The banks are again opening their doors to Aussie miners in Tanzania
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The money is starting to flow again for Australian explorers with projects in Tanzania.
Bill Witham, CEO of the Australia-Africa Minerals & Energy Group (AAMEG), told Stockhead that AAMEG’s members have been very active in Tanzania and are reporting progress in negotiating investments.
“Things are definitely a lot more positive now than a year ago, and we hope to see some major investment decisions shortly,” he said.
Several regulatory moves by the 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 2017, 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.
AAMEG has been working with the Tanzanian government to iron out the issues surrounding its changes to the Mining Act.
Among its members are companies like mineral sands explorer Strandline Resources (ASX:STA), precious and base metals explorer Tanga Resources (ASX:TRL), and graphite explorers Walkabout Resources (ASX:WKT) and Graphex Mining (ASX:GPX).
There are 18 ASX-listed companies with resources projects in Tanzania. There were more, but a number have exited over the difficult conditions.
Here’s a list of ASX stocks with projects in Tanzania, courtesy of leading ASX data provider MakCorp
Scroll or swipe for full table
|ASX CODE||COMPANY||COMMODITY||MARKET CAP||PRICE APRIL 2||1-YEAR % RETURN|
|WKT||WALKABOUT RESOURCES LTD||GRAPHITE||47158712||0.17||74|
|IEC||INTRA ENERGY CORP LTD||COAL||7754480.5||0.02||54|
|AGG||ANGLOGOLD ASHANTI LTD-CDI||GOLD||7646605312||3.56||49|
|BKT||BLACK ROCK MINING LTD||GRAPHITE||36304152||0.062||27|
|CXX||CRADLE RESOURCES LTD||NIOBIUM||17572478||0.093||-5|
|PM8||PENSANA METALS LTD||GOLD||21818702||0.019||-5|
|STA||STRANDLINE RESOURCES LTD||MINERAL SANDS||29503474||0.087||-17|
|IDA||INDIANA RESOURCES LTD||NICKEL||4875764.5||0.046||-18|
|KNL||KIBARAN RESOURCES LTD||GRAPHITE||28193096||0.1||-23|
|GPX||GRAPHEX MINING LTD||GRAPHITE||17900626||0.21||-31|
|PEK||PEAK RESOURCES LTD||RARE EARTHS||24776932||0.031||-35|
|MNS||MAGNIS ENERGY TECHNOLOGIES L||GRAPHITE||165006720||0.275||-37|
|VRC||VOLT RESOURCES LTD||GRAPHITE||30565042||0.021||-46|
|BUY||BOUNTY OIL & GAS NL||GAS||2860203||0.003||-50|
|TRL||TANGA RESOURCES LTD||GOLD||3182568.75||0.0025||-73|
|LIN||LINDIAN RESOURCES (Suspended since Nov 1)||GOLD||3700000||0.019||35|
In February, new local content regulations were handed down by the Tanzanian government relaxing local company and financial institution ownership requirements.
Gold major Barrick Gold also announced that it had reached an agreement with the government to resolve a dispute between its 63.9 per cent-owned subsidiary Acacia Mining and the government.
In March 2017, Tanzania put in place an export ban on gold and copper concentrate exports, which Acacia says impacts around 50 per cent of its combined production at the Bulyanhulu and Buzwagi mines.
With the relaxed local ownership regulations and the end to the Barrick Gold dispute, several positive announcements have emerged in the past week that indicate things are finally moving forward.
Graphite explorer Kibaran Resources (ASX:KNL) revealed on Monday that after an 18-month hiatus, Germany’s KfW IPEX-Bank had now agreed to arrange a senior debt funding facility for the company’s Epanko project.
Managing director Andrew Spinks told Stockhead the mandate restarts the debt financing process from where it stalled in 2017.
At the time KfW had agreed to cover a German government loan guarantee up to $US40m ($56.4m).
Kibaran said the mining investment climate in Tanzania continued to improve and there was increasing confidence among international banks that the remaining regulatory aspects impeding new mine financing arrangements would be satisfactorily resolved.
Strandline revealed in early January that Nedbank CIB had agreed to act as lead arranger and underwriter of a five-year $US26m loan for its Fungoni mineral sands project.
“Financiers definitely have a more favourable view as they have been involved in many of the discussions directly,” AAMEG’s Witham said.
“International private equity, funds, banks, insurers and other agencies have been very active behind the scenes in positive discussions with various Tanzanian government entities, outlining minimum requirements that would allow international financing of resources projects to take place.
“This has given increased confidence to project developers in Tanzania after recent amendments of laws in the mining, natural resources and investment were clarified.”
Fellow graphite explorer Walkabout, meanwhile, has locked in its first ever offtake deal for its Lindi Jumbo project.
The agreement is for the supply of up to 50 per cent of planned annual production to Chinese expandable graphite producer Inner Mongolia Qianxin Graphite for the first three years.
When treated with acid and heat, graphite flakes split apart and increase in volume by up to 300 times.
This “expandable graphite” can be pressed into sheets and used for heat and fire protection in applications ranging from building materials to consumer electronics and fuel cells.
Walkabout will supply Inner Mongolia Qianxin Graphite with up to 20,000 tonnes each year of its flake graphite.
“It’s clear that end-users and upgrade facilities who have recognised our premium product, can now see a more definite timeline to production,” executive chairman Trevor Benson said.
“Securing the sale of up to 50 per cent of planned production also reduces financing risk.”
Walkabout said interest from potential buyers is high and the company is in further advanced off-take negotiations.