Jervois Mining tries to win Nickel and Cobalt Project in Tanzania

SMM8, 20 March-Australian junior developer Jervois Mining may succeed in winning control of the Kabanga nickel and cobalt mining project in Tanzania, which has undergone a comprehensive reform of the mining system in the East African country. The ruling on the project has been pending for the past eight months.

Located in northwest Tanzania, Kabanga is considered one of the most attractive undeveloped nickel sulphide mines in the world. Although it will expire in less than 12 months, the company's business license has been cancelled.

Kabanga is run by Glencore Barrick Gold Joint Venture (Glencore-Barrick Gold joint venture). Since the late 1990s, the company has invested more than $250 million in pre-exploration and development activities until the mid-2000s, when the project was sealed because of falling nickel prices. Glencore-Barrick is applying for an exploration license for the mine to replace the cancelled retention license. Jervois is also believed to have submitted an application for an exploration license for the project.

A new law on the distribution of wealth

Tanzania was once seen as an investment-friendly country, but in July 2017, the government conducted a serious inspection of potential mineral exploration companies in the region. The Government of Tanzania has implemented major reforms aimed at improving the domestic efficiency of large-scale mining projects by foreign investors. These changes took the form of three bills that were quickly passed in the Parliament of Tanzania and signed into the new law by President John Magufuli. The laws include existing mining agreements that may be renegotiated, which also provide for mandatory 16 per cent ownership of mining projects and the right of the government to acquire up to 50 per cent of foreign mining companies under certain conditions. They are also trying to raise mining royalties on gold, copper, silver and platinum exports from 4 per cent to 6 per cent to "distribute wealth to the people of Tanzania and protect the country's natural resources".

Jervois is also likely to succeed in acquiring the Kabanga mining project from Glencore. Bryce Crocker (Bryce Crocker), CEO of Jervois, served on the Kabaga shareholder Advisory Board. Peter Johnston (Peter Johnston), Glencore's chairman, served as executive supervisor for the project from 2013 to 2015 while he was head of Glencore's global nickel industry and a member of its executive management committee. During this period, Johnston was responsible for all of Glencore's nickel, cobalt mining and processing facilities in Australia, Canada, the Dominican Republic, New Caledonia, Norway and Tanzania. Both men have a deep understanding of the Kabanga mining project. Jervois expects the mine to have more than $22 million in cash and publicly traded securities by the end of 2018.

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