These Aussie miners think there’s still an elephant-size opportunity in Tanzania
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Tanzania’s new mining commission appears to be sparking hope for Aussie miners after a lengthy period of uncertainty.
“Since early May, green shoots of progress are emerging, with some member companies, including Black Rock Mining (ASX:BKT), shoring up their ongoing economic relationship with the government,” said Bill Witham, head of the Australia-Africa Minerals & Energy Group (AAMEG).
“By using the local railway to transport its ore, they have been able to expedite their second bulk sample of 530 tonnes from the Mahenge flake graphite project to the port of Dar es Salaam.
“While there is still a long way to go, it’s pleasing to see existing contracts reignite to provide fresh confidence in the mining industry in Tanzania.”
>> Scroll down for a list of ASX stocks with projects in Tanzania.
Eleven of the 15 ASX-listed companies with projects in Tanzania have seen their share price battered over the past 12 months.
Mineral sands miner Strandline Resources (ASX:STA) witnessed the biggest decline in its share price of 86 per cent to trade at 13c.
Once considered an investment-friendly country, the east-African nation stunned ASX resource plays in July last year with sweeping changes to its Mining Act, including compulsory 16 per cent government ownership of mining companies.
Since then AAMEG has been working with the Tanzanian government to minimise the impact for Australian miners and future investment.
“With the establishment of a new Tanzanian mining commission last month and its appointment of a chairman and commissioners, the ability to issue mining licences has been reinstated,” Mr Witham noted.
“AAMEG welcomes the establishment of this governing body, which will regulate the effective implementation of the provisions of the Mining Act, as a positive sign of progress.”
Here’s a list of ASX stocks with exposure to Tanzania.
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.
Manas’s share price has actually gained 67 per cent over the past year to trade at 0.5c.
Meanwhile, Indiana Resources (ASX:IDA) has put its Ntaka Hill nickel project on the backburner and picked up some prospective gold ground in Mali.
The company’s share price has slipped nearly 14 per cent over the past year to trade around 7.5c.
But Strandline looks to be staying put despite it bearing the brunt of the sell-down over the past year.
“For me it’s short-term delay for long-term improvement in the sector,” managing director Luke Graham said this week.
“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 mineral sands project.
The newly appointed mining commission has reportedly so far approved around 7000 mining licences.
Mr Graham told Stockhead last month that Strandline was expected to be one of the early applications processed under the new regime.
Junior emerging graphite producer Magnis Resources (ASX:MNS) had a win earlier this year, with the Tanzanian government agreeing to allow the company to advance its Nachu project.
The company successfully negotiated changes to the Special Economic Zone (SEZ) licence granted to subsidiary Magnis Technologies Tanzania (MTT).
Under the agreement, Magnis’ operation will be treated as an offshore entity, which will help to mitigate the concerns regarding investment following last year’s legislative changes.
Magnis’ share price, however, is down 29 per cent over the past year at 43c.