Various firms are in agreement that the new laws would have far-reaching
effects on their mining projects, and could cost them millions of
dollars in investment. PHOTO FILE | NATION
Australian mining company OreCorp has announced plans to review
its operations in Tanzania, which is reviewing its mining laws to enable
the government to renegotiate mining contracts.
Other
mining companies have also said they are reviewing the implications of
the proposed law changes, which have drawn criticism for their potential
to stifle investment.
Acacia announced that it had
served a notification for international arbitration shortly after the
Bills were passed ahead of the negotiations between the company and the
government over tax evasion allegations.
Acacia’s
decision came even after President John Magufuli warned that companies
seeking international arbitration would be banned from operating in the
country.
OreCorp
said the new law could potentially impact its $287 million Nyanzaga
gold project, which is projected to produce about 213,000 ounces of gold
per year over a 12-year mine life.
According to Creamer Media,
South Africa’s mining news weekly, trading of the shares of Australian
Securities Exchange (ASX) -listed exploration company Kibaran Resources
was suspended as the company considered the implication of the proposed
law.
Kibaran’s Epanko graphite project is expected to
cost some $89 million to construct, and could produce some 60,000 tonnes
of graphite per year.
Graphite developer Walkabout Resources said it would continue engaging with Dar on the issue while monitoring the situation.
Walkabout
is currently constructing Lindi Jumbo graphite project in southeast
Tanzania that will produce 40,000 tonnes of graphite per year for over
20 years.
According
to Reuters, Black Rock Mining Ltd has received legal advice confirming
that it is too early to ascertain the full impact on the company’s
Mahenge graphite project while Graphex Mining Ltd said a number of new
provisions of proposed legislation are not expected to impact the
company.
Shanta Gold Ltd is seeking advice while
assessing its potential impact. On its part, Volt Resources Ltd said it
would continue with its plans for Namangale project.
Strandline
Resources Ltd believes the legislation will not have major impact on
its plans to achieve exploration and project development goals.
While
rejecting international arbitration, the proposed legislation provides
that renegotiation of mining contracts be completed within three months
or the specific section of the contract be cancelled.
Turbulent economic time
Tanzania said it is bracing itself for turbulent economic times after parliament passed the Bills.
The
amendments will affect six laws: The Mining Act, Cap.123; the Petroleum
Act, Cap. 392, Income Tax Act, Cap 148; the Insurance Act, Cap 394 and
the Tax Administration Act, Cap 438.
Recently,
parliament passed the Natural Wealth and Resources Contract (Review and
Re-negotiations of Unconscionable Terms) Bill, 2017 and the Natural
Wealth and Resources (Permanent Sovereignty) Bill 2017, which states
that all natural resources belong to Tanzanians.
The
Natural Wealth and Resources (Permanent Sovereignty Act 2017 further
states that all disputes relating to extraction, exploitation or
acquisition and use of natural resources shall be adjudicated by
judicial bodies or other organs established in and accordance with laws
of Tanzania.
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