+27 71 448 3496
leon@whyafrica.co.za

Barrick shines in new look Tanzania

Share Article
Dar Es Salaam in Tanzania. The country is attracting new investment despite a number of challenges. Image credit: Leon Louw for WhyAfrica

Barrick shines in new look Tanzania 

Following a period of political and regulatory uncertainty between 2015 to 2021, Tanzania has regained its status as a favourite mining destination for exploration juniors, while established companies like Barrick Gold are flourishing in the revived East African nation. 

By Leon Louw for WhyAfrica   

Whilst the long-term fundamentals of what makes Tanzania an attractive mining market, namely safety, security, and strategic location, didn’t change under the late President John Magufuli, the political and regulatory uncertainty that became a hallmark of President Magufuli’s time in office deterred many from investing in what is a capital intensive and long-term sector.

According to Ana Rabin, Managing Director of Above Ground Advisory (AGA), President Samia Suluhu (who replaced the late President Magufuli), has worked hard to repair Tanzania’s reputation on the global stage, ensuring that the country is perceived as open for business in all sectors.

“However, despite these efforts, Tanzania remains a challenging country in which to do business,” says Rabin.

“The mining sector must engage with dozens of regulators and ministries, many of which work in silos, and where regulations can be interpreted one way by the central government in Dodoma and differently at the regional or district levels.

“Despite these ongoing challenges, optimism in the sector is seeing numerous goods and service providers re-visit Tanzania as a potential market. Additional companies are picking up Prospecting Licenses (PL) and, critically, more projects are inching towards construction and development,” Rabin tells WhyAfrica.

To subscribe to WhyAfrica’s free magazines and newsletters click on the link  https://www.whyafrica.co.za/subscribe/

Backlog of projects (Barrick shines in new look Tanzania)

Rabin says that whilst the legislative and regulatory changes of President Magufuli impacted the entire sector, perhaps the most notable impact was that the changes, that included a government free carried interest, removal of stabilisation clauses and changes in royalty rates, meant it was near impossible for companies with a Mining License (ML) or even a Special Mining License (SML) – where the capex of a project is than USD100-million – to attract debt funding.

This has resulted in a backlog of projects, a handful of them falling into the SML category, stalling pre-construction. This sweet spot, if managed successfully by both government and the exploration companies, could see a disproportionate number of mines move into construction in the next 12-24 months.

Even more appealing perhaps, is the diversification of these projects, ranging from more traditional gold, coal and copper projects to nickel, rare earth, graphite, and heavy mineral sands.

“Projects with a SML that are seeking to move into construction include ASX-listed OreCorp’s Nyanzaga Gold Project, Black Rock Mining’s Mahenge Graphite Project, the Kabanga Nickel project, which has received investment from global giant BHP, and Cradle Resources’ Panda Hill Niobium Project, amongst others.

“Unlocking these projects will bring significant benefits to the government (that has a free carried interest stake in each project) as well as the companies, the surrounding communities, and the entire value chain that is required to support mines of this size.

“Furthermore, beneath the SML holders, there are dozens of companies with MLs trying to raise funding to move into construction that represent geologically and geographically diverse opportunities for the country,” Rabin tells WhyAfrica.

WhyAfrica will visit Tanzania as part of its 2023 WhyAfrica Road Trip through the Limpopo Province of South Africa, Botswana, Zambia, DRC, Malawi, Tanzania and Kenya. WhyAfrica members will have access to regular updates during the Road Trip, can join certain stages of the trip, and can attend the informal networking days before the trip start in Johannesburg, South Africa and midway through the trip in Dar Es Salaam, Tanzania at a huge discount. To become a member click here:

https://www.whyafrica.co.za/product/membership/

Barrick shines in new look Tanzania   

Meanwhile gold mining giant Barrick’s two gold mines in Tanzania, North Mara and Bulyanhulu, boosted their combined output to 547,000 ounces in 2022, achieving another step towards their potential Tier One status in the group’s asset portfolio as a combined complex.

According to Barrick president and CEO Mark Bristow, exploration is continuing to deliver opportunities to grow the mineral reserves net of depletion at both mines.

“North Mara’s transition to owner-mining is successfully ramping up its ongoing open pit expansion with improved efficiencies and costs, while technological advances in the underground operation are increasing productivity,” says Bristow.

He adds that the restart of mining at the Gena pit is on track. “At Bulyanhulu the main focus is on ramping up the development of its declines to access the new Deep West mineral reserves and defining further exploration potential in Reef 2,” explains Bristow.

Since the take-over in 2019, Barrick has pumped USD2.4-billion into the Tanzanian economy. Last year it paid USD303-million in taxes, royalties, levies, dividends and shareholder loan repayments and USD476-million to local suppliers.

Barrick shines in new look Tanzania

The 2022 WhyAfrica Southern African Road Trip was such a success that it will now become an annual event. In 2023, we’ll visit the Limpopo Province of South Africa, Zimbabwe or Botswana (depending on the political climate in Zimbabwe in the run-up to the general elections), Zambia, DRC, Malawi, Tanzania and Kenya. 

We’ll once again visit projects in the mining, agriculture, energy, infrastructure, water management, tourism, conservation, environmental management, and development sectors, with a strong focus on ESG, the African Continental Free Trade Area (AfCFTA), biodiversity, political risk and climate change.

In addition to visiting the project sites, we hope to interview as many role players in these countries as possible so that our opinions and insight is balanced and not biased. Remember you can look at all our WhyAfrica photographs on the WhyAfrica website. To view the images click here  https://www.whyafrica.co.za/road-trips/whyafrica-road-trips/ or follow our Instagram page on https://www.instagram.com/

Subscribe to our YouTube channel @whyafrica4709 and have a look at our unique and unplugged video footage of the 2022 WhyAfrica Southern Africa Road Trip   

WhyAfrica promotes Africa as an investment and travel destination, analyses the continent’s business environment and investment opportunities, and reports on how the politics of African countries affect their development

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. Subscribe here to WhyAfrica’s free newsletter and digital magazine. When it comes to natural resources in Africa, we cover all angles.

To subscribe to WhyAfrica’s free newsletters and digital magazines, click on the link https://www.whyafrica.co.za/subscribe/

For more news about Africa, visit our website at www.whyafrica.co.za 

Barrick shines in a new look Tanzania

 

Share Article

Sectors

AgricultureEnvironmental Management & Climate ChangeEnergyESGInfrastructureMiningPolitical EconomyTourism and ConservationWater Management