The Mining Sector Contributes Approximately 2.3% to Annual GDP

Wanzagi · 2011-04-01T17:42:54+00:00

DUBLIN--(BUSINESS WIRE)--Research and Markets (Market Research Reports - Research and Markets - Search) has announced the addition of the "Tanzania Mining Report Q1 2011" report to their offering. Tanzania Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Tanzania's mining industry. Atomic unveils BFS for Mbalawala In September 2010, Atomic Resources announced the results of its bankable feasibility study (BFS) for the Mbalawala coal project, located within the Ngaka coal field. This study assumed capital expenditure on the project of AUD205mn to develop a conventional open-cast pit. Atomic is developing the project in a joint venture (JV) with the National Development Corporation of Tanzania, known as Tancoal Energy. The BFS states that Mbalawala has a JORC-compliant mineable resource of 40mn tons of coal and that the project could support a production rate of around 1.5mn tonnes per annum (tpa) for a mine life of 25 years. The BFC also upgraded the combined coal resource of the Mbalawala block by 18%, from 212mn tonnes to 251mn tonnes. At the same time, Atomic has identified an exploration target range of between 160-320mn tonnes for its Mbuyura and Mkapa blocks, which remain relatively underexplored. We have long held the view that coal should become one of the fastest-growing mining sub-sectors in Tanzania over the coming years, as the country looks to coal-fired power stations to offset an energy shortage that is holding back its development. The country could also be in a position to export coal in the future. New Mining Act Passed In April 2010 Tanzania passed long-awaited changes to its 1998 Mining Act. The main changes are: an increase in the royalty rate levied on precious and base metals from 3%, to 4%; an increase in the royalty rate levied on diamonds from 5% to 6%, with a flat rate of 7% for uranium and a standard 3% for any other minerals; the requirement that the government hold a stake in all future mining projects (the amount to be determined on a case-by-case basis); and the view that all mining companies operating in Tanzania should be required to list on the local stock exchange (although it is unclear whether this last point is legally enforceable by the Act). The revised Mining Act 2010 also bans the issuing of any new gemstone mining licences to foreign companies and calls for the government to set aside specific areas for artisanal miners to operate in. Initial reaction to the new Mining Act has been negative, with several mining companies reportedly issuing a statement through the Tanzania Chamber of Minerals and Energy, describing the legislation as distorted and warning that it could erode investor confidence. There has also been concern expressed that the new Mining Act does not go far enough in setting a clear long-term policy framework for the sector. In the authors view, the author believes that the clear long-term potential of the Tanzanian mining sector should outweigh any short-term blow to confidence as a result of these legislative changes. Indeed, it can be argued that Tanzania is only following a similar course of action to that seen in other African countries of late (such as Ghana) in seeking to raise royalty rates in order to increase their share of their nations mineral wealth. As such, BMI maintains a positive outlook on Tanzanias mining sector in Q111. Research and Markets: Tanzania Mining Report Q1 2011: The Mining Sector Contributes Approximately 2.3% to Annual GDP, but the Government Wishes to Expand this to 10% by 2025 | Business Wire

Thread starter Wanzagi
Start date Apr 1, 2011

Wanzagi

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The Mining Sector Contributes Approximately 2.3% to Annual GDP

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