THE government and investors from three countries yesterday signed a joint venture agreement for the extraction of nickel, kobellite and copper at Kabanga in Kagera Region.
President John Magufuli witnessed the signing in Bukoba municipality in a deal that will see the government get 50 per cent of the proceeds and another 50 will go to investors from the United States, the United Kingdom and Australia.
The mining will be carried out under the newly established Tembo Nickel, to oversee production of the mineral, he said, commending negotiating teams of both sides for reaching this accord, expressing confidence that Tanzania will continue to be a great place for investment.
“The Kabanga nickel project was initiated in 1976, but it has remained stagnant for nearly half a century as we didn’t get the right investor to take the project forward. I hope that, as we have got LZ Nickel Ltd the project is going to produce positive outcomes benefitting the country,” he said.
Dr Magufuli also commended the investors for their plan to establish a smelter to refine minerals extracted in the country before being sold locally or exported.
“A smelter will be constructed in Kahama District, Shinyanga Region not only to refine nickel but other minerals like copper and kobellite. This will also produce employment and thus improve the lives of Tanzanians,” he said.
He asked the Minister for Minerals to closely supervise the work and ensure that the project commences immediately, as many people in the country are eagerly waiting for it.
In 2015, production in the mining sector stood at $168bn but today the production level has grown to $528 bn, he pointed out, noting that this is a big step in the history of the sector. With the new project initial production at the Kabanga mining site adds 664bn/- (close to $300m) per year, the president indicated.
Investors from various countries will do well to come and invest in the country as Tanzania is a safe place and has a conducive business environment, he emphasised.
“Come and establish huge investments without undue worries. We have strong security, electricity power, infrastructures and various incentives,” he said, focusing on an inclusive economy ensuring that everyone benefits from opportunities in the mining sector.
Krisfone Prisfone, the vice chairman of LZ Nickel Ltd said the signing of the framework agreement establishing Tembo Nickel Co. is a milestone for Tanzania and the East Africa Region, as the production of refined nickel, copper and kobellite products is a new and developing sphere in the global economy.
“I welcome Tembo Nickel Co. and I can assure you that our team represents significant capability and rich experience as we have been doing these activities for over 40 years ago,” he stated.
The essence of this agreement is an equitable partnership in Tembo Nickel whereby the principle of equal sharing will in practice require transparency and good faith in all dealings, he asserted.
British High Commissioner David Concar put it explicitly that just as iron contributed hugely in the first wave of the industrial revolution at the end of the 18th century, nickel and copper are proving so vital to the technologies of the 21st century, “so this is the right project at the right time in the right place.”
He said that the UK believes that the mining and refining of nickel and other minerals will be conducted to the highest standard and deliver value locally.