Writes Leo Odera Omolo
Information emerging from the Tanzanian capital, Dar Es Salaam, that Russian state-owned nuclear energy firm JSC Atomredumentzoloto [ARMZ} is shelving its plan to acquire the USD 1.16 billion Mkuju River Uranium assets in Southern Tanzania, due to the recent Japanese nuclear plant crisis.
The move comes only a month after the Russian firm had obtained a takeover approval from the Tanzanian government, under the fair Competition Act it had enacted in 2003, as the law regulating the prospecting and mining of uranium in the country.
The Tanzanian government had said it would start higher grade uranium mining early 2012 at Mkuju River following the completion of the feasibility study and the approval of the environmental impact assessment for the area.
The capital cost for the project estimate at USD 298 million in which USD 140 million will be used for the processing plant and USD 158 million for the project infrastructure.
Mr Artem Gorbachev, the Chief Press Officer of ARMZ Uranium Holding Company was last week quoted by the local and regional newspapers as saying his firm is suspending its agreement with Mantra Resources over recent crisis in Japan nuclear plant.
He said the ARMZ consider that the condition preceding into the scheme’s implementation agreement {SLA} dated December 15, 2010 between ARMZ and Mantra in relating to a material adverse change is not capable of satisfaction. “JSC Atomredumentzoloto has notified Mantra Resources Ltd that it believes that the series of incidents at the nuclear power plants in Pukushima, Japan are likely to have a material adverse effect on the business.”
The incident in Japan is likely to have a material adverse effect on the business, results of operations assets or liabilities, financial position of prospects d Mantra Resources. But that ARMZ intend to continue discussions in an effort to explore how the transaction may proceed.
Tanzania’s Minister for Energy and Mineral Resources William Ngeleje was quoted by the EASTAFRICAN WEEKLY as having said in Dar Es Salaam that Tanzanian government will continue to go ahead with the mining of uranium starting next year.
The project has the capacity to generate pre-tax cash margins of approximately USD 115 million per uranium at an average uranium price of USD 60 per pound over the life of the mine.
The Minister said that all the necessary processes required with respect to Special Mining Project license are also complete.
“The project has been advised that all the process by the Tanzania legislation for the issue of environmental impact assessment {EIA} certificate are well advanced,” said the Minister, adding that the government said the publication of the Uranium Regulations has been completed and that these have been included in the country’s proposed new mining regulations.
Prof Iddi Mkilaha, the director general the Tanzania Atomic Energy Commission {TAEC}, however, countered this by telling the local media that the regulatory authority has not issued any uranium mining license for Mantra Resources to start its work on the mining site.
Prof Mkilaha said there are still lots of regulations that need to be followed and TEAC will not issue any license in the near future for foreign or local firms unless proper procedures have been followed.
“There has been increasing regulatory concern all over the world to protect the safety of workers, public and the environment, prior to mining,” he added.
There are more that 108.9 million tones of mineral resource estimated at Mkuju River capable of producing an average annual production of 3.7 million pounds Triuranium actoxide {U3O8} over the minimum of 12 years the mine life.
Mkuju River Uranium Project was targeted to produce approximately 3.7 million pounds of uranium a year using the Res-in-Pulp metallurgical process.
Ends