Writes Leo Odera Omolo.
The latest reports emerging from Dar Es Salaam says the Tanzanian uranium mining project is back on track after an Australian firm Mantra Resources Ltd agreed to lower its offer to Russian Russia’s JSC Atomredmentzoloto {ARMZ} from USD 1.16 billion to USD 944 million.
ARMZ had said last week it had shelved plan to purchase the Mkuju River uranium assets in Southern Tanzania from Mantra over the recent Japanese nuclear plant crisis.
The transaction, to be closed in July this year, will see ARMZ acquiring on of the issued share capital in Mantra Ltd including Mkuju River project in Tanzania.
Construction of the mining plant in Southern Tanzania will start in the first quarter of 2011 with operations beginning in the fourth quarter of 2013.
Two weeks ago, ARMZ had given Mantra Ltd, a notice that the on-going nuclear crisis in Japan could hurt its operations. ARMZ, however, indicated that it was willing to exlo5re how the transaction could proceed by way of an alternative approach.
The Chief Executive Officer of the Mantra Ltd in Tanzania, Tony Devlin said the revised transaction is in the Mantra’s best interest taking into consideration the current global equity market condition and increased uncertainty for the uranium sector.
Devlin further stated that the capital cost for the construction of the mining plant including all associated infrastructure stands at USD 298 million.
Tanzania’s Minister for Energy and Minerals William Ngeleja was quoted this week by the influential EASTAFRICAN regional weekly as saying that the Mkuju River Project is shaping up into a truly world-class venture and has the potential in its first phase of development to position the country as the third and perhaps even the second largest producer of uranium in Africa.
Minister Ngeleja said the pre-feasibility study in March 2010 indicated that, once developed the mine would produce 1,650 tones of uranium oxide a year thus overtaking the US – – which produced 1,560 tones in 2009 – – to become the eighth largest producer in the world. Tanzania, he added, “will produce three times more uranium oxide than South Africa.”
The mining plant will have an average annual production of 1,650 tones per annum with the potential to expand production in the second phase of the project And this will be the second major mining development in South Eastern Tanzania, bringing jobs to an underdeveloped region with a foreign direct investment of USD 450 million generating approximately USD 250 million in annual foreign currency receipts.
The government of Tanzania expects about USD 630 million in royalties, income and employee taxes directly from the project based on the 15 year estimated life span of the mine.
Ends