MINING companies in Tanzania are anxiously assessing potential impact of new developments in Tanzania where Members of Parliament approved proposed legislation to govern the natural resources sector.
The bills, which will enable the government to renegotiate contracts with mining and energy companies, are part of a major overhaul of the mining and energy sectors to provide the state with a greater share of revenue from the country’s natural resources.
Shanta Gold Limited holds three projects in Tanzania, New Luika, Nkuluwisi and Singida, as well as exporation licences over a number of additional properties in the country, announced yesterday it was seeking advice on legislation, assessing potential impact.
Shanta Gold Limited is gold mining company, registered in Guernsey in the Channel Islands and is listed on AIM on the London Stock Exchange. Edenville Energy PLC said it was monitoring the situation in regards to its Rukwa coal project in the country.
It stressed that it had recently "gone through a comprehensive and complete permitting process for the project with both state and local government organisations, along with the local community, and has received widespread support to develop the project to provide both energy and employment opportunities to the people of Tanzania".
Another mining company, Graphex Mining Ltd has been granted a trading halt by the Australian Stock Exchange on Monday as lawmakers in Tanzania were debating the new changes in the proposed bills.
Graphex requested the halt pending draft changes to mining legislation proposed by the government. The halt was expected to remain in place until the opening of trade yesterday, or earlier if an announcement is made to the market.
Anglogold Ashanti said it would, in context of its existing mine development agreement, analyse the new changes in the laws. AngloGold Ashanti has one wholly owned and managed operation in Tanzania, Geita, the largest single gold mining operation within the group.
Major overhaul of the mining industry began in March, when the government banned export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel and silver and established two special committees to examine the extent, types and values of minerals contained in mineral sand in containers for export in various locations in the country.
The committees found the value of minerals within concentrates in containers at the port city of Dar es Salaam was more than 10 times the amount declared by Acacia. It also accused the largest mining company of operating illegally.
The mining company refuted the committee's findings, saying that if they were correct it would imply that Acacia "is the world’s third largest gold miner" and "produces more gold from just three mines than companies like AngloGold Ashanti from 19 mines, Goldcorp from 11 mines, and Kinross from their 9 mines."
However, last month Barrick Gold Chairman, John Thornton flew into the country to meet President John Magufuli where they reached agreement for negotiation to resolve the dispute.
Barrick Gold holds majority stake in Acacia Mining. But in another twist of event, Acacia Mining said on Tuesday that notices of arbitration were served to the government on behalf of companies that own its Bulyanhulu and Buzwagi mines, which have been hit by an export ban.