More good news for Tanzania stocks as Kibaran wins support for graphite project
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Kibaran Resources is the latest ASX-listed junior explorer to get good news from the Tanzanian government.
The graphite explorer (ASX:KNL) has been told its mining licence for a graphite project called “Epanko” in the African nation’s central-east will be renewed for another 10 years.
The news kicked shares up nearly 8 per cent to 16.7c on Wednesday morning.
The renewal of the licence was a major requirement for Kibaran to square aware the debt funding it needs for the 60,000-tonne-per-annum operation.
Kibaran’s news follows the granting of mining licences to two other ASX-listed explorers –Walkabout Resources (ASX:WKT) and Strandline Resources (ASX:STA) – last week.
Several regulatory moves by the Tanzania government created uncertainty for ASX-listed miners active in the east African country and held up the granting of licences.
In July last year, the government introduced amendments to the Tanzanian Mining Act 2010 including potential renegotiation of agreements, a required 16 per cent government ownership of mining projects and the right to acquire up to 50 per cent of mining companies under certain conditions.
But the situation is turning around with the appointment of a new mining minister and mining commission.
The government is now working to get through the massive backlog of mining licences.
The Australia-Africa Minerals & Energy Group is working with the Tanzanian government to iron out the remaining legislative issues.
“There was quite a strong requirement for local content, and not just local content in terms of employment, but in terms of funding, insurance brokers and a restriction on the repatriation of funds out of the country,” Bill Witham, head of AAMEG, told Stockhead last week.
“So we’ve pointed out to them that under IMF rules that if they want foreign investment, foreign investors can’t invest under the current regulations that they’ve proposed.
“They are listening and what we’re doing, we’re actually going back with what we think is best practice in Africa in terms of what other countries do and especially countries that are successful in attracting investment.”
Kibaran’s Epanko project, which has a net present value of US$211 million, has supply agreements already in place with European and Japanese customers.
The project also has debt financing support from German and Australian lenders for its estimated $US89 million pre-production capital cost.
Kibaran is in talks to finalise the remaining requirements of the lenders so the financing and subsequent construction of the Epanko project can go ahead as soon as possible.
Stockhead is seeking comment.