A subsidiary of Barrick Gold ABX-T lost as much as US$31-million annually at one of its Tanzanian gold mines as a result of organized criminal activities that sometimes involved the local police, an internal report says.
The North Mara gold mine in Tanzania was “fully infiltrated” by at least one criminal syndicate that stole millions of dollars in fuel, equipment and high-grade gold-bearing rock, with the collusion of police, the report found.
It also warned that there was widespread corruption, fraud and misappropriation in the mine’s contracts and land compensation payments.
The Globe and Mail obtained the internal report after it was cited in a case now under way in the High Court of Justice in London, where Tanzanian villagers are claiming that Barrick co-operated with local police who caused deaths and injuries in the local community – an allegation that the company denies.
The 21-page report was prepared in November, 2017, by a consulting firm, Europe Conflict and Security Consulting Ltd., for a security contractor at Acacia Mining, the British-based Barrick subsidiary that operated its gold mines in Tanzania at the time.
The report estimated that criminal activities at North Mara “may easily exceed US$20-million annually” and could be as much as US$31-million. “Acacia staff and the criminal syndicate are reportedly involved in all criminal activities surveyed,” the report said. “This indicates a significant level of collusion/infiltration.”
Barrick has faced scrutiny for more than a decade for police-related violence and deaths at North Mara. Dozens of local villagers have reportedly been injured or killed by police, who receive regular support from the company for providing security outside the mine. Barrick took direct control of the mines in 2019 after buying full ownership of Acacia, which was previously 64 per cent held by Barrick.
Barrick has often blamed the violence on “intruders” – the local term for the hundreds of villagers who illegally enter the mine in search of gold-bearing rock. But the internal report estimated that the losses from trespassers were only about US$200,000 a year.
In comparison, it said, the mine was losing as much as US$2.5-million annually from the organized theft of high-grade gold-bearing material from high-security sections of the mine, with the involvement of Acacia’s staff and the police. As much as 250 kilograms of high-grade gold-bearing material was being stolen every day, it said.
The syndicate or syndicates at North Mara had “strong intelligence, operational and organizational capabilities,” the report said. The criminals had the ability to manipulate security-camera coverage, move large stolen items without detection, rapidly adjust exit routes when detected, and co-opt the police and security guards, it said.
As many as 30 per cent of the mine’s staff could be involved in the activities, with “local government and political patronage” protecting the criminals, the report said.
In addition to the outright theft of materials, corruption in land compensation agreements was estimated to be costing a further US$10-million to US$29-million annually, and there were additional unknown costs from contract fraud and unlicensed gold mining around the mine.
The presence of organized criminal groups at North Mara, and the involvement of police, do not appear to be disclosed anywhere in Barrick’s annual reports since 2017.
It is unclear whether the losses have continued at the same scale in the past several years. In a press release in March this year, however, Barrick said a Tanzanian government task force on gold smuggling had requested access to the North Mara mine site to inspect an underground area where it suspected illegal mining was occurring. It said the task force entered the mine and discovered an illegal miner, who fell to his death while trying to escape arrest.
A spokesperson for Barrick did not respond to The Globe’s queries about the report on criminal activities at North Mara. But in the London court case this year, Barrick lawyers have acknowledged that the company was aware of allegations that the mine was infiltrated by criminal syndicates in collusion with the police.
The mining company “took what steps it could, including rotation of police officers assigned to the mine site, to prevent collusion,” Barrick said in its statement of defence.
The company also said it had made complaints to the regional police commissioner about police officers suspected of allowing trespassers to enter the North Mara site.
Lawyers for the Tanzanian claimants, in their court argument, said Barrick must disclose more information on the North Mara criminal activities. They argue that the police violence is sometimes a result of police collusion with one or more criminal syndicates at North Mara. To help the syndicates, police have controlled access by the trespassers and used force against villagers who were suspected of competing with the syndicates for gold-bearing rock, the lawyers said.
A British-based rights group, Rights and Accountability in Development (RAID), said the alleged police involvement in organized criminal syndicates at North Mara was troubling, since the police are still involved in day-to-day security at the mine today. “It raises serious questions as to why Barrick continues to have such a close relationship with the police,” said Anneke Van Woudenberg, executive director of RAID.
“Barrick should be seeking to reduce their reliance on the police, not to increase it, as they have been doing,” she told The Globe.
Barrick, in its responses to questions about police violence in the past, has repeatedly argued that it does not employ or control the Tanzanian police, although it has acknowledged that it has a signed agreement with the police and provides support to them.