DAR ES SALAAM, 21 January 2021 – The government of Tanzania will start developing the world’s largest battery-grade nickel sulphate deposit, a government statement has confirmed.
Tanzania has finalized the setting up of a joint company with British mining company Kabanga Nickel, formerly LZ Nickel, to pursue this venture.
The British partner holds an 84 percent stake in Tembo Nickel Corp. (as the joint company is called), while Tanzania holds 16 percent of the shares.
News reporting Thursday on the deal included a statement attributed to government officials that it is tradition for the Tanzanian government to hold only a 16 percent stake in mining contracts.
The main mission of Tembo Nickel Corp. is to mine, process and refine class one nickel with cobalt and copper co-products.
The mine situated in Tanzania’s northwestern region holds 58 million tonnes at 2.62 percent Ni containing more than 1.52 mllion tonnes of nickel along with significant deposits of cobalt and copper giving the project an estimated 30-year mine life.
This is not the first time a deal has been reached on this nickel deposit.
In 2018, Tanzanian President John Magufuli revoked a license his government had given to Barrick and Glencore as well as other mining interests to develop the project.
Two bills passed earlier by parliament gave Magufuli the right to renegotiate existing mining licenses as well as powers to revoke existing permits.
Part of the concern by parliament was that Tanzania was not getting its money’s worth out of mining projects in the country.
A 2019 parliamentary committee report estimated that Tanzanian small-scale miners, without access to gold dealers, produce about 20 tonnes of gold per year.
The report alleged that small miners sell and/or export about 90 percent of their output illegally, leading to huge loss in revenue to the country’s treasury.
To curb illegal exports of gold and other precious metals, Tanzania ordered the setting up of government-controlled trading centers in all mineral-producing regions of the country in 2019.
The first such center was inaugurated in the northwestern town of Geita close to the country’s biggest gold mine operated by South Africa’s AngloGold Ashanti.
Gold is a key source of foreign exchange for Tanzania, which ranks as Africa’s fourth largest gold producer after South Africa, Ghana and Mali.
In 2018, the east African country earned $1.549 billion, just a tiny fraction up from revenue of $1.541 billion earned in 2017, according to official data.