Buckreef Gold Project: A Transformative Journey of Investment Success in Tanzania’s Mining Sector

Source: The Business Wiz

The story of Buckreef Gold project dates back over 12 years characterized by phases of challenges, resilience and, recently, success. It is a prime example of the positive impact of improving investment climate, hence attracting investment in critical sectors like mining which results in wide social and economic benefits for the country.

In its earlier years, Buckreef Gold mine faced periods of stagnation, with low activity levels and minimal production. However, the landscape shifted enabling the project, for the first time in the years 2022 and 2023, to make a profit.

This shift in the mine’s productivity is a result of a commitment by the shareholders to enhance investment in another brilliant display of public-private partnership. Buckreef Gold Company is a joint venture between TRX Gold Corporation through its subsidiary, TRX Gold Tanzania and the State Mining Corporation (STAMICO) which holds a 45% stake and the investor, TRX Gold holding a 55% stake. TRX Gold Corporation is a Canadian based gold mining investor listed on the Toronto and New York stock exchange.

This investment enabled the mine to start operating commercially and generate profit. The injected capital was directed towards acquiring mining equipment and technologies. This enabled the mine to increase production from 360 tonnes/day in 2021/22 to 1000 tonnes/day in 2022/23 and construction is ongoing to further increase capacity to 2,000 tonnes/day by mid-2024.

The turnaround in production capacity and operational efficiency underscores the critical role of investment in the mining sector. Within a short timeframe of less than 3 years, the project transitioned from a small operation to actively producing and selling gold with a total value of 190/- bn in 3 years which also brings in much needed foreign currency. With the known deposit the mine has the potential to grow its production capacity and there is opportunity to conduct further explorations for new mineral deposits. To realize this potential the mine will require additional capital investment.

The Senior Vice President and Managing Director for TRX Gold Tanzania, Mr Khalaf Rashid said that TRX Gold is committed to continue working in collaboration with the government to ensure the prosperity of the project.

“TRX Gold is dedicated to expanding the Buckreef gold project. To achieve this, we have begun talks with our partners, STAMICO and the Government to review and enhance our current agreements, to enable increased financial and technical investment in the project. We are already making a significant impact and we look forward to building a bigger mine which will result in an even bigger impact” he noted.

Buckreef stands as a shining testament to the transformative power of gold mining done right. It serves as a reminder that the pursuit of wealth can coexist harmoniously with environmental preservation, community development, and governmental progress.

According to a report presented to the Parliamentary Accounts Committee, a total investment of 67 million US dollars has been invested by TRX Gold Corporation since 2011. TRX’s new Executive Management, since taking over reins in 2021 together with STAMICO has been instrumental in catalyzing this transformative journey. With an eye towards the future, the project with a lifespan of over 15 years has recently signed a 5bn/- agreement with STAMICO for exploration and drilling services, anchoring its vision on a series of strategic goals.

Foremost among these objectives is optimization, aimed at maximizing the mine’s productivity and efficiency. Additionally, ongoing research and exploration efforts seek to uncover untapped deposits, laying the groundwork for sustained growth and resource expansion.

Furthermore, securing new prospect land, facilitated through mutually beneficial arrangements with the government, holds immense promise for future discoveries and production endeavors.

Through strategic investments, operational optimization, and a steadfast commitment to innovation, the partnership charts a course towards sustainable growth and prosperity, ensuring a legacy that extends far beyond the confines of the mine itself.

The reforms have not only enabled the mine to make a profit but has made a direct contribution to government revenue and community benefits.  Since 2021 the project has paid royalties and fees to the government worth 14bn/- and has contributed 1.1/- bn in 2022 and 2023 and a further 478m/- for Corporate Social Responsibility (CSR) for the year 2024.

According to a report presented during a visit by the Parliamentary Standing Committee on Public Accounts (PAC) to Buckreef Gold Mining located at Geita, the mine has empowered local entrepreneurs and fostered job creation. “Small businesses thrived, and new employment opportunities emerged, bringing economic stability and hope to the people,” the report stated.

The CSR projects to be implemented in collaboration with the District Office include education and health, capacity building and empowering women in Geita through business training.

Additional areas of focus include infrastructure projects, such as maintaining roads in remote villages aimed at fostering economic growth. Furthermore, projects entail developing clean water supply systems, providing safe and clean drinking water to communities that had long suffered from water challenges.

Furthermore, recognizing the importance of environmental sustainability, Buckreef Gold Mining takes great care in implementing responsible mining practices. The project, leveraging the recent capital injection, has invested in cutting-edge technologies to minimize its ecological footprint and rehabilitate any land affected by mining activities.

The Buckreef project adheres to policies that encourage local procurement and hiring, fostering a symbiotic relationship with the community. Infrastructure development, including road maintenance, is part of a holistic approach to ensure community integration and support.

Addressing the critical issue of employee health, especially regarding dust and chemical exposure, the project upholds stringent safety standards and conducts regular health and safety training. A dedicated medical facility, along with partnerships with nearby hospitals in Katoro, Geita, and Mwanza, ensures comprehensive health coverage.

The Buckreef project exemplifies a balanced blend of strategic investment, sustainable development, community engagement, and unwavering commitment to employee health and safety.

THE AUTHOR: The Editor, The Business Wiz

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