PERTH (miningweekly.com) – Australian miners have responded with mixed feelings to the announcement of possible legislative changes in Tanzania.
Three Bills that were recently submitted to the Tanzanian Parliament would allow the government to force mining and energy companies to renegotiate contracts.
The Bills cover natural resource contracts, sovereignty and would amend existing laws to allow the government to renegotiate or dissolve contracts with multinational companies.
Graphite developer Walkabout Resources said on Monday that the company had agreements in place that could be considered outside the scope of the existing regulatory framework, or which could constitute “unconscionable terms”.
As such, Walkabout is confident that there is little direct risk to the company’s interest in Tanzania.
However, executive chairperson Trevor Benson said that the company would continue to engage with government officials on the matter, and would observe the situation closely.
Walkabout is currently developing a 40 000 t/y graphite-in-concentrate mine at the Lindi Jumbo project, which is expected to operate for over 20 years. The project was recently granted environmental approvals and Walkabout is looking at funding options for the project.
Meanwhile, junior OreCorp has warned that if passed by Parliament, the new legislation could potentially have an adverse effect on the company’s Nyanzaga gold project.
ASX-listed OreCorp told shareholders that the company was continuing to review and seek advice on the proposed changes.
The Nyanzaga gold project is expected to deliver some 213 000 oz/y of gold over a 12-year mine life, and will cost $287-million to develop.
The share trading of graphite developer Kibaran Resources was placed in a trading halt as the company considers the implication of the proposed legislative changes.
Kibaran’s Epanko graphite project is expected to cost some $88.9-million to construct, and could produce some 60 000 t/y of graphite.
Newswire Reuters reports that the bill on natural wealth and resources states: "Where the government has served notice of intention to renegotiate the arrangement or agreement ... and the other party fails to agree to renegotiate the unconscionable terms or no agreement is reached ... such terms shall cease to have effect and shall be treated as having been expunged."
It defines "unconscionable terms" as anything that is "contrary to good conscience and the enforceability of which jeopardises the interests of the people" of Tanzania.
The bills reject international arbitration - a standard requirement of many international deals - and stipulate that any renegotiation must be completed within 90 days or that section of the contract is void.
- with reporting by Reuters