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Barrick's Tanzanian project tests ethical mining policies Add to ...

About 10,000 families have been displaced by the mine’s growth since 1997, according to a prospectus issued last year by Barrick’s subsidiary, African Barrick Gold, which is 74% owned by the Toronto-based mining giant. The relocations began with North Mara’s original owner, Afrika Mashariki Gold Mines Ltd., which sold the mine in 2003 to Vancouver-based Placer Dome Inc.

Relocation has not guaranteed safety. Magige Nyamhanga, a 31-year-old farmer who lives about 100 metres from the mine, was accidentally shot in the abdomen in 2009 while walking on a nearby road as police were chasing a group of invaders. His house has been relocated twice in the past dozen years as the mine expanded. He says the blasting at the mine wakes him up at night, and the dust leaves him coughing and exhausted.

The displaced families were given compensation, but those who were relocated in the 1990s were paid less because of a socialist-era law that deemed all land to be owned by the state. The families were compensated only for their buildings and crops; they never received the full market value of their homes. “The process suffers from a local perception of inadequate compensation for previous resettlement,” African Barrick acknowledged in its prospectus.

Privately, some company officials go further. The early payments were “peanuts,” one official acknowledged.

“The mine is a salutary lesson in how not to establish a mine within or near to an existing community,” said a report last year by the South African Institute of International Affairs, an independent think tank affiliated with the University of the Witwatersrand and funded by the United Nations. The institute’s researcher was given access to Barrick’s four Tanzanian mines, and Barrick made management available for interviews. “There is constant and persistent anecdotal evidence that the way in which the mine was established was neither transparent, nor did it secure the support of the local community,” the report said. “Moreover, there are repeated reports from people involved in mining and community development work in the area over many years that the community feels duped and deceived by the way in which the mine was established.”

The report says Barrick inherited a “perfect storm” of problems when it acquired North Mara in 2006 as part of the Placer Dome purchase. But it notes that those problems were compounded by Barrick’s own mistakes, including a much-publicized spill of acidic water from the mine’s storage ponds in 2009. The report concluded that Barrick may have a legal licence to operate at North Mara but it lacks a “social licence.” In other words, it has failed to win the support of the local community, a crucial requirement for any mining company these days.

What’s more, the report said, “The company has acknowledged that not only does it not enjoy a social licence to operate the North Mara mine, but that the very viability of the mine is under threat.”

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If someone at Barrick hinted to the institute’s researchers that the company might abandon North Mara, the company now insists it is fully committed to it. “We think shutting down a mine that provides employment and other meaningful benefits to thousands is not a good solution,” Barrick president Aaron Regent wrote on The Globe and Mail website recently. (Read Mr. Regent's column: Related contentBarrick Gold and North Mara: the search for common ground)

Those employment benefits, however, are relatively small in comparison to the population. North Mara employs about 700 Tanzanians, along with another 900 on contracts. The jobs are far from enough for the community of about 70,000 villagers around the mine, and the high unemployment rate has added to their alienation and anger. Half of the Tanzanian population earns less than $2 a day.

When Barrick acquired the mine, it knew that North Mara would be a difficult and sensitive challenge. Shooting deaths have been documented at the mine site for at least the past six years. By last year, the company was claiming progress in reducing the violence. And then the deaths began again: At least five villagers were shot dead by Tanzanian police on May 16 at North Mara.

The Tanzanian government and the company both launched investigations into the shootings, but it wasn’t enough to stem the tide of bad publicity.

The clashes with the invaders are far from the only controversy at North Mara. There are land and compensation disputes, environmental problems, arguments over economic benefits and, lately, allegations of sexual assault by police and security guards at the mine. Adding fuel to all of these disputes is a ferocious political climate, with Tanzanian and Canadian activists united in an intense campaign against Barrick, using everything from street protests to YouTube videos. Barrick has responded with an array of tactics, from greater transparency at some moments to threats of legal action at others.

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