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'Mr. Gold' backs overhaul of Tanzania's mining laws
'Mr. Gold' Backs Overhaul of Tanzania's Mining Laws
From The Guardian
Dar es Salaam, Tanzania
Friday, July 7, 2017
http://www.ippmedia.com/en/news/mr-gold-backs-overhaul-tanzanias-mining-...
The executive chairman of the Toronto-based Tanzanian Royalty Exploration Corp., James Sinclair, who is known by the moniker "Mr Gold" in some quarters, yesterday threw his weight behind the passage of the trio of landmark laws -- namely, the Natural Wealth and Resources (Permanent Sovereignty), Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms), and Written Laws (Miscellaneous Amendments).
"The proposed changes appear to be an action to gain a fair share of the financial rewards for the people and nation of Tanzania while still providing incentives to the investors. The proposed legislation is not nationalization," said Sinclair, a well-known precious metals trader.
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Tanzanian Royalty Exploration Corp. owns a 55 percent stake in the Buckreef Gold Mine Re-Development Project in Tanzania, with the State Mining Company Corp. (STAMICO) holding the remaining 45 percent of the shares.
The passage of the three new laws has been roundly castigated by foreign investors, plus the Tanzania Chamber of Energy and Minerals which has called for the legislative process to be delayed to allow thorough consultations with stakeholders.
But in a statement issued from Canada, Sinclair said "the Buckreef Gold project supports proposed legislative trends in Tanzania."
He assured the company's shareholders that it was not aaffected by the said legislative trends.
According to Sinclair, a book he co-authored in the 1990s predicted that resource-rich countries like Tanzania would inevitably make necessary legislative changes to ensure that they get mutually beneficial mining contracts with foreign investor companies.
He said the book, titled "Boom," was written in tandem with F. Vogl, former World Bank director of communications. "'Boom' outlines the authors' prediction for the economic development of China, Tanzania, and India as those countries move into the modern global economy. Many of the legislative changes proposed in Tanzania (and elsewhere) were outlined in the book," Sinclair said in his statement.
He said his premise was that to "participate in the development of a foreign economy, investing companies must enter into mutually beneficial contracts."
"Public (listed) companies are required to comply with reporting regulations. Reporting is necessary for transparency. Reporting transparency is required not only for all exploration results but also for all economic and mineral information published on the Canadian and United States government regulatory sites," he said.
In Australia the radical new mining laws proposed in Tanzania have sent shudders through a range of Australian Stock Exchange-listed companies, torpedoing a takeover offer and prompting an unprecedented intervention from the ASX.
The ASX took the extraordinary step of forcing into trading halts almost a dozen junior exploration companies as the market sought more clarity about the impact of the proposed changes.
Under the new laws passed by parliament this week, the government hiked royalties for gold, silver, copper, and platinum exports to 6 percent from 4 percent, introduced state ownership of at least 16 percent of mining companies, and mandated the government and parliament with powers to renegotiate existing mining and natural gas contracts.
Earlier agreements signed between the government and several miners may also be torn up and renegotiated.
Australian company Cradle Resources said a proposed $55 million takeover of the firm by its joint venture partner Tremont Investments had been terminated as a direct result of the Tanzanian legislation changes.
"Although significant uncertainty exists about the proposed changes, if passed without significant amendment, they are likely to have an adverse effect on the project," Cradle Resources said in a statement.
Tanzania, which has previously been seen as one of the more stable and mining-friendly jurisdictions in Africa, has been a hub of activity for numerous ASX-listed graphite explorers in recent years. Graphite plays Magnis Resources, Volt Resources, Kibaran Resources, Black Rock Mining, Graphex, and Walkabout Resources were all halted yesterday.
Mineral sands explorer Strandline Resources, which only last week finalised a joint venture agreement that will see mining giant Rio Tinto spend at least $2 million over the next 18 months on exploration across its Tanzanian mineral sands assets, was also halted.
ASX chief compliance officer Kevin Lewis said the Australian bourse had taken the decision to suspend the companies because of the uncertainty around the changes and the potential materiality to the companies involved.
The turmoil in Tanzania appears to stem from the recent brawl between the government and London-listed company Acacia Mining Plc, which owns three gold producing mines in Tanzania and is the country's biggest employer.
Acacia, which has been banned from exporting gold and copper concentrates out of Tanzania since March amid a fight with the government over taxes, has announced that it will seek international arbitration to resolve the simmering dispute.
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