Promising signs in Tanzania as explorers meet with new mining minister
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The situation in Tanzania is looking a bit more promising for Australian juniors with resources projects in the East African country, with small signs of government support.
Tanzania stunned ASX-listed resource plays in July with sweeping changes to its Mining Act, including compulsory 16 per cent government ownership of mining companies.
However, it looks as if the dust is beginning to settle with the appointment of a new minister of minerals, Angellah Kairuki, who appears to be more receptive to opening up Tanzania to foreign investment.
“Early on there was some criticism and concern from reporters that this is sort of going like a Mugabe-style regime, but this is very much an anti-corrupt government moving quite swiftly,” Kibaran Resources managing director Andrew Spinks told Stockhead.
“Obviously the way the government moved with the legislative changes so swiftly has created significant concern from an investment community. However, I think Tanzanian’s history as a safe East African investment community will resume.”
Kibaran (ASX:KNL), which is developing the Epanko graphite project, last week met with government officials and representatives of export financier KfW IPEX-Bank to discuss aspects of the new legislation that require clarity in terms of international banking requirements for debt financing of projects.
The company said the meeting was “encouraging” with the minister providing guidance on the way forward for talks between the government, Kibaran and its prospective lenders.
Tanzania’s High Commissioner to Japan, Australia and South Korea, Mathias Chikawe, has also pledged the government’s support for the Epanko project, Kibaran noted.
The company had around $1.5 million in the bank at the end of the September quarter and is in talks with potential lenders to debt fund the $88.9 million mine, which is expected to produce 60,000 tonnes of graphite each year.
Meanwhile, Magnis Resources (ASX:MNS) has also had “productive” meetings with Tanzanian government officials in the past fortnight regarding the development of its Nachu graphite mine.
However, it is “early days” and the company needs more clarity on the changes to the Mining Act, chairman Frank Poullas said.
“I suppose, whether it’s ourselves or our peers, most of us have to sort of pretty much sit tight and wait and see what comes out in the next month or so,” he told Stockhead.
Tanzania is a “wonderfully mineral rich country and the potential for the country still remains”, Indiana Resources chairperson Bronwyn Barnes told Stockhead last week.
“It is only a short-term regulatory environmental issue that’s actually preventing everybody from progressing as quickly as we would have liked,” she said.
Indiana (ASX:IDA) has gold and nickel projects in Tanzania. The company is focused on progressing activities in the country, but is also considering new acquisitions as well as a potential joint venture partnership or sale of its Ntaka Hill nickel project.
New regulations to the recently amended legislation and the structure of the mining code are expected to be released before the end of the year.