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Shanta Gold – A Gold Miner in a Gold-Laden Country

Shanta Gold – A Gold Miner in a Gold-Laden Country

In Tanzania, the country of the origin of man, gold and other precious metals abound. Although the country is still relatively unexplored, it already produces nearly as much gold as Ghana and South Africa, the two largest gold producing countries in Africa. Germans built the first gold mine near Lake Victoria in 1909. Nearly one hundred years later Canada, the United Kingdom, Australia, and South Africa all have well-developed gold mines in Tanzania, and commercial banks in Tanzania buy the country’s gold at world prices.

Central banks all over the world are grabbing gold like it’s going out of style and this year the price rebounded to a historic rate of $1400 per ounce. This is good news for companies like Shanta Gold, which had to struggle hard through its first formative years when prices were low.

Shanta Gold Ltd. was started in 2005 when a British investor took over a locally run gold mining company and renamed it. Primarily an exploration and development company, Shanta Gold has four main projects and 40 prospecting licenses in different parts of the country, covering a total area of nearly 1,400 square kilometres (540 miles). It has already become one of Tanzania’s most noteworthy mining companies and a boon to its local communities.

Already actively mining its Luika Gold Mine in the Lupa Goldfields District of south western Tanzania, Shanta Gold plans to start working the Singida mining project in central Tanzania in the near future. In addition, the company applied for three more mining licenses this year.

Shanta’s Luika project has been valued at over $150 million. To process its gold, the company purchased a new refining plant with a 90% heat recovery rate that increased the gold processed by two percentage points. In 2014 the company produced just over 84,000 ounces of gold at all-in sustain costs of less than US$1,000. This was all fuelled by a combination of heavy oil and diesel.

Dr. Toby Bradbury, Shanta Gold’s new CEO, stated in the company’s March 2015 production update that, “The focus remains on growing the business by capitalising on the upside potential of our exploration opportunities at New Luika as well as at Singida.” Hopefully there will be some focus left over for sustainability activities.

Mining companies, located mostly in remote areas, are perfect candidates for renewable energy projects. Although financial markets see the use of renewable energy as a sign that mining companies are more flexible and forward-looking, most mining companies still have not embraced renewables to relieve their problems with transporting electricity. Shanta Gold, a possible exception, is currently experimenting with a small solar project.

Shanta Gold is also helping to build Tanzanian infrastructure – mainly with water. The Luika mining area is surrounded by forest, with around 10,000 Tanzanians living within 15 square kilometres (nearly 6 miles) of the mine. The company plans to construct a big dam for the mine and is working with local NGOs to extend the dam into waterways that feed local communities. It has also built boreholes in neighbouring villages to provide water.

While establishing itself as a leading gold mining company in Tanzania, Shanta Gold set up a strong CSR program, as soon as higher prices started bringing relief. The water project is a part of it. The program also includes training and employing local residents. Over 90% of the organisation’s employees and the employees of all major contractors are Tanzanian nationals. At least half are permanent residents of local villages.

For its local employees the company has developed a strong training and consultation program that increases their level of skill and safety awareness. It aims to hold each employee responsible, not just for their own safety, but for the safety of others. Employees have health insurance and are given annual health examinations, and the Luika Gold Mine has a health clinic that is run by an internationally trained local physician.

To further ensure the health of its employees, the company uses non-toxic cleaning materials in all of its facilities and restricts the use of hazardous chemicals. The company collects and recycles hazardous wastes and services its chemical toilets regularly. It purchases equipment with low emissions and less noise. Since the inception of the company, there have been no deaths, disabilities, or serious injuries recorded.

Shanta Gold also recognises the need for a certain level of education prior to hiring, so has revamped or built new classrooms in local schools and, in some locations, new schools themselves. They just built a new science lab in the local senior school, for example. Construction includes pit latrines to help students stay healthy.

Shanta Gold imports specialists from other countries to train local people in a variety of skills, including how to start their own businesses with money earned from working in the mines. In choosing what projects to implement, Shanta Gold listened carefully to villager preferences and looked at national policy. The four or five programs they developed were all pre-approved by the villagers.

There are many different aspects of sustainability that a company could focus on. Financial sustainability is one area, which Shanta Gold successfully tackled from the beginning and continues to address with its new solar pilot project. The health and welfare of its employees is another, which Shanta Gold paid attention to from the beginning, and which also affects the financial bottom line. And the well being of surrounding communities is a third. This Shanta Gold had to wait on until the purchase price of gold rose enough to afford the finances to take it on, but the intent was there and the company took action as soon as it could.

The fourth sustainability arm is how a company deals with the environment. Shanta Gold’s website states that it has set up an “Environmental Management Program to ensure the company operates in line with local legislation and internationally recognised standards.” It purchases fresh food and meats from local villages to avoid importing, and strives to minimise the company’s waste stream. The company routinely monitors water, air, and soil quality around its mines, and has developed mine closure procedures that include reforestation, including establishing a small tree nursery onsite.

Shanta Gold aims to comply with local environmental regulations, while exceeding the standards of the gold mining industry. It has already developed a reputation in Tanzania for its financial and occupational acumen, and it appears that the company’s sustainability activities are quickly following suit.

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Submitted by: Susette Horspool

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