Tanzania inks $667mil. deals with three Australian miners for rare earth, graphite projects

Tanzania has inked deals worth $667 million with three Australian companies to mine rare earth minerals and graphite, part of President Samia Suluhu Hassan’s drive to fast-track negotiations on long-pending mining and energy projects.

Tanzania’s president has witnessed the signing of the deals at a function held at Chamwino State House in Dodoma. Under the terms of the deals with Evolution Energy Minerals Ltd, EcoGraf Ltd, and Peak Rare Earths Ltd, Tanzania will have a 16% stake in each of the jointly established companies to operate the projects, the chairman of the government’s negotiating team, Palamagamba Kabudi, said. The three types of contracts entered between the East African state and the three companies, all from Perth in Western Australia, are framework agreement, shareholding agreements and memorandum and articles of association agreements.

The rare earth minerals will be mined in the southwest of the country in Ngualla, while graphite will be mined in southern, eastern, and northern Tanzania.

Apart from the 16% non-diluted free carried interest shareholding for Tanzania’s government, the contract also stipulates that it will get more shares when there is a discovery of other minerals in the areas of projects or the government investment in the construction of infrastructures in the areas. Rare earths are a group of 17 minerals used in consumer electronics, electric vehicles, smart phones, renewable energy, and military equipment. Graphite, 70% of which comes from China, is a mineral used for the negative end of a lithium-ion battery, known as the anode. The United States, the European Union and their allies, including Australia, which has some of the world’s largest rare earths producers outside of China, are scrambling to reduce their reliance on China.