BRIEF PRESENTATION ON TMAA ACTIVITIES TO DELEGATES FROM GHANA 9 th OCTOBER, 2014

1. BRIEF PRESENTATION ON TMAA • ACTIVITIES TO DELEGATES FROM GHANA • 9th OCTOBER, 2014 TANZANIA MINERALS AUDIT AGENCY

2. OUTLINE • Introduction • Minerals Auditing • Combating Minerals Smuggling and Illegal Trade • Financial Auditing and Tax Review • Environmental Monitoring and Auditing • TMAA’s Success Stories

3. ABOUT TMAA • Tanzania Minerals Audit Agency (TMAA) is a semi-autonomous institution established in 2009 under the Executive Agencies Act, Cap. 245. The Agency was established under G.N. No. 362 of 6th November, 2009. • TMAA is mandated to monitor and audit mining operations in the country for the purpose of maximizing Government revenues from the sector.

4. TMAA ROLES & AUDIT FRAMEWORK MINING ENTITY OPERATIONS TMAA AUDIT ACTIVITIES AUDIT INFORMATION STAKEHOLDERS AUDIT BENEFITS • Quality • Quantity • Value • Royalty due • MEM • TRA • NEMC • NBS • BoT • MOF • Mining entities • General public • Reliable mineral production & sales data • Reliable financial reports and tax returns • Tax compliance • Increased Govt. revenue • Environmental compliance • Sufficient mine closure funds • Informed public Mineral Production Mineral Sales/ Export • Financial analysis • Tax review • Projections CAPEX OPEX • Compliance • Environmental budget &spending Environmental Management Environmental Spending

5. HUMAN RESOURCES 67 TECHNICAL + 25 SUPPORTING = 92 STAFF • Mineral Processing Engineers • Mining Engineers • Economists • Tax Experts • Financial Analysts • Accountants • ICT Specialists • Chemical and Processing Engineers • Environmental Scientists • Geologists • HR Specialists • Procurement Specialists • Legal Experts

6. MINERAL OCCURRENCES IN TANZANIA North Mara Geita Kabanga Bulyanhulu Williamson Biharamulo TanzaniteOne Buzwagi Golden Pride New Luika Liganga Mchuchuma Mkuju Ngaka 6 of 27 www.mem.go.tz

7. MINERALS AUDITING • Gold Bars (Bullions): TMAA Mineral Auditors observe all smelting sessions in their respective gold rooms which includes pouring, marking, weighing and sampling of ingots. • Samples of exported gold bars are then provided to the TMAA laboratory for assaying to determine the quality and quantity of fine gold and silver contained. • Thereafter, the gross value of exported minerals and payable royalty is computed by applying mineral prices obtained from the London Metal Exchange (LME).

8. MINERALS AUDITING …cont’d • Copper Concentrate: TMAA Mineral Auditors witness the loading and weighing in containers for export. • Mineral samples are taken and transported by secure means to the TMAA laboratory in Dar es Salaam where they get analyzed to determine the quality and quantity of fine gold, silver and copper contained. • Diamond and Tanzanite: TMAA Mineral Auditors stationed at Williamson Diamond and TanzaniteOne Mines are responsible for witnessing, recording and reporting on a daily basis gemstones production and export activities undertaken by the mines.

9. STRATEGIC AUDITING TMAA in collaboration with Zonal Mines Offices is conducting strategic audit in areas where there is a potential Government revenue from mineral royalties. Since its inception TMAA has carried this audit in the following areas: • Gold production and sales from vat leaching operations in Mwanza, Geitaand Mbeya regions. • Building materials and industrial minerals in Central, Eastern, Lake Victoria, Northern, Southern, South Western and Western zones. • Gypsum and copper ore in Lindi and Ruvuma regions; lime, salt and copper ore in Kigoma and Katavi regions. • Gold rush areas of Lukwika, Endabash and Tumbelo.

10. COMBATING MINERALS SMUGGLING AND ILLEGAL TRADE TMAA has established special desks at major airports such as Julius Nyerere International Airport (Dar es Salaam), Kilimanjaro International Airport (Kilimanjaro) and Mwanza Airport (Mwanza). The main aim of stationing auditors at the airports is to inspect and verify minerals transported in and out of the country through the airports.

11. FINANCIAL AUDIT AND TAX REVIEW FINANCIAL AUDIT AND TAX REVIEW IS IMPLEMENTED THROUGH: • Auditing books of account Physical verification of assets Reviewing tax accounting Reviewing financial projections and budgets

12. ENVIRONMENTAL MONITORING AND AUDITING Reviewing Environmental Management Plans (EMPs), rehabilitation programs and reports. Undertaking periodic environmental audits to monitor compliance. ENVIRONMENTAL MONITORING AND AUDITING Assessing whether environmental expenditure declared was actually incurred. • Ascertaining whether closure liabilities are secured as per existing legislation. is implemented through:

13. TMAA’S SUCCESS STORIES • Resolute Tanzania Limited (RTL) has paid a total of TZS 100.39bil. (US$ 65.9 mil.) as corporate tax for the period from June 2010 to September 2014. • Geita Gold Mine Limited, together with Samax Resources Ltd have paid a total of TZS 359.98 bil. (US$ 236.31 mil.) as corporate tax for the period from December 2009 to September 2014. • African Barrick Gold has paid TZS 77.4 bil. (US$ 49.9 mil.) as corporate tax for Tulawaka Gold Mine. • Williamson Diamonds Limited has paid US$111,806 as alternative minimum tax. • All these payments result from TMAA audits in collaboration with the Tanzania Revenue Authority (TRA).

14. TMAA’S SUCCESS STORIES cont’d … • Environmental audits conducted by TMAA on major mines has enabled respective mines to improve environmental management activities. • Since inception of TMAA’s airport desks, 53 smuggling attempts have been reported for the period from July 2012 to August 2014; whereby minerals worth TZS 15.8 bil. (US$ 9.88 mil.) were involved. • TMAA’s auditing of building materials and industrial minerals in Central, Eastern, Lake Victoria, Northern, Southern, South Western and Western zones has facilitated collection of royalty amounting to TZS 5.2 bil. (US$ 3.25 mil.) for the period from June 2011 to August 2014. Previously, the Government used to collect about TZS 3 mil. a year from the respective miners.

15. TMAA’S SUCCESS STORIES cont’d … • TMAA collaborates with Lake Victoria Zone to monitor and audit production and sales of gold through vat-leaching operations. This auditing has facilitated collection of royalty amounting to TZS 2.6bil. (USD 1.7 mil.) from production of 857.3 kgs of gold worth TZS 58.27 bil. (USD 37.6 mil.) for the period starting from July 2012 to August 2014.

16. TMAA’S SUCCESS STORIES cont’d … • TMAA successfully audits and analyzes minerals produced and exported by 7 major mines. This ensures availability of accurate and reliable data on minerals produced and exported by the respective miners. Historical Mineral Exports by Major Mines (2005 - 2013)

17. GOLD EXPORTS BY 7 LARGE SCALE MINES (2000 – 2013, toz mil.)

18. MINERAL EXPORT VALUES BY 7 LARGE SCALE MINES (2000 – 2013, USD mil.) 2,168.4 2,167.9 1,785.3 1,582.6 1,109.4 920.8 825.4 783.1 640.8 597.7 493.0 364.3 260.2 117.0 2006 2007 2008 2009 2010 2000 2001 2003 2004 2005 2011 2012 2002 2013

19. TOTAL ROYALTY PAID BY 7 LARGE SCALE MINES (2000 – 2013, USD mil.) 74.1 64.7 64.3 46.9 32.8 27.3 24.3 23.4 19.0 17.3 14.4 10.6 7.5 3.5 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2011 2012 2013

20. REVENUE FORECASTING HISTORICAL AND PROJECTED ANNUAL TOTAL GOVERNMENT TAKE, 2000-2035 (USD mil.)

21. REVENUE FORECASTING HISTORICAL AND PROJECTED ANNUAL GOVERNMENT TAKE (UNDISCOUNTED) BY MINE, 2000-2035 (USD mil.) 21 of 27

22. CORPORATE SOCIAL RESPONSIBILITY CSR EXPENDITURE BY 7 MAJOR MINES

23. Thank You for Listening