Tanzania, China in $3bn mining deal Send to a friend
Wednesday, 21 September 2011 22:04
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[Members of the parliamentary Public Organisation Accounts Committee, led by chairperson Zitto Kabwe , are briefed on the potential of the Mchuchuma coalfields during a visit earlier these year.Second left is National Development Corporation board Chairman Chrisant Mzindakaya]
Members of the parliamentary Public Organisation Accounts Committee, led by chairperson Zitto Kabwe , are briefed on the potential of the Mchuchuma coalfields during a visit earlier these year.Second left is National Development Corporation board Chairman Chrisant Mzindakaya
By Frank Kimboy, The Citizen Reporter
Dar es Salaam. Tanzania and China yesterday signed an agreement worth $3 billion (about Sh4.8 trillion) to develop the Mchuchuma coal and Liganga iron ore projects in the south of the country.The two projects are the single largest investment venture in East Africa.Implementation of the Mchuchuma project, among other things, aims at improving power output in the country.
It might also see Tanzania enter the league of coal exporting countries.The deal was finalised yesterday when National Development Corporation (NDC) and Chinas Sichuan Hongda Group signed a joint venture agreement.
Dr Chrisant Mzindakaya and Mr Liu Canglog, the chairpersons of the NDC and Sichuan Hongda Group boards of directors, respectively, signed the agreement in Dar es Salaam in the presence of Vice President Mohamed Gharib Bilal.Under the agreement, NDC and Sichuan Hongda Group will form a subsidiary company to be known as Tanzania China International Mineral Resources Limited (TCMR), which will be charged with implementing the two projects.
NDC will hold a 20 per cent stake in TCMR with the Chinese firm holding the remaining 80 per cent.Dr Mzindakaya said TCMR would be responsible for raising the $3 billion required for the implementation of the projects in two phases.
The first phase will entail laying the groundwork at Mchuchuma and eventual mining of coal to be used in generating electricity while the second phase will involve exploration and extraction of iron ore from Liganga.
We estimate that there are over 480 million tonnes of coal reserves at Mchuchuma, which are enough to generate 600MW of electricity of which 300MW will be used to extract iron ore at Liganga and the remaining 300MW will be connected to the national grid, Dr Mzindakaya said.
He added that power production at Mchuchuma would be implemented in four phases, with 150MW being produced at each stage.However, Dr Mzindakaya said implementation of the two projects depended on the availability of funds. TCMR has been given six months to verify the data provided by NDC before embarking on the Mchuchuma project.
He said he was optimistic that the Mchuchuma project would start in six months following assurances by Sichuan Hongda Group that it had already acquired $600 million (about Sh960 billion) from Chinese banks as initial capital.
Dr Mzindakaya said TCMR had been given 36 months for exploration ahead of the Liganga project implementation.
It is projected that the Mchuchuma coal mine will be able to produce three million tonnes of coal annually, which will be used to generate electricity. Some of the coal will be exported.The Liganga mine will be able to produce three million tonnes of iron ore and one million tonnes of iron and steel annually when fully operational.
All the iron ore to be extracted will be locally processed. Part of it will be used in the country and some will be exported, he said. Tanzania uses only 25,000 tonnes of iron annually.
Speaking at the signing ceremony, Dr Bilal hailed the agreement as a milestone achievement in the countrys push towards attainment of the 2025 vision. The vision aims at transforming the countrys economy from low productivity agriculture into a modern and competitive semi-industrialised country.
Dr Bilal said the project, which is the largest single private sector-led investment in East Africa, was inspiring and it will form the foundation for liberating the country from power crisis.He also urged the parties involved in the implementation of the projects to draw a strategy that would see to it that the infrastructure to be developed would make it possible to fully exploit resources at the two sites.
Industry, Trade and Marketing minister Cyril Chami said the government was looking for partners to develop infrastructure that would support the two projects through the Mtwara development corridor.
Development of infrastructure entailed the upgrading of Mtwara port, establishment of a railway line which will connect Liganga and Mchuchuma with either Mtwara port or Tazara railway line as well as an electricity transmission network. Dr Chami said by solving the power crisis, the projects would also help to boost GDP by creating a good investment environment.
Hapo juu penye RED FONT.Itawezekana vipi u-sign contract wakati huja-verify data??????????????????????