by Ben Taylor
Progress in LNG plant negotiations
Negotiations between Tanzania’s Ministry of Energy and Equinor and two multinational oil companies – Shell and Equinor – on the proposed liquid natural gas (LNG) processing plant in Lindi region are said to have made good progress. However, the target date set by President Samia Suluhu Hassan for conclusion of the negotiations – December 2022 – was missed. The Minister for Energy, January Makamba, explained that the delay in concluding talks was solely due to the Christmas holidays.
Talks between the government’s negotiation team and Shell and Equinor and their partners were revived in 2021 after having been stalled for some time. The two sides are said to have agreed on key issues, and have signed an initial Host Government Agreement (HGA).
In June 2022, President Hassan witnessed the signing of the initial HGA, and directed the team to complete discussions on the remaining areas before the end of December. “We would have finished drafting the agreement,” said Mr Makamba, “but our partners are now taking leave during Christmas.” He added that the drafting will resume in the new year. Mr Makamba said the negotiations have been complex and have taken considerable time. “I was in Arusha for four days, and we were meeting from 7:00 in the morning to close to midnight,” he explained.
The investing companies are optimistic about the project’s execution after the discussions conclude. “From Equinor’s side, we are encouraged by the progress we have seen in the talks between the LNG investors and the government. While we are still working on finalising the agreement to progress our LNG project in Tanzania, we have now agreed on the key items and have entered the drafting stage,” reads a statement.
To date, the government in partnership with oil and gas companies have discovered a total of 57.54 trillion cubic feet (TCF) of natural gas in various blocks. This includes 10.41 TCF from onshore wells and 47.13 TCF discovered offshore. Natural gas is currently used mainly for electricity generation, industrial and domestic activities as well as powering vehicles. Around 60% of the electricity consumed in Tanzania is generated using natural gas, with the rest coming from other sources such as hydropower plants, oil, solar and biomass.
The planned LNG plant in Lindi will facilitate the export of the natural gas to the world market. The agreements to be signed after the current negotiations include the final Host Government Agreement, which spells out terms of the project, the project law and the benefit-sharing agreement. A final investment decision could be reached in 2025, potentially allowing exports to start before 2030.
Earlier, a new report by Stanbic Bank Tanzania has suggested that the Liquefied Natural Gas (LNG) project can potentially raise Tanzania’s Gross Domestic Product (GDP) by over USD $7bn (TSh 16 trillion) per annum and earn the government $2bn in revenue. “It is believed that, upon completion, Tanzania LNG will be the largest energy project in Africa’s history in terms of capital investment. It would increase Tanzania’s GDP by $7 billion per annum,” Stanbic Bank Tanzania said in a statement yesterday. Tanzania’s GDP in 2020 was estimated at USD $62 billion, according to the World Bank.
The magnitude of the economic impact is correlated with the expected future price of LNG. The Bank accounted for this by modelling different future price scenarios, ranging from $5.50 MMBTU to $12.00 MMBTU. “It represents a transformational economic impact; between 270,000 and 600,000 direct and indirect employment opportunities during the lifespan of the project; between $2 billion to $6 billion in fiscal contributions to the government of Tanzania per year; and between $3 billion to $8 billion per annum in balance of payments contributions,” the statement reads.
In his remarks at the report launch, Mr Makamba said the report insights were critical in providing an overall understanding of the macroeconomic impact of the project. He also affirmed the government’s commitment to finalizing the project and tapping into the wider opportunities provided by alternative energy sources. “We will be unapologetic in the extraction and consumption of gas energy that exists in our country,” said Mr Makamba. “In Africa, if we are to extract all gas resources, we will contribute just 3 to 3.5 percent of global greenhouse gas emissions. Tanzania is building a robust gas economy, and not just limited to liquefied.”
The Minister said the envisaged LNG project with its huge financial and economic impact to the nation would bring about changes on the way public and private institutions would operate. “It can’t be business as usual. It is huge investment, something never done before. Public and private institutions will be required to be able to execute their jobs on top global levels,” he said. (The Citizen, Daily News)
Gold miners launch legal action against Barrick Gold
A group of Tanzanian villagers is suing Canadian mining giant Barrick Gold over alleged police killings, torture and other abuses at North Mara gold mine in Tanzania. Further, the families of two miners allegedly killed at the mine in 2019 have launched a legal claim against the London Bullion Market Authority (LBMA) for certifying its gold as free from major human rights abuses.
The first claim, filed in the Superior Court of Justice in Ontario, Canada, accuses mining of being complicit in extrajudicial killings by police guarding its North Mara facility.
The miner has faced similar charges various times in recent years. In 2013, twelve villagers living in the neighbourhood of North Mara sued the company, then known as African Barrick Gold (ABG), in a UK court for the death of their six relatives, whom they said were shot by police in 2011. In 2015, the company agreed to an out of court settlement to compensate the villagers for undisclosed amounts of money.
This time, the plaintiffs include relatives of five men killed by police assigned to the mine, according to the filing. Nine of the plaintiffs say they were themselves beaten or shot by the police. The claim states that residents routinely enter “waste rock areas” at North Mara to retrieve rocks with trace amounts of gold, which they process and sell.
It also claims that Barrick “has had effective and practical control” over police stationed at the mine and that the company’s security agreements with the police effectively make them the mine’s “private and heavily armed security force.”
In the second case, the law firm Leigh Day has filed a legal claim at the High Court in London alleging that the LBMA has been wrongly certifying that gold originating from North Mara gold mine was free from major human rights abuses. According to a statement, the two men died while working at the mine. “The claimants assert that despite a publicly recognised pattern of systemic human rights abuses associated with the mine over many years, the LBMA has continued to certify gold from the mine under its LBMA Responsible Gold Standard,” the law firm claimed.
According to Leigh Day, the first miner died in July, 2019 after being shot by security staff at the facility while the second miner died in December of the same year after being shot by Tanzanian police. The claim, filed in the Superior Court of Justice in Ontario, Canada on Wednesday, accuses the world’s second-biggest gold miner of being complicit in extrajudicial killings by police guarding its North Mara facility, located about 30km (18 miles) from the border with Kenya.
Barrick Gold Corporation has refuted the allegations, saying Barrick had frequently made it clear that North Mara’s security personnel are unarmed and that the mine does not supervise, direct, control or instruct any mission, assignment or function of the Tanzanian police force, which is a state institution.
Barrick president and chief executive Mark Bristow said the group was proud of its human rights record around the world and of North Mara’s strong working relationship with the communities around the mine. He said many of the mine’s employees have been drawn from the surrounding villages and in line with Barrick’s other operations, North Mara prioritises local employment and procurement.
“While the vast majority of local residents are law-abiding, there are rogue bands, armed and well-organised, who from time to time invade North Mara to steal gold-bearing rock, presenting a serious risk to the safety of mine personnel and community members in the process,” said Mr Bristow.
“As recently as last month, North Mara was attacked by an armed force of almost 100 men. Despite the police’s attempts to repel them, 71 managed to scale the site’s nine-metre-high perimeter wall and engaged with the mine’s unarmed security personnel. The policemen eventually removed them, but one of the intruders died as a result of his injuries. “Two of the policemen were also injured. Barrick made a public announcement about the incident at the time. This was far from being a one-off occurrence and North Mara lives with the constant threat of such invasions.”
A spokesperson for the company also told Reuters news agency that the Canadian legal action “is riddled with inaccuracies,” and that it “attempts to advance claims against Barrick Gold Corporation in Ontario based on alleged actions of the Tanzanian police, even though Barrick exercises no control or direction of any nature over the Tanzanian police.” “We intend to vigorously defend against these allegations in the appropriate forum,” she said.
Tanzania’s deputy minister of Minerals, Dr Stephen Kiruswa, said the accusations were stirred up by “groups which want to get money from global NGOs,” playing down the seriousness of the legal action. “We have met residents near the mine and they are happy with the support of the miner to community life,” he said, adding that there were no any human rights abuses. (The Citizen, Al Jazeera, Reuters)
Tanzania, Uganda hit back at EU on oil pipeline plan
The governments of Tanzania and Uganda have responded in robust terms to criticism of the East Africa Crude Oil Pipeline (EACOP) project from the European Union Parliament.
In September, the EU Parliament adopted a resolution raising concerns of human rights violations, major environmental and climate risks posed by the execution of the EACOP project. According to the resolution, more than 100,000 persons are being forcibly evicted to make space for the pipeline, and they are being deprived of the use of their land and thus also their livelihood before receiving compensation.
The resolution calls “for the EU and the international community to exert maximum pressure on Ugandan and Tanzanian authorities, as well as the project promoters and stakeholders, to protect the environment and to put an end to the extractive activities in protected and sensitive ecosystems.” It further calls for efforts to use “the best available means to preserve the culture, health, and future of the communities affected and to explore alternatives in line with international climate and biodiversity commitments.”
Responding to the resolution, January Makamba, Tanzania’s Energy Minister said that the overall pipeline route has been designed to minimise environmental and social impacts. “Some physical displacement (loss of shelter) and economic impact (full or partial loss of farmland) is unavoidable,” he admitted, but added that “land acquisition is compliant with both the Laws of Tanzania and the Performance Standards of the International Finance Corporation (World Bank).” “We offer a choice between replacement housing (generally of higher standard than the existing dwelling) and cash compensation. Around 85% of the affected people have elected for replacement housing, and construction of these replacement houses is ongoing.”
Mr Makamba insisted that “no land will be accessed by the project until compensation has been paid and notice to vacate has been given. In fact, those affected will also be entitled to transitional food support and have access to livelihood restoration programmes. The land acquisition process is expected to be completed in mid-2023.”
Finally, he noted that “the pipeline will be monitored by a state of the art fibre-optic cable to detect both temperature changes and vibrations and it will be executed in an exemplary manner in terms of transparency, shared prosperity and sustainable development including the environment and respect for human rights.”
Responses in Uganda were less diplomatically expressed. The Deputy Speaker of the Ugandan Parliament, Thomas Tayebwa, described the resolutions as “deliberate misinformation.” “These are projects which were approved by the Parliament of a sovereign country,” he said, “and anything to do with challenging their approval is an affront to the independence of this House and we cannot take it lightly.”
“The EU bile against the project”, he went on, “betrays neo-colonial attitudes and imperialism of the EU Parliament”.
He further derided the EU Parliament for closing an eye to the EU’s own emissions. According to Mr Tayebwa, EACOP will only represent 0.5%, yet the EU with just 10% of the world population is responsible for 20% of emissions, and member countries are exploring plans to deepen fossil-fuel extraction.