Shooting Gold Diggers at African Mine Seen Amid Record Prices
Barrick Gold Corp. (ABX)’s North Mara mine near the Tanzanian border with Kenya disgorges millions of pounds of waste rock each week, piled high around communities where almost half the people live on less than 33 cents a day.
Children in school uniforms scurry across the rubble to reach their classes. Women with water pails atop their heads skirt past the heaps. The piles grow as the longest bull market for gold in at least 90 years pushes Barrick, the world’s largest miner of the precious metal, to increase production.
Villagers, too, are hunting the ore on the North Mara land that their ancestors worked for decades, sometimes paying with their lives.
Security guards and federal police allegedly have shot and killed people scavenging the gold-laced rocks to sell for small amounts of cash, according to interviews with 28 people, including victims’ relatives, witnesses, local officials and human-rights workers.
“They are not arresting them or taking them to court,” said Machage Bartholomew Machage, a member of the Tarime District Council, the highest local government body. “They are just shooting them.”
At least seven people have been killed in clashes with security forces at the mine in the past two years, according to the 28 people interviewed. In at least four cases, police acknowledged the shootings in contemporaneous press accounts.
Killed and Wounded
The dead include Mwita Werema, a father of four who was killed one day after gold set another record price in October 2009; Chacha Nyamakono, who was one year from becoming the first in his family to complete a basic education; and Daudi Nyagabure, shot in February, who was eager to build a future for his pregnant wife.
Fifteen people were seriously wounded in the same period, according to the Legal and Human Rights Center, a human-rights group in the Tanzanian city of Dar es Salaam, and Machage, who was the district council vice chairman until August.
Toronto-based Barrick and African Barrick Gold Plc (ABG), which is 74 percent-owned by the Canadian miner, pay the Tanzanian government for federal police protection at the mine and employ private armed guards, according to company documents.
The violence at North Mara is a brutal dividend of gold prices that have risen almost threefold in the past five years to a record $1,431.25 on Dec. 7.
In written responses to questions about the situation, African Barrick said it frequently faces groups of intruders, often armed, who illegally enter the North Mara mine with the intent of stealing valuable ore.
It also said some thefts, vandalism and other incidents are the result of organized crime, in part stoked by transients in the border region with Kenya.
People killed or injured after crossing into the mine area shouldn’t be considered small-scale miners because they were all trespassing and therefore acting illegally, said Andrew Wray, head of investor relations for African Barrick, in a Dec. 21 written response to questions.
“ABG categorically refutes any claim that any persons injured or killed were artisanal or small scale miners,” he wrote.
He declined to comment on specific cases, citing active or potential police investigations, except for one. He said allegations that mine security inflicted lethal injuries in that instance are “fundamentally untrue.” They were the result of a fight between intruders over stolen ore, he wrote.
Security incidents at the mine have “significantly declined” during the past two years despite record gold prices, Wray said. The company declined to comment on the number of people killed or injured by security forces in the past two years.
Barrick didn’t respond to written questions about North Mara, instead directing them to African Barrick. The Canadian company raised 581 million pounds, the equivalent of $872 million at the time, from the March 19 initial public offering in London of African Barrick.
Aloyce Tesha, a spokesman for Tanzania’s Ministry of Energy and Minerals, which oversees mining, declined to comment when presented with a list of the alleged killings at the mine. In an e-mail, he said the issues involved criminal investigations and referred questions to the police. Calls to the Inspector General of Police and the office of Tanzanian President Jakaya Kikwete were not returned.
“The villagers are human beings and so they would like to get the minerals, and the policemen do not want them to get to the minerals,” Constantine Massawe, the commander of federal police forces at the mine and throughout the region, said in Swahili in a Nov. 11 telephone interview. “It’s not easy. If you tell them to leave, it’s not easy to get them to leave.” He declined to comment further.
During the reporting for this story, Tanzanian police arrested a photographer working for Bloomberg News on suspicion of trespassing at the mine site. He was jailed for a night and had his passport held for six days before he was freed without charges.
Security at the mine, where there are four open pit deposits, escalated after a riot in December 2008, African Barrick has said. A group of people invaded one pit after it had been blasted for ore. They burned $7 million of equipment and cost the mine several days of production. Police shot and killed one trespasser, Wray said.
Much about the killings since then is unknown, including their precise locations. In some areas popular with scavengers, few fences or signs mark where mine property ends and village life begins.
Firing Into Crowds
In several incidents, witnesses and contemporaneous press accounts quoting police indicated that officers fired into or over large crowds. In one killing, police told the government newspaper that shots were fired into the air after some miners tried to disarm officers.
According to Barrick, in some instances deaths and injuries were inflicted by other trespassers, not by the police or security. Barrick said some incursions go deep into its mining areas.
John McKay, a Canadian member of Parliament who sponsored legislation this year that sought to sanction mining companies for human-rights abuses abroad, said he wasn’t familiar with the North Mara mine and he declined to single out specific operators. Still, he said the profits delivered by gold’s high prices are causing a “moral blindness” at some companies.
“It seems like the attitude is, ‘If we have to knock a few heads along the way, so be it,’ because there is so much money to be made,” he said. His proposal was defeated in Parliament on Oct. 27.
The government of Guatemala is considering a suspension of operations of Vancouver-based Goldcorp Inc.’s Marlin mine after the Inter-American Commission on Human Rights alleged that the facility was contaminating water supplies. Jeff Wilhoit, Goldcorp’s vice president of investor relations, said the complaints underlying the ICHR’s petition, including alleged human-rights violations, were without merit.
He also said the company was implementing recommendations from an independent human-rights assessment completed in June.
The World Gold Council, the London-based mining trade group, helped boost the surge in investor demand now bringing record results to Barrick and other members. It started SPDR Gold Trust, the first exchange-traded product backed by bullion approved in the U.S. The 10 largest such funds held more than 2,113 metric tons of gold valued at about $94.2 billion as of Dec. 21, according to Bloomberg data. They allow investors from retirees to hedge funds to invest in gold.
Land Once Theirs
Mining firms are spending some of the money they’re earning from record gold prices to boost production, exploration and development at North Mara and in other corners of the developing world. Those living near veins of gold are in turn trying to profit from ore in their communities.
“There is awareness amongst communities about the fact that the gold price is so high, but that very little of the benefit from that seems to be coming back to them,” said Keith Slack, the Washington-based head of Oxfam America’s extractive industries program, which works on security and human-rights issues globally.
There are growing fears that the collision of these forces could yield a new wave of turmoil for years, Slack said.
At North Mara, local “barefoot geologists” were the first to mine this rock, working by hand decades ago on their ancestral lands. An estimated 40,000 people in the area depended on small-scale mining for their livelihoods, according to a history compiled by the mine’s first developer, Afrika Mashariki Gold Mines Ltd.
The mine’s development and growth displaced an estimated 10,000 households, including many who didn’t receive compensation under previous owners, according to the African Barrick prospectus.
Vancouver-based Placer Dome Inc. bought the mine in 2003. Barrick acquired Placer Dome in 2006 for $10.4 billion, making the company, founded by Canadian billionaire Peter Munk, the world’s largest gold producer.
Total payments to the local community are unclear. African Barrick said in its written response that it supported thousands of school scholarships. It didn’t say how much it had spent on those efforts.
Barrick acknowledged deaths at the North Mara mine in two sentences in its 486-page IPO prospectus, dated March 19. “In some cases, those involved in security incidents have been injured, sometimes fatally,” one of the passages read.
Two months after the December 2008 unrest, Barrick Chief Operating Officer Peter Kinver credited “a great deal of support” from the Tanzanian government for helping with what he called “sporadic incursions of people coming onto the mine.” That support helped the company meet its production goals at North Mara in January 2009, he said on a call with analysts on Feb. 20, 2009.
The company has reported no other major disruptions to production since.
Mwita Werema knew the risks of scavenging waste rock for gold, said his widow, Eunice Mwita. Her 35-year-old husband was a lifelong small-scale miner who lost his land to the mine in 2002, she said.
“He used to tell me, ‘If they catch me one day, I’m sure they will kill me,’” she said, speaking in a whisper barely loud enough to be heard above the clucking of a single chicken just beyond her open doorway. Her four children played outside on a low, sallow mound of earth, their father’s grave. As she spoke in July, she was expecting a fifth child any day.
Werema was shot on Oct. 15, 2009. That morning he and his mining partner, Nchia Mwita, had worked their way deep into a vast area of waste rock that locals call the “Two-Six,” which abuts one of the pits. They carried water bottles, hammers and their rucksacks, his friend recalled.
People each day flood the Two-Six, named long ago when the mine designated it as rock pile No. 26, according to villagers. The daily activity supports a single-stool barber shop, operating from a shack erected on the stones. A handwritten sign identifies it as the Two-Six Hair Salon.
Nchia Mwita’s and Werema’s story mirrors the daily cat-and-mouse routine described by other miners. Typically they may get 30 minutes to sift stones before security guards appear and force them to flee, they said. They’ll lie low for 10 or 15 minutes, then return.
Bribes for Access
Sometimes they can buy time by paying small bribes, which some police and security officers routinely demand, said miners and local officials. Mwita said those who are paid can easily betray villagers, turning on them if fellow officers arrive.
The day Werema was killed, he and his friend weren’t prospecting long when two large crowds of scavengers began moving in behind them, working their way up the rock piles as well, Mwita recalled. About eight armed security men appeared on higher ground roughly 500 feet away, Mwita said. One guard began firing randomly at the crowd, he alleged.
Suddenly, “I saw him go down,” Mwita said of his friend Werema. Blood spilled onto the stones. He was shot once in the back and died, Mwita said.
Police took responsibility for the shooting in statements to local newspapers, though they said Werema was shot in the left leg. Mwita said he saw a private Barrick guard pull the trigger.
North Mara’s Allure
There’s no mystery to North Mara’s allure for locals. While company data show that the rocks African Barrick processes there yield an average of about 3 grams of gold per metric ton, a bagful of the best waste rocks can be sold for the equivalent of a few dollars to buyers operating from the trunks of cars parked right on the rock fields.
The mine, sitting east of Lake Victoria, had 2.9 million ounces of proven and probable reserves at the start of 2010.
As much as 40 percent of the population in the surrounding Tarime district survives on less than 33 cents a day, the government estimated in 2005. Many live mostly off what they can grow.
Record gold prices have drawn more people to scavenge for gold-laced ore during the past two years, said Nyagabure Chacha, who lives in a hut that is an easy walk from the rock piles.
Miners track the price of gold using the internet connections on mobile phones they must take to a communal solar-powered charging shack because most have no electricity.
‘People Have Nothing’
“These people have nothing,” Chacha said. “They have no resources to survive.”
On Feb. 2, Chacha’s son, Daudi Nyagabure, allegedly was among the victims. Around 1 p.m. that day, security forces shot and killed the 21-year-old, his father said, based on accounts from others at the scene.
The son was starting his own family. He and his 19-year-old wife had one child, and she delivered another four months after becoming a widow.
Like several relatives of miners killed here, the old man expressed resignation, not bitterness. He quoted a popular Swahili proverb about the impossible task of gathering spilled water back into a cup.
Those who own the mine and the people who live around it “are moving in opposite directions,” he said. The company is rising, he said, as the people fall.
On Nov. 19, Barrick announced it had joined an international group of extractive companies, governments and non-profits that promotes voluntary standards to foster human rights in security operations.
The non-binding guidelines, called the Voluntary Principles on Security and Human Rights, include one saying that companies should report credible allegations of human-rights abuses by public security forces to the appropriate authorities.
Wray, of African Barrick, said the company “will make a formal request” to the regional police commissioner’s office for an investigation if it’s made aware of allegations of abuse.
The company mentioned no violence at the mine in reports describing its social-responsibility record on community relations, health and safety for 2009 and 2010. Last year’s report stated: “At Barrick, we are committed to making a positive difference in the communities in which we work.”
Wray wrote in a Dec. 15 statement that the company is installing additional perimeter fencing, walls and security cameras “in certain sensitive areas” and is trying to educate local residents about the dangers of illegal mining.
Rising gold prices pushed Barrick to record net income in the third quarter of $837 million, or 84 cents a share. As of Dec. 22, its stock had gained 30 percent this year, matching the gain of the 16-company Philadelphia Stock Exchange Gold and Silver Index. Barrick produced 7.42 million ounces of gold in 2009, compared with 5.3 million for its nearest competitor, Greenwood Village, Colorado-based Newmont Mining Corp.
“We are a company that has been a major beneficiary of raising the gold price,” Regent, Barrick’s CEO, said Nov. 11 at a London gold conference sponsored by RBC Capital Markets.
In the first nine months of this year, Barrick’s cash margins increased 52 percent to $783 an ounce, compared with $515 an ounce a year earlier, according to a financial statement released by the company Oct. 28.
African Barrick has been a laggard. On Oct. 14, its share price dropped 9.5 percent in London after the company cut full-year output estimates at its new Buzwagi gold mine, which is about 300 miles south of North Mara. It said workers had stolen diesel fuel from the mine, causing production delays.
“They’re off to an appallingly bad start,” said Peter Rose, an analyst at Fox-Davies Capital Ltd., in London, who recommends buying ABG stock and has a one-year price target of 674 pence. The March IPO wouldn’t have been possible without high gold prices, he said.
African Barrick’s share price began recovering after it announced positive exploration results at two separate sites Nov. 29 and Dec. 2, including North Mara. It closed at 591 pence yesterday.
Production stoppages are down at North Mara, Wray said, adding that the company budgeted a total of $20.4 million for security at all four Tanzanian mines this year. The biggest share of those costs goes to North Mara, a 16-square-mile (42-square-kilometer) property just west of Tanzania’s Serengeti National Park, one of the world’s most renowned game preserves.
Of the 15 people listed as injured at the North Mara mine by the Legal and Human Rights Center of Dar es Salaam, Bloomberg News interviewed two. It also found a woman, Mwora Marwa, who was listed as dead by the human-rights group, after she was shot and hospitalized for almost a year. All three provided medical or other records documenting their injuries from gunfire.
They included a 12-year-old boy whose right eyeball was ruptured by a bullet and a 28-year-old man, Joseph Ikaya Mgaya, who said police approached him and fired a single shot into his right leg without warning or provocation.
Mgaya carries two letters in his pocket. One is from the general secretary of his village. It says he was “shot by the patrolling police near the mining area” and asks police officers to stop harassing him. The second, stamped by police, obliges the request. “Please don’t disturb him, he is sick and I have checked his documents and they are legal,” it says.
Of the seven killed whose families were interviewed by Bloomberg News, at least five of the incidents were reported in Tanzanian newspapers. Police were quoted taking responsibility for four.
One report stated that on July 8, 2009, police confronted hundreds of villagers at the mine. Massawe, the police commander, was quoted saying villagers threw stones.
Rushing for Bullets
“Police fired so much tear gas and so many gunshots to prevent the villagers from invading the mine (they) ran out of ammunition stock and had to rush for more bullets,” Massawe was quoted saying in the state-owned Daily News.
Two people were killed by the gunfire. One was Chacha Nyamakono, 17, who lived with his extended family in huts made of mud, stone and handmade bricks about a two-hour walk from North Mara.
He was the first in the family to attempt an education, loved science and always had his nose in his books, said his sister-in-law, Paulina Chacha, 36. The family burned his high school papers and notebooks after his death because they were too painful a reminder, she said.
“He said, ‘When I’m done with school, I’ll provide a better life for you,’” recalled his 73-year-old grandmother, Marita Nyamakono, perched on a stool next to a scrawny, sleeping dog.
‘Hard to Survive’
“It’s very hard to survive here,” she said. “We don’t have sugar. We don’t have medical care -- nothing.” The other miner killed that day was Mwita Machapele, 37, a father of three sons. He was shot in the back, according to both his wife and Massawe’s comments in the government newspaper.
His widow, Mama Godfrey, said she collected her husband’s bloodied corpse from police on a road next to the mine, where about 500 people had gathered.
“I didn’t bother asking the police what happened,” she said, “because it was the police who killed him. There was no point of asking. Even if I asked, what could I do?”
Bloomberg News did not include some cases tallied by local officials or human-rights investigators in its count, often where there wasn’t a witness or a contemporaneous press account. One of those cases involved Christopher Jakuo, 42, who was shot and killed at the mine on June 3, 2009, according to his widow and Machage.
What her husband earned scavenging ore paid for extras, like meat and milk, said Mama Christopher, who lives in a mud and thatch hut in a hamlet called Chuchuri. Since his death, the family survives on what it can grow: sweet potatoes, corn, cassava and millet.
“You can see the children are losing weight,” she said. She dreams of her dead husband. “We speak together and I tell him about my problems raising the children. I can’t do this alone.”
One incident brought the community close to rioting, according to several accounts -- the death of Muhere Biraro, a popular local leader.
Biraro, 40, lived with his wife and seven children in three stone and mud huts in a hamlet called Sekube.
Starting in late 2008, Biraro worked for Barrick in one of the mine’s pits, according to his wife, Rhoda. It was the first full-time employment in Biraro’s life, bringing steady income and even health services, including medicine, from the mine dispensary.
The family began building a brick home so they could finally move from the huts, she said, sitting on a plastic chair just a few feet from where her husband’s hardhat hangs. It’s on a nail pounded into the mud wall above the bed they shared.
Their new life ended when Biraro was fired in early 2009 as part of 200 dismissals that a company press release called a cost-saving move.
Desperate, Biraro began small-scale mining in the Lake Victoria region, hours from the family’s home, his wife said. This year he focused on the Barrick rock piles instead, because they were close, according to a friend he worked with at the mine.
On March 20, one day after Barrick completed the IPO of its African Barrick unit, Biraro went hunting for stones. The next morning, his wife learned her husband was at a small health clinic near the mine.
Drenched in Blood
A friend of her husband’s, Charles Mbusiro, 39, arrived first at the hospital and recalled seeing Biraro drenched in blood. “He had lots of injuries, in the head, in his back, all over,” Mbusiro said.
Biraro was weak, his friend said. He described being confronted at the mine by Barrick’s private security officers.
“They surrounded me and they attacked me and beat me and they stabbed me and took me and dumped me by the roadside. The police picked me up from there,” Mbusiro said Biraro told him before he died.
With villagers on the verge of rioting over the death, Tanzania Omtima, the village chairman, and Isaac Zablo, a local Christian minister, said they met with senior mine managers and demanded answers. Mine security officials said they had found Biraro disoriented, then handed him over to police, both men said in separate interviews.
Omtima and Zablo insisted on being taken to the scene to question security guards and others, and to examine the surroundings. After gaining permission, both said they were stopped en route by mine security guards, who refused to let them pass. The family and Omtima said no one was arrested.
In a statement to the government newspaper that was published on its website that same day, Massawe, the police commander, alleged that Biraro had been killed by other small-scale miners after retrieving ore.
“He was an intruder and it seems he has been killed by colleagues,” Massawe was quoted saying.
In his statement, Wray said the allegations that mine security killed Biraro “are fundamentally untrue” and that “evidence instead strongly suggests that his injuries were the result of a conflict with other intruders over gold-bearing material stolen from the mine.”
He also said that while the two community leaders, Omtima and Zablo, initially were granted access to the site of the killing, it was under the control of police and “this area was a crime scene.”
Biraro’s widow now spends her days walking from home to home with her children in tow, offering to do odd jobs so they can live off more than the crops they grow.
Her oldest boy is often absent. He feels responsible now for the family, she said, so he scrounges rocks at the same mine where his father was killed.
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