M a r k e t N e w s

Tanzania: Sh6 Trillion Coal, Iron Ore Projects Hit Snag

Posted on : Monday, 24th October 2016

 Dar es Salaam — The $2.7 billion (about Sh6 trillion) Mchuchuma coal and Liganga iron-ore mining projects in the southern highland zone may delay further as investors await the government's decision to offer incentives, BusinessWeek has learnt.

 
The Energy and Minerals Deputy Minister, Mr Medrard Kalemani said in parliament in May this year that the project - which is being l bankrolled by Sichuan Hongda Group of China in partnership with the state-owned National Development Corporation (NDC) - would start in March 2017.
 
The two partners have formed a company - known as Tanzania China International Mineral Resources Limited - and have entrusted it with the running of the projects.
 
But the NDC public relations manager Mr Abel Ngapemba told BusinessWeek last week that since such huge projects are normally given incentives, the implementers were still keeping their fingers crossed before it actually kicks off.
 
"These incentives normally help the investors when it comes to implementing such huge projects.
 
"They normally include a number of things including taxation as the government deems fit," he said.
 
Once issued, he said, the incentives will have to be recorded in the Government Notice (GN) to make them official and legally binding.
 
"Once the incentives are issued, the project will commence whereby compensation of the villagers who will have to vacate their areas to pave way for the project to officially start, will be undertaken swiftly," he said. Initially, the process of compensating the villagers surrounding Mchuchuma coal and Liganga Iron ore projects was supposed to start in February, 2016 but it had to be postponed due to a number of reasons including paving way for the China New Year celebrations.
 
This is despite the fact that the evaluation process was completed in September, 2015 and it established that at least Sh13 billion would be required for compensations.
 
The evaluation exercise established that there are 126 households around the Mchuchuma
 
project while some 290 individuals own farms there. Similarly, the Liganga project is surrounded by 19 households and some farms that are owned by a total of 299 individuals.
 
The project - which has been on and off over the years since 1898 when it was first discovered - was expected to kick off any time soon after completion of the compensation exercise, with a goal of completing the main project in the year 2019.
 
The project envisions setting up a Coal Thermal power Plant of 600MW at Mchuchuma of which 250 MW will be set for Liganga Metallurgical Complex while the remaining 350MW is expected to be connected to the national grid.
 
It also involves construction of a 220kv transmission line between Mchuchuma and Liganga for power supply to the Liganga Metallurgical complex.
 
A feasibility study conducted on Mchuchuma showed that there are 540 million tonnes of coal deposits, with a capacity to produce three million tonnes annually enough to produce 600MW electricity for a period of not less than 100 years.
 
The Liganga/Mchuchuma projects have been on the government's drawing boards for several decades.
 
The Chinese firm owns 80 per cent of the Liganga mine and 70 per cent of the Mchuchuma coal complex with a 100-year lifespan and a total value of $54.8 billion combined.

Source : allafrica.com
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