Tanzania expecting 8 billion/- yearly from graphite exploitation
The government expects to earn over $3.6 million (8.4 billion/-) annually once the envisaged graphite mine at Mahenge in Ulanga District, Morogoro Region, starts operations.
Adolph Ndunguru, the Minerals permanent secretary, made this observation at a progress meeting with stakeholders of the Mahenge mining project, grouping the Minerals ministry, the mining commission, the Treasury Registrar’s office, the revenue authority (TRA), TANESCO, the Tanzania-Zambia Railway, TanRoads and the Tanzania Ports Authority.
The amount is based on 51% of the surplus from the investment whose total benefit to the national economy is projected at $8 billion over a period of 26 years.
The project results from an agreement with Black Rock Mining Ltd., Mahenge Resources Ltd. (T) and Mahenge Resources Ltd (UK) inked last December 13, to jointly develop the graphite mine.
Under the framework agreement, the parties agreed to establish a joint venture company for the mining activity, setting up Faru Graphite Corporation, at a ceremony attended by President Samia Suluhu Hassan, where the minister, Dr Doto Biteko signed for the government.
The government has a 16% free carried interest, a stake for which it deposits no capital, and the investor, Black Rock Mining, retains 84% shares in the joint venture, Faru Graphite Corp.
Two months ago Faru Graphite Corp. was handed the mining license, enabling the project to enter the development stage, envisaging that at full operation the project will create over 1,000 direct job opportunities.
The project is timely as it has the potential to maximise graphite exploitation advantages in the global market where graphite is used in renewable energy technologies, such as solar panels.
An online entry says graphite is resistant to extreme heat, “so it is perfect for the crucibles and moulds used to cast the silicon in solar panels, and works as a heat shield and thermal insulator.”
The meeting sought to bring the relevant stakeholders to the same operating framework to ensure alignment on the conduct of various aspects of the project in the national interest, the ministerial executive noted.
Alimiya Osman, the Faru Graphite CEO, said that when the project kicks off, the government is projected to earn up to 800m/- a day through its 16% stake.
John Vries, the Graphite Mining executive chairman, said that the framework agreement enables the government to secure project benefits through a combination of dividends, taxes and duties.
The company’s commitment involves the purchase of goods and services, supply of electricity, rail haulage work and extensive use of port services, he said.
Key facilities and infrastructure to be set up for the project include rail transport from Ifakara to the port of Dar es Salaam via the Tanzania-Zambia railway.
Other facilities are access to land at Ifakara for a railway siding to Tazara line, power supply to the mining site, along with suitable tarmac road from Ifakara to the mining site, he said. Confirmation of the tax framework will be sought during the construction of the mine as set out in the framework agreement, along with the resettlement and compensation exercise, he added.
