Chamber: Mining sector is set to change economic landscape

BY THE GUARDIAN REPORTER

22nd April 2013

TCME chairman, Joseph Kahama

Tanzania will, in the next five years, accumulate several new major mines, increase production and change the mining sector’s landscape and its contribution to the national economy.

This is contained in a report released by the Tanzania Chamber of Mineral and Energy (TCME) released at the weekend in Dar es Salaam.

Releasing the report, TCME chairman Joseph Kahama said the new mines will result in a substantial increase in the number of Tanzanians employed in the sector, increase government revenues and will see improvements in the infrastructure and social services in related areas.

“Depending on fiscal policies and regulatory frameworks and mineral commodity prices it is anticipated that several new major mines will be brought into production in the next five years or so. Once they start operating Tanzania will see a major economic transformation,” he said.

He mentioned one of the anticipated mines to start operations soon to be Mantra’s Mkuju River project, where he noted that there has been intense debate in the country about the development of uranium mines due to fears associated with the inherent radioactive nature of the mineral.

Globally, as at November 2012, there were about 434 nuclear power reactors. According to the World Nuclear Association, there will be 650 nuclear reactors operating by 2032. Accordingly, yearly reactor related uranium requirements worldwide are forecasted to rise to between 98,000 tonnes and 136,000 tonnes by 2035.

“This presents great opportunity for uranium developers in the country as there will be a ready market for the concentrate (yellow cake),” Kahama noted.

Meanwhile, both Mantra and Uranex have been engaging in public awareness campaigns on the facts of uranium mining in the surrounding communities and far beyond. With these exciting developments, Tanzania will soon be joining the league of African Uranium producing countries. Mantra’s Mkuju River project in southern Tanzania is estimated to have average deposit resource of 119.4 million pounds of uranium.

According to Mantra Tanzania's Managing Director Asa Mwaipopo, it will take a two-year period to complete construction work before they could start to produce uranium oxide at which point Tanzania will be number three on the list of Africa’s uranium producers after Niger and Namibia.

On the sideline of the meeting, Mwaipopo mentioned that the project will produce direct and indirect cash flows in Tanzania in excess of $640 million and will provide foreign direct investment (FDI) in excess of $1 billion or equivalent to 4.76 percent of Tanzania's GDP.

Statistics from the TCME report shows that between 1997 and 2011 a total of $10.1bn worth of minerals were sold by Chamber members, compared to only $16.0 million in 1997. The minerals include gold, diamonds, silver, copper and tanzanite. In 2011, $178.6m was paid in royalties and statutory taxes to the government, while in the same year, community development initiatives amounting to $1.51m were made as compared to $1.96m for previous year.

Employment in the formal mines increased from 1781 in 1997 to about 15,000 in 2011 and is expected to keep increasing as potential new mines are constructed.

In 2011 TCME members spent a total of $441.5m for local procurement of goods and services compared to $440.9m in 2010, while salaries paid from mining operations to Tanzanian employees amounted to $87.3m compared to $91.6m in 2010.

The statistics provide to a large extent the tangible fiscal and social benefits that accrue to the Tanzanian economy which enables government to deliver on important development projects.
The report, however, says the country’s mining industry will continue to face various challenges because of its snail’s pace development. 

SOURCE: THE GUARDIAN