Tanzanite producer Richland Resources (LON:RLD) said today it needed help to help tackle a growing problem of illegal mining in Tanzania.
Because of the aggressive nature of the illegal miners, it said it needs government and police assistance and a task force set up to tackle the problem.
Earlier in the year Richland reported it had seen a significant increase in the level of illegal mining, which was affecting its operations and also sending a large amount of tanzanite to the illicit market.
The group also revealed today that the Tanzanian Revenue Authority had extended an audit to include prior years dating back to 2004.
Ed Nealon, Richland’s chairman said the company was “very concerned” about certain issues currently facing the company in Tanzania.
In October, Richland was banned from exporting after Tanzania’s mining ministry claimed it owed an additional US$1.73 mln in royalties for the period 2004-2008, though the ban was lifted temporarily two weeks ago.
Richland strongly disputes the claims.
Ed Nealon added “Having contributed over US$20 million to the Tanzanian tax base to date, the implementation of these audits and the receipt of claims for additional charges as well as the ongoing illegal mining activities in our mining area represent significant challenges to the company going forward. “
“The company is appealing to the highest levels of Government, to ensure that foreign investments in Tanzania are protected, that the country's laws against theft and violence be enforced and that widespread rumours of impending nationalisation are unfounded."
Richland added tanzanite production in the three months to September totalled 698,902 carats against 573,771 carats a year earlier.
The average grade achieved was 97 carats per tonne (53 carats for Q3 2011) generating US$2.6 million in sales during quarter.
Due to the export ban, material that was cut, polished and prepared for sales export in September had to be re-invoiced and will be reflected under fourth quarter sales, Richland said.