African Barrick Gold (ABG) is a significant driver of economic growth in Tanzania, supporting tens of thousands of jobs and contributing $981 million, or more than 3 percent, to the country’s gross domestic product in 2012, according to a new study by Ernst & Young.
Tanzanians make up 93 percent of ABG’s workforce in Tanzania and earn an average annual gross wage of TZS22.4 million ($14,300) — 10 times more than the national average of TZS2.2 million ($1,390). For every ABG employee, 11 jobs are created in the Tanzanian economy, meaning ABG’s operations support more than 66,000 jobs across Tanzania, the study said. This is in no small part due to the $514 million spent by ABG last year on goods and services in Tanzania.
“ABG is an economic engine that creates jobs, supports businesses, builds wealth and develops skills in Tanzania,” says ABG CEO Brad Gordon. “ABG also continues to invest heavily in sustainable development in the communities where we operate and throughout Tanzania. We are proud of the legacy we are building and look forward to working with our host communities for many years to come.”
In addition to supporting tens of thousands of jobs, ABG’s total tax contribution in Tanzania in 2012 was $223 million, according to the study. This includes $93 million paid by ABG and $68 million paid by ABG’s employees. Another $62 million in taxes was generated by indirect and induced activity from ABG’s operations, such as taxes paid by ABG’s suppliers.
While the onset of difficult market conditions in 2012 compelled ABG to implement a strategy based on rigorous capital discipline, the company continued to fulfill its commitments to local communities, the study found. ABG invested $14.4 million last year on numerous sustainable development initiatives, including more than $1.5 million on health initiatives, more than $500,000 on fresh-water projects and nearly $1.3 million on community programs. Many of these initiatives were funded through the ABG Maendeleo Fund, a community development fund created by ABG in 2011. Others were part of village benefit implementation agreements signed last year with seven villages near ABG’s North Mara mine.
ABG’s social investments are helping build strong relations with local communities. Biharamulo District Commissioner Richard Mbeho recently attended a ceremony to mark the handover of ABG-funded development projects worth TZS3 billion ($1.86 million) to communities near the Tulawaka mine. According to the Tanzania Daily News, Mbeho remarked at the ceremony that, “African Barrick Gold recognizes the importance of social infrastructure to communities. That is why Tulawaka Gold mine invested much in health, education, water, roads, environmental conservation and training youths in technical skills.”
ABG, an affiliate of Barrick Gold, currently operates three mines in northwest Tanzania, Bulyanhulu, Buzwagi and North Mara. The company recently agreed to sell a fourth mine, Tulawaka, to the Tanzanian State Mining Corporation.