Strandline isn’t hopping out of Tanzania despite permit delays
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While some Aussie miners have exited Tanzania due to delays in permits and legislative uncertainty, Strandline Resources has no problems declaring its commitment to the east African country.
Last July the local 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 half of mining companies under some conditions.
Junior gold player Manas Resources (ASX:MSR) revealed last week that it had backed out of a project a year after striking the deal because it was still no closer to completing the transfer of licences due to restrictions in place in Tanzania.
But mineral sands miner Strandline Resources (ASX:STA) looks to be staying in Tanzania for potentially the next 40 years, according to managing director Luke Graham.
“For me it’s short-term delay for long-term improvement in the sector,” he told investors at the Resources Rising Stars conference in Queensland’s Gold Coast.
“We can see ourselves in Tanzania for two to three, maybe four decades and we’re happy it’s happening now rather than later.”
Strandline is still waiting on the mining licence for its Fungoni project.
The newly appointed mining commission has now reportedly approved 7000 mining licences.
“That’s a bit of a long time coming for me, but it’s really only about nine months after Tanzania brought in probably the well overdue mining reform in the sector,” Mr Graham said.
Mr Graham told Stockhead last month that Strandline was expected to be one of the early applications processed under the new regime.
Strandline’s $US30 million ($39.8 million) Fungoni project, which is located about 25km from Dar es Salaam port, is expected to produce 2 million tonnes each year of heavy mineral sands including ilmenite, rutile and zircon.
Ilmenite is the main source of titanium dioxide, which is used in paints, fabrics, plastics, paper, sunscreen, food and cosmetics.
Zircon, meanwhile, has a high melting point, making it ideal for use in engines, electronics, spacecraft and the ceramics industry.
Rutile is also used in the manufacture of ceramics, as a pigment, and for the production of titanium metal.
A definitive feasibility study released in October last year estimated the six-year mine would deliver total revenue of $US168 million, with payback in less than three years.
Once Strandline has the mining licence in hand, it expects to spend around two to three months locking down debt and equity funding for the project.