Kahama started to negotiate with the Miners’ Committee, chosen by the miners in a Tanzanian government-supervised election and affiliated with regional and national small-scale miners’ organizations.
In one meeting, a village elder expressed his frustration: “How come KMCL [Kahama] has asked us to vacate? We will not leave, even if the police are called to disperse us. We will kill and be killed, so that the government realizes that this is our right.”
Kahama was worried.
“If we can assume that this village chairman represents people’s views, then we can say that this is somewhat a feeling of a good percentage of [the village of] Kakola,” a company employee reported in a memo on March 26.
The troubles at Bulyanhulu immediately attracted the attention of the highest levels of power in Tanzania. Regional politicians, bureaucrats, even the president and prime minister of Tanzania talked about the eviction of the miners with the Canadian High Commission and top officials from Kahama and Sutton Resources.
By mid-June, the Miners’ Committee was ready to deal. They would accept $5.6 million US in compensation for the mines. They pleaded that they did not want to become “refugees in our own country.” Kahama declared that compensation was the government’s problem. Four days later, they sued the Miners’ Committee.
Late that summer, both sides travelled to Tabora to make their presentations to the High Court.
They then waited for a ruling from presiding High Court Justice Mchome.
They weren’t the only ones waiting. Sutton’s chairman, millionaire James Sinclair, was also growing concerned about the string of setbacks. As the husband of Sutton’s largest single investor—with 18 per cent of the shares owned by his wife—Sinclair had a big interest in the outcome of the case.
But it was about more than just money. From the start of his career, Sinclair has had a deep interest in the gold industry and in Africa. He has written several books on the gold market and mining; he was friends with the president of Tanzania. He also ran Service Assistance International, a charity operating in Tanzania, which is now run by his daughter, Marlene. Sinclair, a devotee of Indian guru Shri Sathya Sai Baba, places high value on personal virtue and morality. He is the model of a capitalist idealist.
Sinclair saw Sutton’s stock price steadily decline. His opinion—as later revealed in documents filed with the BC Securities Commission—was that Sutton was in over its head and needed to partner with a company with African experience.
The Canadian government’s High Commissioner to Tanzania had confidence in the Tanzanian courts. In a September memo to Sutton president Michael Kenyon, she counselled him to trust the courts, noting that Tanzania “does have an independent judiciary.”
On September 29, Justice Mchome proved her correct.
“When this case was filed, I thought it a simple case of the defendants [the small-scale miners] being sued for contravening the Mining Act and tampering with the plaintiff’s [Kahama’s] rights under the Act,” he stated in the ruling. “But when the Written Statement of Defence and Counter Claim was filed, I discovered that this suit was more than that.”
Major issues were at stake.
“I found no provision made for compensation and/or resettlement of the indigenous people,” he ruled. In his view, the issue was one of “constitutional basic rights and duties,” and needed to be referred to a special three-judge panel under the Basic Rights and Duties Enforcement Act of 1994.
In what is perhaps the most consequential part of this story, that panel did not meet in 1995. Nor did it meet in 1996, when the evictions occurred. In fact, to this day it has neither been constituted nor ruled on the matter.
But at the time, the ruling did halt plans to remove the miners. There was also an election going on. It was now a constitutional matter—and the stakes were rising. By October 1995, drilling at Bulyanhulu produced a new, higher reserve estimate of 2.49 million ounces of gold underground, worth more than $750 million.
Click here to read The Investor Rebellion
