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By MIKE MANDE (The East African)
Posted Monday, March 21 2011 at 00:00
The Russian state owned nuclear energy firm- JSC Atomredmetzoloto (ARMZ) is shelving a plan to acquire the $1.16 billion Mkuju Uranium assets in Southern Tanzania over the recent Japanese nuclear plant crisis.
The move comes a month after the Russian firm obtained a take-over approval from the government of Tanzania under the Fair Competition Act 2003.
The Tanzanian government had said that it would start higher grade uranium mining in early 2012 at Mkuju River following the completion of the feasibility study and the approval of environmental impact assessment of the area.
The capital costs for the Project are estimated at $298 million in which $140 million will be used for the process plant and $158 million for project infrastructure.
Artem Gorbachev, Chief Press Officer of ARMZ Uranium Holding Company said ARMZ is suspending its agreement with Mantra Resources over the recent crisis in Japan.
Mr. Gorbachev said ARMZ considers that the condition precedent in the Scheme Implementation Agreement (SIA) dated December 15, 2010 between ARMZ and Mantra relating to a material adverse change is not capable of satisfaction.
“JSC Atomredmetzoloto has notified Mantra Resources Limited that it believes that the series of incidents at the nuclear power plant in Fukushima, Japan are likely to have a material adverse effect on the business of Mantra,” he said.
The incidents in Japan are likely to have a material adverse effect on the business, results of operations, assets or liabilities, financial position or prospects of Mantra but ARMZ intends to continue discussions in an effort to explore how the transaction may proceed.
Willian Ngeleja, Minister for Energy and Minerals said last week that Tanzania will go ahead with the mining of the Uranium starting next year.
The Project has the capacity to generate pre-tax cash margins of approximately $115 million per annum at an average uranium price of $60 per pound over the life of mine.
Mr. Ngeleja said that all necessary processes with respect to the Special Mining License are also complete.
“The project has been advised that all of the processes required by Tanzanian legislation for the issue of the Environmental Impact Assessment (‘EIA’) Certificate are well advanced,” he said.
The government said the publication of the Uranium Mining Regulations has been completed and that these have been included in the proposed new mining regulations.
But Professor Iddi Mkilaha, Director General Tanzania Atomic Energy Commission (TAEC), told The EastAfrican from Arusha that the regulatory authority has not issued any uranium mining license for Mantra to start its work.
Professor Mkilaha said there are still lots of regulations that need to be followed and TEAC will not issue any license in the near future for foreign or local firms unless proper procedures have been followed.