Tanzania has announced it will soon begin extracting nickel from various deposits located in Dutwa in the northern section of the country, and will be aided by a $5 million investment into the project by the International Finance Corporation (IFC).
IFC will use the funds to conclude a feasibility study of the proposed nickel mine. In return for the financing, the IFC, which is the private sector wing of the World Bank Group, will receive up to 10 percent stake in African Eagle Resources, the mineral development firm that will perform the geology services and mine planning assessments. The study is expected to be finished by the end of 2012, according to The East African.
African Eagle has already entered into one agreement with the IFC after the UK-based company initially discovered the deposit in 2008, which will result in the issuing of more than 45 million ordinary shares in the company to IFC.
According to Business Week, Tom Butler, the IFC head of mining, stated that IFC was happy to sign the deal with Africa Eagle, and expects the mine project to help Tanzania become a major African nickel producer.
“We look forward to helping and supporting African Eagle Resources to implement…the social best practice for its mining activities in Tanzania,” he said.
Tanzania Commissioner for Minerals Ali Samaje told the media outlet that the Dutwa Nickel Project will likely become one of the top three economical nickel miners in the country, and will rank with the Ntaka Hill project in Nachingwea District and Kabanga project in the Kagera region. Together, the three mines will significantly boost the county’s economic growth, he said.
“Financial capability is the essential mechanism that gives confidence to the investors,” Samaje said. “The government welcomes eligible supporters on mining projects.”
According to the U.S. Geological Survey, Tanzania’s mining and quarrying industry accounted for 2.6 percent of the country’s GDP in 2008. The total value of the mining industry’s output grew by 2.5 percent in that year.
At the country’s Kabanga nickel deposits, major miners Barrick Gold Corp. and Xstrata plc. formed a join venture to explore the region’s estimated 58.9 million metric tons of resources, of which 2.44 percent were said to contain nickel.
The deposit also contains cobalt, copper and platinum, a 2010 feasibility study found.
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