News

Tanzania inks joint ventures with mining firms

The Government of Tanzania has signed an agreement with four mining companies to form joint ventures (JV), a move which is meant to set the stage the country to benefit from its natural resources.

The companies born out of the JV – and which are to invest a total of Sh1.755 trillion are; Faru Graphite Corporation, Petra Diamonds Ltd (PDL), Nyati Mineral Sands Ltd and Sotta Mining Corporation Ltd.

According to negotiation team’s chairman, Prof Palamagamba Kabudi, in all companies except the PDL, the government enjoys 16% free-carried interest. For PDL, the government had agreed an issue of shares in the mine’s holding company Williamson Diamonds Ltd (WDL).

Government’s interest

The deal with the London-listed miner will increase the government’s interest to 37% from 25%. This suggests that deal will reduce Petra’s stake in the mine to 63% from 75%. Moreover, the two partners have agreed to an economic benefit ratio of 55% for the government and 45% for Petra.

On the other hand, the government agreed with Faru Graphite Corporation an economic benefit ratio of 52% for the former and 48% for the latter. Speaking at the signing ceremony event President Samia Suluhu Hassan said the signing of the agreement to form JVs is a tangible fruit of the review of minerals laws under the stewardship of the late President, Dr John Magufuli.

Tanzania had passed through major reforms in the mineral sector including the review of its policies and laws before it started to glean its benefits. The Parliament of Tanzania, in a bid to protect the country’s natural resources and the employment opportunities for its citizens, passed a series of legislations in July 2017.

For mining companies, the 2017 Mining Laws introduced a number of new conditions on the way they did business. The main features included a 16% free carried interest for the government and restrictions on the export of raw resources for beneficiation outside Tanzania.

“Our commitment is to create a ground for a win-win situation. We want Tanzanians to benefit from the country’s natural resources that we are blessed by God,” stressed the Head of State.

Leave a Reply

Your email address will not be published.

Related Articles

Back to top button