Tanzania cancels mining licences
• Loss of retention licence will affect undeveloped Kabanga nickel project
Tanzania has revoked a retention licence for an undeveloped nickel project jointly owned by Barrick Gold and London-listed miner Glencore as part of enforcement of a new mining regime.
The licence for the Kabanga nickel project in northwestern Tanzania was among 11 retention licences cancelled by the government under the Mining (Mineral Rights) Regulations of 2018 approved in January.
A retention licence is granted to holders of a prospecting licence after they identify a mineral deposit within an area that is potentially of commercial significance but cannot be immediately developed due to technical constraints, adverse market conditions or other factors.
“The mining commission would like to inform all owners of retention licences that the licences have been cancelled,” commissions chairman Idris Kikula said in a statement.
Under legislation passed in July 2017, the mining commission has been given extensive powers to regulate and monitor mining in Tanzania.
Barrick Gold and Glencore, which own the 50-50 joint venture project, were not immediately available for comment. Their licence was due to expire in May 2019. Other retention licences cancelled by the mining commission target nickel, gold, silver, copper and rare earth exploration companies.
Tanzania, Africa’s fourthlargest gold producer, is seeking a bigger slice of the pie from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector. Retention licences were previously granted for not more than five years, which was renewable. Tanzanian President John Magufuli appointed the chairman and commissioners of the mining commission in April, paving the way for tighter regulations. He has sent shock waves through the mining industry with a series of actions since his election in late 2015. In July 2017, he suspended the issuing of all new mining licences until the new commission was in place.
The new mining rules state that “all retention licences issued prior to the date of publication of these regulations are hereby cancelled and shall cease to have legal effect.
“Consequent upon cancellation of retention licence ... rights over all areas subject of retention licences are hereby and without further assurance reverted to the government.”
Canada’s Barrick Gold, the world’s biggest gold producer, is the majority shareholder of London-listed Acacia Mining, which is embroiled in a tax dispute with the Tanzanian government over mineral exports.
Barrick and Glencore have been looking for potential buyers for the Kabanga project since 2015 after lower global nickel prices derailed the project, according to mining sources.
The two miners have held the licence since 2009, with estimated deposits of 36.3-million tonnes, grading 2.8% nickel.