Tanzania says H1 2013 gold output down 12 pct

By Fumbuka Ng'wanakilala DAR ES SALAAM (Reuters) - Gold output in Tanzania, Africa's fourth-largest producer of the precious metal, fell 12 percent in the first half of 2013 from a year earlier, officials said on Friday. Output declined to 569,958 ounces for the six months ended June 30, from 647,637.33 ounces for the same period a year ago, the state-run Tanzania Minerals Audit Agency said in response to questions from Reuters. Australia's Resolute Mining, which owns the Golden Pride mine, and African Barrick Gold's (ABG) Tulawaka gold mine are near the end of their operations, leaving Tanzania with five large-scale gold mines. "The Golden Pride mine used to produce around 200,000 ounces a year, so we will lose that production ... we won't also be able to get the royalties, plus service levy and investment in CSR (corporate social responsibility) programmes," Tanzania's commissioner for minerals, Ally Samaje, told Reuters. He said despite ending its pit mining operations, Resolute Mining was expected to continue processing stockpiled low-grade gold ore until February next year. The Tanzanian government said it plans to take over gold mining activities at Tulawaka when ABG hands over the mine this year. "The State Mining Corporation (STAMICO) is in discussion with Barrick to take over the Tulawaka mine ... it will be much better if STAMICO gets a local partner to continue gold production at Tulawaka after Barrick's exit," Samaje said. "There is still some gold mineralisation at the area and we think we can operate it at a lower cost." Gold production from major mines declined by 3.1 percent in 2012 to 1.25 million ounces from 1.29 million ounces in 2011, according to government figures. Analysts said they expect gold output in east Africa's second-biggest economy to continue its downward trajectory in 2013 as major producers are hard hit by rising costs and falling bullion prices. Gold is the biggest foreign-exchange earner in Tanzania, fetching the country $2.115 billion in 2012, slightly higher than $2.098 billion a year before. In January to June this year, the precious metal earned $859.04 million, from $1.07 billion in the same period of 2012. Samaje said new projects were expected to be commissioned in the next few years to mine nickel, coal, gold, uranium and rare earth metals. "Several major projects are in the pipeline, including Kabanga nickel (a 50/50 joint venture between Barrick Gold Corp and Xstrata Nickel), the Mantra uranium project and a rare earth metals mine in the Mbeya region in Tanzania's southern highlands," he said. Uranium One's Tanzanian unit said last year it hoped to start building its Mkuju River uranium mine in 2013. "African Barrick Gold is also looking at the possibility of developing a new gold mine at its Nyanzaga project," he said.