Mining

KAHAMA: Bustling mining city to watch across Great Lakes Region

It is billed to overshadow its regional headquarters by and by

TUESDAY May 16, 2023

Map of Kahama District in Shinyanga Region, Tanzania. Mining activities are partly fast tracking socio-economic growth of the district which is billed to overshadow its regional headquarters in Shinyanga. PHOTO | WIKIPEDIA

By Deus Bugaywa

The Tranquility News Correspondent, Tanzania

Just as it was the case with the City of Gold, Johannesburg, gold mining is thrusting socio-economic growth of Kahama Municipality, Tanzania, into a phase of self-sustaining development, creating an integrated labour market and paving way for a mining city.

With the population of 453,654 people as per the country’s 2022 Peoples and Housing Census, 20 wards, 104,686 households and an average household size (persons per household) of 4.3, Kahama was elevated to a municipality status on January 28, 2021.

Kahama owes her unprecedented growth to mining, agriculture and Isaka Dry Port, which functions as a sub port of Dar es Salaam also in Tanzania. The dry port was created in 1980 to serve land locked countries of Rwanda and Burundi.

Located on the high way and only 610 kilometres from Rwanda’s Capital, Kigali, the port’s activities have greatly contributed to the growth of Kahama Municipality.

Trade and manufacturing activities are on the increase facilitated by water supply connected from Lake Victoria, as inadequate supply of the precious liquid was one of the major challenges Kahama residents faced.

A bird’s eye view of headquarters of Shinyanga Region in which Kahama is one of its districts. POHOTO | YOU TUBE

The municipality has now been connected to almost all its wards, enabling its urbanised area to grow even faster.

The real boom of the municipality, however, is attributed to being sandwiched by two large-scale mines, namely Bulyanhulu and Buzwagi gold mines.

Situated barely six kilometres away from the central business district, Buzwagi Gold Mine was the municipality’s economic force to reckon with during 15 years of its operations.

Despite its operations ending in July 2021 before the mine was officially closed a year later, the shutting down process dawns a new era to Kahama residents.

In 2022, the focus of Buzwagi Gold Mine’s mother company — Barrick Gold — was on physical and environmental closure coupled with plans to transform the mine into a special economic zone.

“In 2021, a feasibility study showed the creation of a special economic zone could create more than 3,000 jobs annually, generate over $150,000 each year from service levies for the local municipality and deliver in excess of $4.5 million in employment taxes each year,” says Mark Bristow, Barrick Chairman and CEO.

An aerial view of Kahama which assumed its municipal council status barely over two years ago as opposed to its regional headquarters in Shinyanga which graduated from town to municipal council in July 2000. PHOTO | EDEN TOURS SAFARIS

In 2022, Barrick joined forces with the municipality to establish teams to drive the planning, preparation, and development of the special economic zone.

An implementation team was created to tackle financial, logistics and operational hurdles of the transformation process. Also created was a technical team to drive interest from local, regional and global businesses, and a steering committee to take overall responsibilities for the project.

“We invited representatives from a range of companies and potential investors to visit the site and explore options, and have received commitment from two large firms and interest from many more.

“We have also worked alongside the municipality to build a new airport terminal in a bid to boost the number of flights to and from other hubs in the region to increase ease of access,” says Bristow.

The process of transforming the defunct Buzwagi Gold Mine into a special economic zone will ensure sustainable development of the mining sector in the country, where a hosting nation will continue benefitting sustainably even after the closure of the mine.

Buzwagi Gold Mine before it was closed and rehabilitated. The Tanzania’s biggest gold mining company, Acacia Mining Plc, signed $41 million worth of environmental rehabilitation bonds with the government to fulfills its obligation of cleaning up environment after the closure of its mines in the country. Acia, formerly known as African Barrick Gold, has three gold-producing mines, namely Bulyanhulu, North Mara and Buzwagi, situated in north western Tanzania. The value of the clean-up bond for Buzwagi alone stands at $18,623,489. PHOTO | BUKOMBE SASA

Economic Analyst Conrad Mashimba says special economic zones (SEZs) stimulate industrialisation and structural transformation and that they play key role in developing manufacturing and creating employment in Kahama Municipality and its environs.

“This will increase the growth pace of the municipality towards a city status,” Mashimba stresses.

The Buzwagi sister mine, Bulyanhulu, has been and is still playing an intimate role in evolving manufacturing, big trade and financial services, and in boosting agriculture and food supply chains in Kahama District.

“The vivacious Kahama you are seeing today could not have been there without the existence of the two sister mines.

“I shifted my business from Shinyanga to Kahama during the Buzwagi era owing to the business boom. Though I was a bit worried when the mine was closed, I realised later that Kahama is self-sustaining, it is surely emerging sustainably,” Samwel Ng’wilabuzu, who runs a wholesale business in the municipality, says.

Given the population and households of Shinyanga Municipality, which doubles as a regional headquarters of Kahama District, standing at 214,744 people and 51,714 with an average household size of 4.2, respectively, as per the same census, Ng’wilabuzu’s decision to relocate to Kahama makes a lot of business sense.

Barrick Gold president and Chief Executive Officer Mark Bristow in January 2023 became the first investor in Tanzania to be installed Sukuma Chief of Bulyanhulu due to contributions Bulyanhulu Gold Mine makes to the community. PHOTO | DAILY NEWS

Bulyanhulu Gold Mine is along with surrounding small-scale mines playing a significant role in stimulating businesses in Kahama Municipality by attracting a number of people directly and indirectly employed or whose businesses are, in one way or another, linked to mining activities.

“Mining activities have influenced most of the community members to engage in big, medium and small-scale businesses.

“Thanks to the population increase in Kahama Municipality for creating a great demand for diverse domestic goods and services and attracting most industrious persons to sell them,” Hamis Shabani, casual labourer and beneficiary of Bulyanhulu Gold Mine entrepreneurship incubation programme, says.

Shabani is now the boss of himself, for as we speak, he is the Managing Director of Mjasilia Group of Companies Ltd, a firm supplying goods and services to the mine.

A study on The Effect of the Mining Sector in Poverty Reduction: A case of Bulyanhulu Gold Mine Limited, by Hilda Mallomo, found out that majority of employees of the mine come from Kahama District.

The study also established that may residents surrounding the mine are involved in selling different food staffs the mine employees consume.

One of the Kahama Municipality roads. Acacia Mining Plc, formerly known as African Barrick Gold, spent over $1.4 million on the construction of the municipality roads at tarmac level with the Tanzania Prime Minister’s Office contributing $304,340. PHOTO | MOHAB UPDATES

Another milestone attributed to the growth of Kahama is the Bugarama and Ilogi housing scheme, the first realistic, large-scale and non-profit project the Bulyanhulu Gold Mine hatched and carried out for its employees to obtain permanent housing.

“As long as the mine continues existing, the two villages turned townships will grow into fully self-sustaining urban with several additional micro-economic activities before the mine is closed,” another resident and beneficiary of the scheme Nkwabi Lazaro believes.

The scheme intends to provide employees of the mine with decent, reasonable, realistic and affordable accommodation with much privacy and freedom, given their different cultures.

As for now, the scheme has gone beyond those objectives. “The villages have graduated into townships whose socio-economic compatibility with Kahama Municipality triggers growth exponentially with time,” Nkwabi adds.

The scheme dates back to 2000 with a view of constructing 1,500 houses for local employees at the Bugarama and Ilogi sites situated eight and 14-kilometer away from the mine, respectively.

Bulyanhulu Gold Mine Manager Cheick Sangare (Left) and Secretary General of Tanzania Mines and Construction Workers’ Union Paternus Rwechungura (Centre) sign an agreement on better condition at workplace at the mine’s headquarters as former Kahama District Commissioner Festo Kiswaga (Right) looks on. PHOTO | MTAA KWA MTAA

Basic infrastructure ranging from roads and storm drains to water reservoirs and a water pumping station and network are strengthening the villages turned townships.

Bristow attributes the mine’s contributions to the Barrick’s sustainability policy that says: Creating long-term value and sharing economic benefits drives our approach to sustainability.

“We strive to be a good corporate citizen and a genuine partner for our host communities in locally-led growth, and to build resilience to global challenges.

“First and foremost, it is the right thing to do. Beyond that, it also helps to ensure we secure social license for our mines to operate smoothly,” he explainsΩ

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