africa Economy FDI gold Mining Natural Resources Tanzania

Acacia moves part of operations into Tanzania

Approximate reading time: 3 minutes

This is part of the company’s long term localisation strategy

 

The Acacia group has moved some of its operations, into Tanzania in a bold move seeking to have its Tanzanian assets being led and operated by Tanzanian employees from within Tanzania.

In a statement, Tanzania’s largest gold miner said that operations such as Supply Chain, Sales and Payroll would be moved into Tanzania.

“These functions will be based mainly in Dar es Salaam or, where it makes business sense, at each operating mine in the Lake Zone.” Reads the statement in part adding that these changes are part of our long term strategy where we aim to have our Tanzanian assets being led and operated by Tanzanian employees from within Tanzania.

Under this strategy Asa Mwaipopo was appointed as Managing Director – Tanzania in February this year to oversee our operations in Tanzania while, at site level, of 16 managers across all three mines, 12 are Tanzanian nationals.  Over the last five years we have reduced our international workforce in Tanzania by 85% and the current transition will result in a more than 50% reduction in the number of employees remaining outside of Tanzania.

Under the next phase of the transition plan the remaining areas of Supply Chain and Sales functions, as well as the vast majority of Payroll functions, will re-locate to Tanzania by the middle of 2019.  Once complete, the transfer will mean that core business support to the North Mara, Bulyanhulu and Buzwagi mines will be situated within Tanzania.  Following the transition, staff and functions located outside Tanzania will mainly be servicing the Acacia Group corporate function, and its exploration requirements elsewhere in Africa.

The Acacia Group continues to progress a number of strategies within its Supply Chain function with a view to further increasing over the next six months its annual spend with Tanzanian-owned businesses. Acacia has always maintained a policy of sourcing local first, where economically viable, and the plans form part of its businesses’ continued efforts to grow their annual spend with Tanzanian suppliers.   Based on our current plans, we expect that by Q1 2019 we will achieve a further 10% increase in our total annual spend with suppliers that are Tanzanian-owned.

This will take the Group’s annual spend with Tanzanian-owned businesses on goods and services – including construction materials, fuel and lubricants, as well as internet and security services – to US$170 million.  Furthermore, if the Bulyanhulu mine were to restart in future, and is running at full capacity, we expect a significant further increase in our annual local spend.  From 2016 to date the Acacia Group has spent US$500 million with Tanzanian-owned suppliers.

This announcement further underscores our long term commitment and contribution to Tanzania.

Since the inception of our businesses, over 15 years ago, the Acacia Group and its predecessors have invested over US$4 billion into Tanzania, a further US$75 million into local communities and paid over US$1 billion in taxes and royalties.  During the first half of this year, Acacia Group companies in Tanzania have paid a total of US$67.1 million in Tanzanian taxes and royalties. This comprised US$19.1 million of provisional corporate income tax payments, a final 2017 corporate income tax payment of US$4.2 million, royalties of US$25.7 million, payroll taxes of US$13.0 million and other taxes of US$5.1 million.  Indeed, our North Mara mine currently contributes approximately US$250,000 in taxes and royalties to Tanzania per day.

“We are now seeing the fruits of Acacia’s long term localisation strategy which is at the forefront of our efforts to continue to contribute substantially to Tanzania’s economic growth and the country’s industrialisation goals. As a partner for Tanzania and its progress towards the Development Vision 2025, we successfully bring Tanzanian-owned businesses into our supply chain and, particularly at site level, provide support to grow a range of local companies to meet our operational needs.” Asa Mwaipopo, Managing Director – Tanzania, said.

Source: The Exchange

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.