21 January 2014

Tanzania: Tanzaniteone Raises Sh6 Billion for Mine Restart

RICHLAND Resources, a parent company of TanzaniteOne, has completed a deal with the State Mining Corporation (STAMICO) that confirms its tanzanite licence for the next ten years.

STAMICO will own the licences on a 50/50 basis going forward and pay Richland, TanzaniteOne Mining's parent company, 4.0 million US dollars out of future profits for all of the work it has put in developing the mines.

According to the Richland's info on website, the agreement has enabled it to raise 2.76 million UK pound (6.07bn/-) to recapitalise the tanzanite business operation which was marred by heavy losses recently in part due to illegal miners occupying its licence area.

The fund set to restart the tanzanite mining at Mirerani, Manyara Region, after exceeding the minimum it required from a placing and open offer, heavily backed by directors and five investors.

Four of the miner's directors doubled or more than doubled their stake, while five investors are now significant shareholders with holdings of 4.4 per cent or higher.

With the help of the Tanzanian government and its new partner, STAMICO, Richland has started to wrestle back its operations from the illegal miners and will use the money to restart.

Bernard Olivier, Richland's chief executive, said: "We are very pleased with the success of the placing and open offer which have allowed all our shareholders the opportunity to participate."

Under the new shareholding agreement TanzaniteOne, Richland's tanzanite subsidiary will remain the operator, with net profits shared equally with STAMICO. Its cutting factory has been awarded a three year contract to polish and market the stones produced.

Trading arm TanzaniteOne Trading limited is not part of the agreement, while Richland's other asset on Tanzania, the Tsavorite Project, is not included.

Bernard Olivier, Richland's chief executive, said as well as a 10 year mining agreement the deal secured a clear alignment of interests with the government and people of Tanzania.

Copyright © 2014 Tanzania Daily News. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.