Walkabout Resources is confident it will soon have a key mining licence in hand for its “Lindi” Tanzanian graphite project as uncertainty over government licensing eases in the African nation.

The granting of the mining licence was “imminent”, director Allan Mulligan told Stockhead on the sidelines of the Africa Down Under conference in Perth, WA.

Several regulatory moves by the Tanzania government in the past couple of years 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.

“Our view is that the regulatory uncertainty is now over,” Mr Mulligan said.

“There are of course some unknowns still, but we’ve never considered them as deal breakers and we’re sure that the industry will work through them.

“We still have other projects in the country and we intend to develop them. Whether we will look at other commodities depends on how those commodities fit in under the new regulations.”

Bill Witham, head of the Australia-Africa Minerals & Energy Group (AAMEG), told Stockhead it looks as if there is a “thawing in some of the issues” in Tanzania.

“Everyone is getting much more positive and seeing the machinery of government moving again,” he said.

Still a way to go

But there are still some issues holding back the sector and a pressing need for the government to settle its drawn-out dispute with Canadian gold major Barrick Gold and its 63.9 percent-owned subsidiary Acacia Mining, which has three operating gold mines in Tanzania.

“We believe there’s an end in sight to the government and the Barrick/Acacia negotiation,” Mr Witham said.

“I think we still feel once that is resolved with Acacia and the government, and maybe Acacia being sold to another party, we will see the government then moving forward and progressing a lot of these projects that are ready to be developed.”

AAMEG 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,” Mr Witham explained.

“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.”

High-value graphite 

Walkabout is aiming to start commissioning its flagship Lindi Jumbo graphite project by mid-next year.

The company needs the mining licence to secure the remaining funding and start commissioning early works for the project.

Walkabout plans to supply about 25 per cent of its graphite from Lindi Jumbo to the battery market with the rest to supply high-value markets like expandable graphite.

Demand for graphite is primarily driven by the steel market, but the ever increasing growth in the lithium-ion battery industry is driving demand for both natural flake graphite and synthetic graphite.

Graphite’s qualities as a fire suppressant — particularly in building materials — is also driving demand.

Kibaran Resources (ASX:KNL), meanwhile, met with the head of the mining new commission this week.

The company is developing its 60,000-tonne-per-annum Epanko graphite project in Tanzania.

Earlier in August Kibaran proved it can produce spherical battery grade graphite from other miners’ graphite – a move it labelled as a “major breakthrough”.

Spherical graphite, processed from natural or fine flake graphite, is used in the anodes of lithium-ion batteries.