Indian firm to invest $50m in Tanzanian gold mine

BY BUSINESS REPORTER

INDIA'S NMDC Limited has secured gold mining leases in Bulyang ‘Ombe and Saga Hills, in Tanzania.

Marking its maiden foray into gold mining, India’s largest iron-ore miner would start mining reserves with an estimated deposit of four tons, within the next six months. NMDC would be investing around $50-million and was scouting for a miner with experience in Tanzania to partner in the project.

“We have been exploring possibilities of gold mining in Tanzania for the last four years and we have done 15 000 m of drilling in this regard,” NMDC chairperson and MD A K Nanda said.

“We would ideally like to partner with a company which has mining experience in that country. But in the case that we do not find a suitable partner, we would commence mining on our own,” he said.

NMDC has already announced its diversification strategy, to include coal, rock phosphate, thermal power generation, solar energy and steel plants into its project portfolio. Furthermore, the company also has diamond interests, and recorded a production of 10 865 ct in 2010/11 from its mines in the provinces of Andhra Pradesh and Madhya Pradesh.

For the past several years, NMDC has been exploring the possibility of gold mining in the eastern Indian province of Jharkhand, but the Tanzanian project was expected to get a headstart over its domestic gold-mining projects.

According to the Geological Survey of India (GSI), the Tamar region in Jharkhand was estimated to have deposits in excess of seven-million tons. Preliminary explorations conducted by GSI in 2007 revealed deposits of 2.68-million tons of gold in Tamar but subsequent studies have indicated that the deposits could be three times higher.

However, delays in securing mining leases, mandatory forest and environment clearances and opposition of locals are major speed barriers on the road to faster exploitation of gold reserves, officials said.