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Home Headlines

Acacia’s gold strike could push Kenya ahead of Tanzania

by admin
June 12, 2020
in Headlines, Economy
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The new discovery of high grade gold by UK mining firm, Acacia Mining, could have placed Kenya on the path to join the league of big gold exporting countries like South Africa, Ghana, Mali and Tanzania.

As things stand now, South Africa which produced 140 metric tons in 2015 is the leading gold exporter followed by Ghana, Mali and Tanzania in that order.

Kenya is still a very small player in gold production with Goldplat, the only licensed commercial gold mining firm still struggling to hit 200 kg a year in production at its Kilimapesa mine.

But the Acacia discovery could be the game changer in Kenya’s gold export fortunes.

Kenya could also benefit from yesterday’s decision by Tanzania President John Pombe Magufuli to ban mining companies from exporting gold and copper concentrates.

Magufuli’s decision sent shockwaves to investors in mining firms with Acacia losing 20 percent of its value at the London Stock Exchange (LSE).

Acacia is the biggest gold mining firm in Tanzania with three mines in the North Western region of the country. Tanzania mining activities account for 30 percent of the firm’s revenue.

By placing the ban on the concentrate exports, Magufuli may have unwittingly nudged mining firms with operations in the two countries to fast track their gold mining activities in Kenya to plug revenue shortfalls that may arise from the ban.

Responding to the ban, Acacia said it had halted all concentrate exports from Tanzania awaiting consultations with Dodoma.

Kenya doesn’t not have a large scale gold refinery plant, a factor that could push gold mining firms from Tanzania to Kenya.

Going by the Acacia’s finding and government’s own estimates, Kenya could overtake Tanzania as the biggest gold exporter in East Africa in the near future when Acacia and other firms which have exploration licenses start full production.

By end of 2016, there were four UK mining firms engaged in licensed exploration activities in the same gold belt that Acacia struck a resources with an estimated value of Sh165 billion.

Acacia Mining jointly with Lonmin and AfriOre International hold the license to explore Ndori Greenstone Belt in Western Kenya in area of 2208 square kilometers.

Red Rock Resources, which operates in Kenya through Mid Migori Mining Company, has 75 percent interest in the Migori gold belt in Migori County which has 1.2 million ounces.

Lonmin PLC, on whose orders South Africa police killed 34 of its mine workers and injured 78 others four years ago, also has a huge stake in Kenya’s mining. The company owns stakes in all the gold mining blocks in Western Kenya (Migori, Homa Bay and Kakamega.) it also has the license for copper, silver and zinc.

Tanzania exports about 1.27 million troy ounces annually (40 tons), according to a 2014 annual report by Tanzania’s Minerals Audit Authority (TMAA).

The report notes that Tanzania’s total mineral exports in 2014 from gold bars produced by the seven major gold mines; (Biharamulo, Bulyanhulu, Buzwagi, Geita, Golden Pride, New Luika and North Mara) were 1.27 million troy ounces of gold.

In 2014, Kenya’s mining department estimated that the country had the potential to export 12 metric tonnes a year. Yet that was before the Acacia’s gold find estimated at 1.31 million ordinary ounces, and the increased gold exploration activities by giant UK mining firms.

Unlike Goldplat which has experienced challenges funding its Kenyan operations, Acacia Mining, formerly known as Africa Barrick, is a magnet to financiers.

Announcing the results of the four years exploration activities in Kakamega, Acacia Mining chief executive, Brad Gordon was upbeat about the prospects in Kenya announcing the firm would be investing an additional Sh1.2 billion in the fields this year.

Tags: Acacia MiningexportsgoldKenyaLondon Stock ExchangeMagufuliTanzania
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Comments 1

  1. JO says:
    4 years ago

    Good luck Kenya. However, what Tanzania has done is correct. There is no point quoting tonnes of exported gold with no meaningful benefit to the country from which gold is extracted. Being 1s or second in Africa in gold export volumes is as useless as goat pee if you do not retain at least 30percent of the money. Many foreign companies in Africa realize profits just in the second year of their operations because they ‘steal’. Wake up Africa. At this rate of robbery we are not going to develop if we do not open our eyes. Good riddance Acasia, go elsewhere where you can carry out your trade of death, environment degradation and robbery.

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