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Tanzania miners watch and wait on bid to overturn ore export ban
Mining
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Tanzania-focused explorers are closely watching a deal between the world’s biggest gold miner and the East African nation to settle a six-month dispute over ore exports.
In March, the Tanzanian government banned exports of unprocessed ore to boost its domestic smelting industry.
Barrick Gold — a $20 billion Toronto-listed miner — owns the majority of one of Tanzania’s main gold producers, Acacia Mining.
Last week Barrick negotiated a settlement with Tanzanian president John Magufuli, agreeing to hand over a 16 per cent stake in its local operations, a 50 per cent share of the takings and $300 million towards a disputed tax bill.
London-listed Acacia’s shares — which have lost 70 per cent of their value since March — recovered slightly after the settlement news.
However the shares fell again on Friday after doubts emerged about Acacia’s approval of the deal.
What’s the impact on ASX-listed Tanzania-focused stocks?
News of the deal resulted in share volatility among the 11 or so Tanzanian-focused stocks listed on the Aussie bourse.
| ASX | Company | Commodity | Opening Price 20/10/17 | Closing Price 20/10/17 | % Change |
|---|---|---|---|---|---|
| BKT | Black Rock Mining | Graphite | $0.076 | $0.070 | -7.89% |
| CXX | Cradle Resources | Niobium | $0.120 | $0.140 | 16.67% |
| GPX | Graphex Mining | Graphite | $0.280 | $0.320 | 14.29% |
| IDA | Indiana Resources | Gold and Nickel | $0.077 | $0.077 | 0.00% |
| KNL | Kibaran Resources | Graphite | $0.170 | $0.170 | 0.00% |
| LTR | Liontown Resources | Lithium | $0.013 | $0.013 | 0.00% |
| MNS | Magnis Resources | Graphite | $0.480 | $0.460 | -4.17% |
| ORR | Orecorp Ltd | Gold | $0.150 | $0.190 | 26.67% |
| STA | Strandline Resources | Mineral Sands | $0.005 | $0.005 | 0.00% |
| VRC | Volt Resources | Graphite | $0.026 | $0.026 | 0.00% |
| WKT | Walkabout Resources | Graphite | $0.081 | $0.079 | -2.47% |
OreCorp (ASX:ORR) — a joint venture partner in one of Acacia’s Tanzania projects, Nyanzaga — rose 27 per cent to 19c on Friday. (Although Barrick’s deal with Tanzania doesn’t impact OreCorp’s project.)
“The company continues to monitor developments and will seek advice on the framework once further information is available,” OreCorp told investors.
“Based on the company’s review of the limited information that has been announced, it is not currently possible to predict the potential impacts on the Nyanzaga project.”
OreCorp also owns the a nickel and coper project in Mauritania called Akjoujt South.
Niobium explorer Cradle Resources (ASX:CXX) and graphite play Graphex Mining (ASX:GPX) both improved. Cradle climbed 17 per cent to 14c and Graphex rose 14 per cent to 32c.
Cradle had its proposed $55 million takeover bid by private equity-backed Tremont Investments called off following the Tanzanian government changes. Cradle owns the Panda Hill niobium project. Niobium is used to strengthen alloys such as stainless steel.
Graphite play Black Rock Mining (ASX:BKT) didn’t fare so well, dropping almost 8 per cent to 7c.
Black Rock is developing the biggest high-grade flake graphite resource in Tanzania and the fourth-largest in the world.
Another Tanzanian graphite play Magnis Resources (ASX:MNS) dipped 4 per cent to 46c on Friday.
The company is looking at near-term production at its Nachu project in southeast Tanzania.
