Samuel K. Gyan (Kiki): African Assay Laboratories (Tanzania) Ltd (“SGS”)

What is the history of SGS in Tanzania?

SKG: SGS was incorporated in Tanzania 50 years ago. It is the leading inspection, verification, testing and certification company in Tanzania with more than 300 permanent employees operating in Dar Es Salaam, Tanga, Mtwara, Mwanza, and the Mine-sites spread throughout the Lake-Zone area, and any other location where need arises.

In 1997, we started a geochemical laboratory in Mwanza, SGS Minerals Services’ laboratory, offering geochemical analysis to meet mineral testing needs in Tanzania. Subsequently, we implemented dedicated onsite laboratory operations for the Tanzania’s Golden Pride Mine, Geita Gold Mine, Bulyanhulu Gold Mine, Tulawaka Mine, North Mara Mine and recently the Buzwagi Gold Mine in a space of 10 years. All the analyses for exploration companies were done at our commercial laboratory in Mwanza. And in 2003, SGS also set up an environmental testing laboratory in Mwanza, supporting all these mines by testing the quality of water and effluents they release in the surrounding environment. The various mines Environmental Departments are responsible for the mines complying with the National Environmental Management Council requirements.

We are part of the SGS global laboratory network that provides first-class geochemical analysis, including ICP-AES analysis, to mining and exploration companies throughout Africa and around the world.

Our Mwanza commercial laboratory, an ISO/IEC 10725 accredited facility, was developed to serve Tanzania, and to provide access to our extensive mineral testing services worldwide. All our labs use the same global testing methods, analytical codes, and sampling preparation techniques to ensure uniform excellence for you.

Through our Mwanza technicians, and those at our centers of excellence in South Africa and Canada, we support your exploration and mining efforts as a strategic partner and an independent analytical advisor. We act as your expert technical resource to facilitate the success of your mineral program.

How important is mining to SGS in Tanzania?

SKG: Mining activities contribute a significant chunk to SGS’ operations in Tanzania, with services to other sectors in the economy evenly distributed between our other business lines. We have over 500 employees working in the country, with two-thirds employed under African Assay Laboratories, our spinoff company that serves the mining sector in Tanzania and the surrounding East and Central Africa neighbours. Six out of 10 SGS business lines are available in Tanzania namely:

  • Minerals Service
  • Environmental Service
  • Oil, Gas & Chemicals Service
  • Agricultural Service
  • Systems and Services Certification Service
  • Government & Institutional Service

Beginning of this year the Government & Institutional Service was fully introduced to consolidate our goal of diversifying our operations in Tanzania, and this will be an important business line going forward, eventually complimenting our Minerals business line.

How important is Tanzania to SGS regionally?

SKG: Tanzania is one of the East African countries with the potential to grow. Its economy has been expanding at 6-7% over the last couple of years and even the Global Financial Crisis only reduced growth to 5%. The Oil and Gas sector – already serviced by one of our business lines – will expand rapidly, opening up the possibility for SGS to bring in its upstream and industrial services into the country. These factors provide healthy economic outlook for the country and therefore Tanzania sits well with our overall strategy.

How efficient and stable do you consider Tanzania’s regulatory framework for mineral inspection and verification?

SKG: Tanzania’s mining regulatory framework was updated by the coming into place of the new mining code in 2010. The review was in line with the government’s objective of increasing revenue out of the mining industry and increasing royalties achieved that objective. We still see the regulatory framework as stable, although investors will have to see the government’s point of view and work with it. The country has been politically stable, and reasonably so economically too.

What are some of the challenges that SGS faces by operating from Tanzania?

SKG: Infrastructure is the big challenge we face in Tanzania – our turnaround times are important to mining companies. Power is a big challenge – SGS has been running generators over the last 18 months, increasing our operational and overhead costs. Our business also depends on having the right people occupying the positions we need to deliver quality services. Skills are a challenge: even though Tanzania has been mining since the late 1990s, and has set up a mining school, progress has been slow. The school focuses only on low-level technical skills, but we need chemical and metallurgical engineers to run our laboratories at high level; these are not readily available and so we have to scout or head hunt around the world. Most of our laboratory managers are Ghanaian, South African, Filipino or Zimbabwean but we do have a very few trained Tanzanians that we are using outside the country.

Which are your most popular services with the mining community?

SKG: The Mwanza laboratory maintains a broad suite of analytical techniques to suit clients mineral testing requirements, including Inductively Coupled Plasma-Atomic Emission Spectroscopy (ICP-AES). Our facility is equipped with the same standard quality control procedures that exist throughout our network of over 110 laboratories. Our technicians maintain high standards of quality and procedural excellence to ensure the data is accurate, repeatable, and timely. Mwanza’s on-site analytical capabilities include:

  • Exploration and geochemistry assaying and analysis
  • Sample preparation
  • Fire assay ICP-AES (Au)
  • Acid digest (Au)
  • Accelerated cyanide leach (Au)
  • Cyanide BLEG leach analyses (Au)
  • Atomic absorption spectrometry (AAS) for some base metals.
  • ICP-AES multi-element packages (Table 1)
  • On-site laboratory
  • Precious metals assaying and analysis
  • Check work
  • Environmental analysis

Additionally, the Mwanza lab also functions as a complete sample preparation laboratory, reducing all samples to a pulp for ease of transportation. Samples can be shipped to any of our analytical centers of excellence located globally including Johannesburg, South Africa, and Toronto, Canada. Both facilities are accredited to ISO/IEC 17025 for specific registered tests.

What is the average purity found in drilling samples here?

SKG: Gold offers one of the best areas for investment. The drilling samples taken from ores or concessions vary in their purity, which normally ranges between nothing and, for example, 20 g/t. Sometimes higher concentrations are recorded depending on the gold distribution in the sample(s). Gold exploration has grown rapidly during the 1990’s using modern technology and refined models. Exploration is a difficult process and so before a concession is made bankable, lots of samples must be collected and assayed several times in various parts of the concession for the necessary evaluation. The current perceived opportunities range from former mines in the Archaean Greenstone belts around Lake Victoria. Several “world class” gold deposits have already been discovered in the Lake Victoria Goldfields and are at different stages of development.

Have you seen a recent increase in competition for your mining services in Tanzania? What differentiates SGS from its peers?

SKG: Today just SGS and ALS Chemex laboratories are operating from Tanzania. I think competitors are welcome to enter as it’s a free market, and we have anticipated seeing one or two more, but our quality services to the mining industry have been consistently good enough for the last 10 years to give us the leading share in the market. SGS delivers the dedicated laboratory services better with good turnaround times and reliable quality than its competitors, which really differentiates us. We have set up the dedicated laboratories for all six major mines in the country, which demonstrates that our competencies and ability to deliver these services to perfection.

Where would you like to see SGS positioned on the market in five to six years time?

SKG: SGS will have to maintain and consolidate its leadership position in the mineral services. We do see some level of saturation in Tanzania’s mining production. The country used to produce a new mine every year, but this has slowed down since 2009, which signals to us that rate has slowed down and we would have to live on the back of the current mines life of mine exploration and production work.

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