Tanzania Spectacularly Destroys Its Diamond Mining Business.
Above Photo: The Nyangwale diamond mine, Kahama, Tanzania.
One of the final nails in the heavily nailed-coffin that entombed our Tanzanian diamond investment business came when the Tanzanian government jacked up annual licence payments late last year.
It meant we had to hand back diamond licences to the government because we couldn’t afford the annual fees, for non-producing and often ultimately worthless exploration licences.
We had two licences for land called “Diamond Africa”, which lay next to the boundary fence of the famous, massive Mwadui diamond mine formerly owned by De Beers, but we’ve had to hand them back too, resulting in enormous losses for investors.
Worse, our local partner forgot to pay the fee in time, meaning we also had to pay a 50% penalty on the new, jacked-up rate. Nobody had the money or the stomach for it any more, and we instead walked away from the Tanzanian diamond mining business.
Others had it much worse, and people are handing back licences instead of renewing them, as this misguided government policy slowly strangles the mining sector in Tanzania, and investors and operators big and small finally decide to accept their losses, and look elsewhere for more viable investments.
The fact is, mining diamonds is neither cheap, easy or straightforward, as we found to our own great cost. It isn’t helped at all by ridiculous anti-commercial government policies.
I am still reviewing fifteen thousand emails and notes pertaining to our own mining disaster in Tanzania, so I can write what will be a highly entertaining account of what happened to us out there. It wasn’t just government policies that did for us, but human qualities such as stupidity, incompetence, petulance, negligence and just about every possible “don’t do it” reason you can think of, and many you can’t.
Anyone thinking I am generally criticising Tanzania should note – it’s a fantastic country, with great people and it’s a wonderful tourist destination.
I only wish I’d kept it at that!
There is an excellent article for anyone interested in further reading about the raised mining licence fees in Tanzania here: http://www.ippmedia.com/frontend/index.php?l=45430
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