Kibaran Resources yesterday sought to give relief to its shareholders and fellow Australian-based graphite players in Tanzania as it explained how it might be affected by legislative changes around mining in the East African country.
The country’s parliament passed new laws this week, which gave the Government the power to tear up and renegotiate mining contracts, partially nationalise mining companies and enforce higher royalties and charges.
Responding to news of the laws, the Australian Securities Exchange urged a raft of Tanzania-focused explorers to enter trading halts to explain how the changes might affect them.
While most of the affected companies remained in trading halts or suspensions late yesterday, Kibaran sought to explain its position to shareholders.
The West Perth-based company, which is well advanced with its Epanko graphite project, said the new laws focused on the export of precious metals and metal concentrates, rather than the carbon-based industrial mineral product it planned to export.
Kibaran said its recently completed bankable feasibility study on Epanko was consistent with all provisions in the new legislation.
“Kibaran holds a 10-year mining licence applicable to projects with a capital cost of less than $US100 million as opposed to the 21-year special mining licences which are eligible for concessional tax arrangements via a mineral development agreement,” the company said.
“Following initial discussions with our legal advisers, the company intends to seek clarification as to how the 16 per cent free carry interest provision contained in the new legislation will in practice affect its class of mining licence.
“It is our legal advice that the option of the Tanzanian Government to acquire an additional interest, beyond any applicable free carry interest referred to above, up to a maximum of 50 per cent, does not apply to the Epanko graphite project because no tax incentives have been granted to the project.”
Kibaran said new royalty provisions did not apply to industrial minerals and the rate applicable to Epanko remained at 3 per cent as per its bankable feasibility study. However, the company said it was seeking further advice and its shares would remain suspended pending another announcement.
