainstream European attention when Arab chronicles of journeys through the Sahel became known. Among others, Al-Umari described the vast amounts of gold transported by Mansa Musa (pictured), king of Mali, on his pilgrimage to Mecca in the fourteenth century.

Since then, lust for the metal (and other minerals) has been the driving force for plunderers of African natural resources. It lay behind Cecil Rhodes's klepto-corporations in Southern Africa where, to this day, de Beers still controls a substantial portion of the world's diamond market. It has despoiled the Congo in ways that King Leopold could only have dreamt of when he shamefully referred to the division of the “magnificent African cake” in the 19th century. Today's plunderers come, by and large, in business suits and negotiate mining concessions from host Governments - though where the rule of law breaks down - as in Sierra Leone in the 1990s - the ugly side is still very visible.

In East Africa, Tanzania is best endowed with valuable mineral resources, but to what extent do these resources translate into economic benefit? Not much, at least according to a report commissioned by Tanzanian religious organisations entitled "A golden opportunity: How Tanzania is failing to benefit from gold mining" which can be found at http://www.africafiles.org/article.asp?ID=19218. I quote:
"Gold mining is the fastest growing sector of Tanzania’s economy. Minerals now account for nearly half the country’s exports and Tanzania is Africa’s third largest gold producer. Yet ordinary Tanzanians are not benefiting from this boom both because the government has implemented tax laws that are overly favourable to multinational mining companies and because of the practices of these companies. Tanzania is being plundered of its natural resources and wealth. Between 1997 and 2005, Tanzania exported gold worth more than US$2.54 billion (bn). The government has received around $28m a year in royalties and taxes on these exports, amounting to just 10 per cent over the nine year period. The 3 per cent royalty has brought the government only an average of US$17.4m a year in recent years.......

.....We calculate that Tanzania has lost at least $265.5m in recent years as a result of an excessively low royalty rate, [and] government tax concessions that allow companies’to avoid paying corporation tax...... This is a very conservative estimate, in that it does not cover all the gold mining companies or all figures for recent years (which are not publicly available). Neither does it cover the financial costs of other tax incentives such as VAT exemption, which are extremely difficult to estimate. These extra revenues could of course provide a huge boost to tackling poverty in Tanzania. We also estimate that the prioritisation of large-scale gold mining in the country has come at the expense of small-scale artisan miners, around 400,000 of whom have been put out of work.

This report identifies three severe problems with gold mining in Tanzania, namely:
• It provides the government with very low tax revenues
• It is subject to minimal governmental and popular democratic scrutiny and is associated with the problem of corruption
• People in the gold mining areas are barely benefiting and many are being made poorer. "
Plus ca change. It seems extraordinary that there is no internationally recognised best practice for both Governments and Mining Companies to follow.
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As all photographers know, gold has also given its name to the Golden Hour - the hour before sunset - when daylight is softer and warmer in colour, and shadows lengthen. This phenomenon is particularly pronounced close to the equator, when the sun's rays travel through more of the atmosphere and blue light is diffused. Across East and Southern Africa, with its low humidity and high percentage of dust in the air, this effect is further enhanced, and results in spectacular sunsets of gold and red and violet and the horizons disappear in purple haze. The brevity of sunset makes it all the more beautiful.

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