By Sunday Citizen Correspondent  A foreign investor in the mining industry has dispelled fears that Tanzania’s new mining law would drive away investors.  

Aim-listed Kibo Mining chairperson Christian Schaffalitzky maintained that the country remained a “highly attractive” mineral exploration destination. He acknowledged that new provisions to the Mining Act were causing some concern for local and foreign investors.   Schaffalitzky was quoted this week by South Africa’s Mining Weekly as assuring shareholders in the gold and nickel exploration company that Tanzania would remain fairly attractive and play a key role in the mining sector.

   Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry.  “While these changes to the Mining Act have been considered by the government for some time, the speed at which they are now being implemented has taken the industry by surprise,” commented Schaffalitzky.  

However, he pointed out that there were some positives, noting that the new provisions supported more efficient mineral licence administration, fiscal stability over mine life cycles and greater representation by industry representatives on the government's Mining Advisory Board.  “Overall, I believe that Tanzania remains a highly attractive mineral exploration destination due to its proven mineral resource potential and benign political climate and that changes now being implemented are broadly in line with those applied in many other African countries,” he said.  Kibo, which listed on the Aim in April, had a number of development projects in Tanzania – the Luhala, the Itetemia, the Haneti and the Morogoro projects – all of which were at different stages of development.

 Site preparation for a drilling programme at the Luhala gold project was under way, with a contractor having been appointed to start drilling at the Kisunge prospect in July.  Further, the company was commissioning a scoping study on the Itetemia gold project.  The exploration company was also awaiting the expedited issuing of licences from the Tanzanian Ministry of Energy and Minerals for its Haneti gold and nickel project, before it can restart exploration.

 Exploration surveys would also be undertaken at the Morogoro gold project in coming months.  Some of the provisions in the new law included an increase in the royalty rate from 3 per cent to 4 per cent for metallic minerals and an increase from 3 per cent to 5 per cent for uranium.  Henceforth, the royalty would also be calculated on gross mining revenues with no allowance for post mining refining or smelting related costs.  Further, it highlighted that the government would also have the right to negotiate a free-carried interest in any mining development project on which more than $100-million in capital expenditure is invested.  Ends - Patty

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