“Beneficiation is about capturing value at every node of the value chain: From the market, to pricing, provenance and processing.”
Exclusive interview with M. M. Mecktilder, Executive Director, Tanzania Women in Mining and Mineral Industry. At the upcoming Nigeria Mining Week, she is part of the programme in a session on “Developing Nigeria’s Gemstone Value Chains” and a discussion on “The Role of Women in Building Responsible Sustainable Mining Projects.”
Thank you for joining us. Let’s start with some background on you and your role at Tanzania Women in Mining and Mineral Industry.
My name is Mecktilder Mchomvu. I’m from the Tanzanian Women in Mining and Mineral Industry (TWiMMI). But a little bit more about me: I work across the whole mineral value chain, and my roots are in artisanal and small scale. Actually, my roots started in artisanal and small scale mining in Morogoro in Tanzania and then moved to Nanyupu in Mozambique. But today I lead the Tanzanian Women in Mining and Mineral Industry, TWiMMI. I advise governments and investors across the African mineral value chain.
I also run a mine-to-market gemstone house where we do value addition for minerals mined in Tanzania, Nigeria, Malawi, Zambia and Mozambique. I am also a partner in a support service providing company that works with medium and large scale mining across Africa.
I do not see mining as digging things and shipping them out. I see it as a value chain. That is from the pit all the way to policy, from the rough gemstones all the way to finished pieces that can be worn by men and women across the globe. And the question that I usually carry into every room is very simple. Where is the value leaking? And how do we keep it right here at home.
Why is beneficiation becoming such an important topic mining jurisdictions?
Beneficiation, why now? The main reason is because for centuries, Africans have been price-takers. We export the rough, we export the ore, we export the rough, and then buy it back in a higher price as finished goods. It could be either in jewellery, it could be in smartphones, it could be in computers, it could be in any other form that can be utilised. And that pattern has had us broken because we are just enjoying a specific piece in the value chain while the value chain is vast. And it’s not that that pattern has not been broken yet. We can see, we can look at what Botswana is doing. Botswana has tried to keep the value within its boundaries and we see the real economic benefit that comes from doing that in-house.
In addition, why beneficiation is an important topic now is because beneficiation does not mean just one smelter. I don’t look at beneficiation as just one cutting house or just one project for photo opportunities. I see it as capturing value at every node of the value chain. The market, the pricing, the provenance, the processing, all together. I’ll give you a simple example. For instance, the ring that I’m wearing here while I’m talking to you right now. This ring has passed through many hands. And I want us to look at value chain or every node of value chain with this example. There was a lady, Mama Fatma, who mined the tanzanite, which is on top of the ring. It was just rough. And there was another guy, Alvin, in a different region who mined the gold that is on this ring. But these two miners have never met. They’re from different sides of the world.
So after someone mined the tanzanite and the gold, someone else came in and designed the ring, that’s an extra layer. They refined the gold and smelted it, that’s a different layer. And then they casted it, that’s another layer. And then someone took the tanzanite and polished it. They designed it. And then there was the third part, the stone-setting. And then it was photographed. So at end of the day, you see the ring that I’m wearing, it has passed through a number of hands, and those nodes are what we should look at. It’s not just one smelter. It’s not just one refinery. It’s not just one cutting house. It’s to look at it from every node of the value chain.
Today, different jurisdictions do it differently. But let’s look at how we can capitalise on the whole value chain, whether it’s from the battery, whether it’s from the jewellery, whether it’s from whichever minerals that we looking at, whether it’s developmental minerals, whatever that is. So it’s not just building one factory alone. I like to call it a series of transformations across the whole value chain.
What are the key ingredients required to build successful processing and refining industries?
When we talk about key ingredients, I would like to put them in the following order. There are four things, and the order matters. First, formalise. Make the value chain traceable from miner to market. You do not add value to a stone that has been smuggled, or you do not add value to a stone that cannot be traced. So first, you need to stop the leak.
After stopping the leak, then you go to the second step, transparent pricing discovery. What do I mean by transparent price discovery? The pricing has to be formal in a competitive market, so that the miner can get the price that the gemstone or the rough gemstone they have mined is worth. And that single move will change the game.
And we can take a look at what happened to Zambian emeralds when Kagem changed the pricing game from what it used to be and to what the world market does. And you can see how it transformed their company earnings, the government earnings, and the overall community development in dollar. So that is be the second thing, transparent price discovery.
The third requirement is reliable stack. This includes reliable power, reliable finance products that are available to people, skills transfer in the industry. Because you can formalise the industry, that’s the one tier, you can have transparent pricing discovery, which is the second layer. But if you don’t proper, reliable, consistent, price-effective and competitively priced power supply and if you don’t have access to the right financial products that will enable the industry to be developed in a particular country or in a particular region, then whatever you formalise and whatever the price mechanism that you put in place, it will not translate to sustainable industry growth.
So that is the third layer: reliable power, patient financing and skills transfer. Developing a robust skill set within the boundaries of a particular country. But, also you can see on that end what Tanzania has done with its gemological centre that it is currently building. Zambia is also a very good example, making a very good move with its lapidary centre in Ndola. I’ve been there in Ndola. They’re doing amazing work for the emeralds that come from Kitwe and the nearby regions.
Finally, the fourth thing is: do you build processing just for the sake of building processing, or do you then select a mechanism whereby you can have a regional hub in different areas? Thereby taking advantage of individual countries’ competitive advantage, you don’t have to go through the whole value chain as individual country. You can look at, let’s say, Nigeria. Nigeria producing quite good stones, let’s say, good aquamarines. They can facilitate, they can build a hub, we know. When you want international faceted stones, go to Nigeria because they have a proper lapidary centre. But when you want then to go to, let’s say, a refinery, you can go to Ghana, because Ghana has perfected the art of gold refinery. They have gold, and they’ve been in the industry the longest. Then you have Ghana developing that.
So it becomes a regional initiative when it comes to building and processing, instead of depending on just an individual country. So first you have to formalise, you have the proper transparent price mechanism, and then you build reliable power, reliable financing, and a skills set within the boundaries of the country or the region. And then third, you build regional processing hubs instead of just looking at a country, developing the whole value chain altogether, because that will take time, it will take skills sets, but also, it will take a reasonable amount of investment.
At the upcoming Nigeria Mining Week you are part of a session on “Developing Nigeria’s Gemstone Value Chains.” What will be your message? For example, what models from Tanzania and Zambia can Nigeria follow to build a competitive lapidary and polishing industry?
Nigeria is sitting on world-class rough tourmalines, they are my favourite. In Plateau State, they have some of the finest tourmalines in the world. They come from Nigeria, and yet, most of the value walks out the door. The cuts, the polishing, the designing, most of those things are happening in Bangkok, in Jaipur, while Nigeria just keeps the fractions. But I’ve also worked with amazing designers from Nigeria. But why is it that the amazing Paraibas are not valued in Nigeria? That’s a different question.
So, we look at two neighbours who move together, for this case that is Tanzania and Zambia. Tanzania took a sovereign route with tanzanite. Currently, we are the sole processors of the famous tanzanite. So what we did as a country, we secured the mining area first. Tanzanite is found in only one specific area in Tanzania. You don’t find tanzanite all across Tanzania. So what the government did is to secure that mining area. And then it required that the tanzanite that is mined in Tanzania to be value added in Tanzania. So they put a quota for specific size of Tanzanites. I think less than two grams can then leave the country. Above two grams, have to be value added in Tanzania and then certified here at home before they leave to elsewhere they are heading. That’s for Tanzania.
Zambia took a different route. Zambia took the market route with emeralds. They did a transparent auction, mostly with Kagem. So what most countries do, they mine the rough and then they sell the rough in their countries with the price that they decide, as a country or as a seller or as a buyer. But the transparent auction route that they took, is taking emeralds to the world and then they let the world decide the price of the emeralds. So auctioning it is transparent, but also, the world bids for the real price. On top of that, they also added training to it, they trained their own cutters, their own lapidaries and so on. These are different routes that these two governments have taken, but they provide good advantages to the countries on how to propel what they have in the ground.
Actually my message to Nigeria is, do not leapfrog straight to cutting houses. You can just find a way of having fixed steps before you leapfrog. What can that look like? One: formalisation, two: security and provenance. So if everyone knows this Paraiba comes from Plateau in Nigeria, it has to be that way. Formalise that, and then create a security around that and market the provenance for that. And then sequence it to marketing, traceability and formal markets.
In Tanzania, we have mineral buying centres and mineral markets across different mining regions. We have more than 100 buying centres. In such buying centres, these are the specific areas where miners can go and sell their gemstones. They get daily prices for those gemstones or their minerals, whatever minerals that are there. They have daily updates. You have banking institutions there. You have the revenue authority there. You have the geologists. You have all the experts under one roof. Nigeria can also use that route, creating traceability and formal markets.
And then you go to skills, and in the skills part, you then have competitive cutting, and then you can have jewellery clustered as a third pillar. And then lastly, branding. Because I think as African countries, most of us have stayed behind when it comes to branding our minerals. Whether it’s diamonds from Botswana, whether it’s tanzanite from Tanzania, whether it’s Paraiba tourmalines from Nigeria; we have shrunk away from branding it and owning our narrative. So that would be the last pillar, because traceability, access to market, and owning your story then brings out the value that otherwise you could just miss it and have it enjoyed elsewhere in the world.
You are also par of a discussion on “The Role of Women in Building Responsible Sustainable Mining Projects.” Do you think women play a special role in strengthening ESG performance, especially in community engagement, environmental management and governance?
Let me just push back a little bit on the question itself. And these are my reasons. Women do not strengthen ESG because we are somehow naturally caring. I want to put it in such a manner that I don’t want it to put women in a soft corner of this industry. However, we strengthen it because we are already there. We are already in the value chain, be it as miners, be it as service providers, be it as mineral traders, be it as value addition experts, be it as mining professionals. We strengthen it by being in it, by being in the mining industry.
And we are in the industry at the point where environment, social and governance is either won or lost. That is in the community, in the informal supply chains, in the household economy. All around the mines, women are there. So the answer is not to have women to do the caring work. Because most would think when you have women in the sector, that’s where they sit. But it’s to put women in positions of power: to put women in procurement, in governance, in decision-making themselves, in those positions where decisions are made. Do that when government or institutions find a way of doing that, then they’re bettering their risks, also bettering their projects.