Over 1,200 mine workers working in Tanzania's two giant gold mines are likely to lose their jobs, following the drastic plummeting of gold prices on the world market, a senior official said on Monday.

"We are very concerned with the gold price trend in the global market," Ally Samaje, acting Commissioner for Minerals in the ministry of Energy and Minerals, said in Arusha soon after presenting a paper on Tanzania's mining challenges at a forum that involved different mining stakeholders from across the African continent.

He cited two mines which are in danger of suspending operations- - North Mara and Buzwagi, both of which are operated by the African Barrick Gold (ABG).

ABG, the biggest investor in Tanzania's mining sector, posted total revenues of 2.32 billion US dollars in 2011 and 2012. Around 91 percent of ABG's total workforce of 5,649 employees comprises Tanzanian nationals, with the company aiming to further reduce its expatriate labor in 2013.

"ABG has already expressed concerns to us on the falling price trend in the world market. But, they are yet to decide whether to continue or suspend mining operations in those two sites," Samaje said.

If the multinational company would opt to suspend business, it is estimated that more than 1,200 workers will be forced to go home for unpaid leave.

"This will have a very negative impact on the country's economy and the well-being of employees working on the two mines," Samaje said. "On our side, we'll lose hefty amount of taxes from the two mines, in terms of royalty and other forms of taxes. Social service providers will also be affected if the company would suspend the operations in the two sites."

"But, we still hope that is not going to happen... and Barrick Gold also are still watching the price trend," he said, attributing the drastic fall of gold price to low demand of the precious metal in the global market.

In 2008, gold was one of the minerals which were not affected by the global economic crisis. Mining contributes 3.5 percent to the GDP of the east African nation and is projected to reach 10 percent by 2025.