PERTH (miningweekly.com) – The Tanzanian government has inked to framework agreements with Australian resource developers.
ASX-listed graphite developer Black Rock Mining has signed a framework agreement for the development of its Mahenge project.
The agreement includes the provision for a free carried interest (FCI) which is required by law under Section 10 of the Mining Act whereby a 16% non-dilutable shareholding in the capital of all mining companies is held by the Tanzanian government.
Under the agreement, Mahenge would be developed by a joint venture (JV) vehicle known as Faru Grpahite Corporation, and a special mining license will be granted to unify the existing licenses. An exemption would also be issued to Black Rock from the provisions of the Mines Act that would require the company to issue 5% of stock to local interst and listing 30% of its stock on the Dar es Salaam stock exchange.
“Reaching agreement with the Tanzanian government including FCI is a watershed moment for Black Rock. This enables the company to rapidly move forward to deliver a new clean source of high-grade Graphite to a growing global market. We said from the start that aligning with the government and people of Tanzania was absolutely the right approach to provide project certainty for all stakeholders,” said Black Rock MD and CEO John de Vries.
“Under the framework agreement, the government of Tanzania will secure project economics through a combination of dividends, taxes and duties. Our commitment to Tanzania exceeds this through the purchase of goods and services, provision of power, rail haulage and port services. It is estimated that the cumulative benefit to the Tanzanian economy will be $6.5-billion over the life of the project, based on the 2019 enhanced definitive feasibility study.
“I am pleased that the company and the government of Tanzania are now partners and we look forward to delivering on our shared promises, by building the Mahenge graphite mine that will bring significant benefits to Tanzania, and for global decarbonization markets driving clean energy storage technologies.”
A 2019 definitive feasibility study estimated that th eproject could produce some 340 000 t/y of graphite during Stage 1 operations, for a capital incestment of $116-million.
Meanwhile, ASX-listed mineral sands developer Strandline Resources has also signed a framework agreement for its assets in that country, forming a joint venture named Nyati Mineral Sands.
Strandline will own 84% of the newly formed JV company Nyati with the Tanzanian government acquiring a 16% non‐ dilutable free carried interest. Nyati will produce critical minerals of zircon, titanium, and monazite containing rare earths, as well as garnet.
Nyati’s first project set for development is the high‐margin Fungoni mineral sands project near Dar es Salaam, followed by the large‐scale Tajiri mineral sands project near the port of Tanga.
The Fungoni and Tajiri projects are forecast to generate a total of more than $1-billion of earnings before interest, tax, depreciation and amortisation over some 30 years based on published production targets, said Strandline on Tuesday.
Strandline MD Luke Graham said the framework agreement and JV partnership was a major milestone in the company’s growth.
“This agreement puts us on the path to establishing a world‐class mineral sands business in Tanzania, adding to our tier‐one Coburn mineral sands project now under construction in Western Australia,” Graham said.