China firm wins Tanzania coal, iron-ore mine bid

By: Reuters, 18th January 2011
DAR ES SALAAM – China's Sichuan Hongda will invest $3-billion in a coal-fired power plant and two iron-ore mines in Tanzania, the state-run National Development Corporation (NDC) said on Tuesday.
Sichuan Hongda is in advanced talks with senior Tanzanian government officials to sign a contract for the projects after it beat bids from more than 20 international companies including Rio Tinto and BHP Billiton.
"The Chinese firm was picked from a long list of bidders as the preferred investor after winning an international bidding process. We are now negotiating final details before a contract can be signed," NDC's board chairman, Chrisant Mzindakaya, told Reuters.
China has invested billions of dollars in Africa in the production of minerals and oil, hoping to secure the resources it needs to fuel its booming economy.
Tanzania -- Africa's fourth-largest gold producer with reserves of uranium, nickel and coal -- passed a new mining law last year requiring the government to own stakes in future mining projects and mining companies to list on the Dar es Salaam Stock Exchange.
The investment involves construction of the Mchuchuma integrated coal mine and thermal power station and an iron ore mine in Liganga.
NDC said the projects would be implemented in a joint venture with the Chinese investors under a public-private partnership.
Financial details of the investment projects were yet to be confirmed. Senior officials from Sichuan Hongda are in Dar es Salaam for negotiations with their Tanzanian counterparts to finalise the deal.
"Our aim is to have the contract signed next month in order to pave the way for the actual implementation of the projects," Gideon Nassari, NDC managing director, told reporters.
Mchuchuma, located 800 kilometres west of Dar es Salaam, has identified reserves of 536 million tonnes of coal. The investment in the coal mine would also involve construction of a 600 megawatt coal-fired power plant.
NDC said early studies indicated that the Liganga area was rich in iron, vanadium and titanium minerals. Reserves are estimated to be between 200 and 1 200-million metric tons, with 45-million already proven through drilling.
Other bidders included Nava Bharat (Singapore), a unit of Nava Bharat Ventures Ltd, STX Corporation of South Korea, U.S. power company AES Corporation and India's Sarda Energy & Minerals Ltd.
Edited by: Reuters