Writes Leo Odera Omolo
Reports emerging from the Tanzanian commercial City of Dar Es Salaam says that a Chinese firm, Sichuan Hongda Corporation is planning t invest USD 3 million in the Mchuchuma coal and Liganga Iron Ore production in Southern Tanzania.
This will be the first major mining investment by the firm in Tanzania, after it was selected out of 48 international and local companies that bid to develop the two projects.
Other reports emerging from the same source says, the Russian state-owned nuclear holding company, Rosatom has taken over the uranium assets of the Tanzanian based Mantra Resources Ltd for USD 1.15 billion.
Rosatom through its SC Atomredmetzoto ARMZ Uranium Holding Co} subsidiary, will buy the Australian Perth-based company for a USD 8 a share 5.5 per cent premium to its last trading price before the shares were halted prior to the take over announcement on Monday this week.
The coal mining project, in which the Chinese company is involved, will provide the base for industrial and activities and a source for both local industrial uses, as well as for export. It is also expected that the project will influence of infrastructure in the Southern regions of the country.
The chairman of the board of the National Development Corporation {NDC} Chrisant Mzindakaya was quoted widely by the local media houses as saying last week tat Mchuchuma coal project, which is expected to produce 600 megawatts of electricity will supplement the hydropower sources which are currently in use in Tanzania.
“The project will also necessitate the strengthening and building of new power transmissions lines,” said Mzindakaya.
Tanzania is notorious for chronic power rationing largely due to overdependence on hydropower sources.
At the same time the in the of Heavy Industry in the Ministry of Industry, Trade and Marketing Alley Mwakibolwa was also quoted by the media as saying that the Mchuchuma mining area has an estimated 540million metric tones of coal deposits, which is enough to produce electricity for over 100 years. “Once the Mchuchuma project is complete, the power rationing in the country would be something of the past having been resolved permanently.”
Mwakibolwa added the 600 megawatts of power expected will attract investment in other sectors as well.
The Mchuchuma project covers an area of about 141 square kilometers while the Liganga Steel Complex covers 178 square kilometers.
In February last year the NDC shortlisted 25 international and local firms for the Mchuchuma Coal and Liganga Iron Ore concessions. Nine firms were picked from these.
They are BHP Billiton Worldwide Exploration Ltd of South Africa, China Huadian Engineering Company Ltd of the Peoples Republic of China, Nava Bharat {Singapore} Pte Ltd of Singapore, and Rio Tinto Minerals Development Ltd of the United Kingdom.
The other firms were, Sarda Energy and Minerals Ltd of India, Sichuan Hongda Company Ltd of China, STX Corporation of Korea,, Trancoal Energy Ltd/Tata International of Tanzania and the AES Corporation of the United States.
The government of Tanzania also prequalified five firms for the Liganga Iron Ore concessions in which Sarda Energy and Minerals Ltd, Sichuan Hongda Company, STX Corporation, Trancoal Energy Ltd / Tata International Ltd and AES Corporation were shortlisted.
Trancoal’s submission was made alongside Tata International Ltd of India as a joint venture. The Liganga iron ore deposits are located less than 100 kilometers from Trancoal’s Ngaka coal project.
In the Russian’s deal, the agreement will see ARMZ Uranium Holding, a company authorized the State Corporation of Nuclear Energy to supply Russian nuclear industry with raw materials, take over 100 per cent of Mantra Resources Ltd.
Mantra’s core assets are the world-class Mkuju River project in Tanzania, Which is nearing the completion of definitive feasibility study.
The transaction contemplates the fulfilling number of standard requirements, including, specifically, transaction approval by a general shareholder of Mantra Resources Ltd, relevant state authorities and court approval.
The transaction will have to wait the approval from the Australian Foreign Investment Committee and the Tanzanian government cabinet.
Vadim Zhivoc, the Director General of the ARMZ was quoted by the influential weekly the EASTAFRICAN this week as saying that the transaction with Mantra Resources Ltd is a part of ARMZ Uranium Holding strategy on diversifying uranium base of Rosatom a state corporation.
Zhivoc said the agreement allows ARMZ Uranium Holding to extend its portfolio of assets with low uranium production costs as well as to consolidate the leading position of the Rosatom State Corporation among the world natural uranium producers.
“The transaction is realized within the concept of development of uranium. One as for the global platform of ARMZ Uranium Holding’s growth.” he said.
According to Zhivoc, the acquisition proposal provides all Mantra shareholders with the opportunity to realize a cash consideration at a premium valuation.
Buying Mantra will give Rosatom the Mkuju River project in Tanzania and add to the controlling stake in Uranium One that it agreed to buy in June.
Jean Nottier,the CEO of Uranium One said that the Mkuju River in Tanzania ranks among the best uranium development projects in the world.
The Mkuju River Uranium project has the estimated resources of 101.4 million pounds of uranium oxide concentrate about 77 per cent of global mined output last year
Mantra Resources has started definitive feasibility study for the project.The offered price Mantra equates to USD 10.26 per pound {.O.45.kg} concentrate in Mkuju River.
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