News Column

Stamico Poised for 7 Billion Net Profit From Gold Mine

June 19, 2014

Alvar Mwakyusa

THE State Mining Corporation (Stamico) expects to make a net profit of 7bn/- during the next two and half years from Biharamulo Gold Mine, formerly known as Tulawaka, which it acquired from African Barrick Gold (ABG), last year.

By August 8, this year, StamiGold, a subsidiary of Stamico that would be overseeing the medium-scale mine, expects to produce its first batch of the precious mineral.

There are proved deposits of 100,000 ounces of gold at the mine but prospects are higher for more discoveries, according to Stamico's Acting Managing Director, Eng. Edwin Ngonyani. "We will continue drilling in the area and surrounding areas in a distance of about four kilometres.

Hopes are high that there could be between 150,000 and 200,000 ounces of the precious mineral," Eng. Ngonyani told journalists in Dar es Salaam.

Stamico acquired the mine in November, last year at 5 million US dollars (about 8bn/-) after ABG closed it in March 2013 citing high operation costs.

The corporation is using the 11.6 million US dollars (about 18.56bn/-) rehabilitation fund it received from ABG for the closure of the mine, as part of capital to operate at the Biharamulo Gold Mine.

Eng. Ngonyani, who assumed the position on June 1, this year, said he is focused to turn around the corporation to ensure it generates money for the treasury coffers and on the other hand enable artisanal miners to employ advanced technology in their operations.

"My focus is to turn around the corporation in shortest time possible, possibly within the next two or three years and start making contributions to the treasury and shun dependence on the state for funds," he explained.

On the other hand, the Stamico boss said the exactly value of Kiwira Coal Mine will be known in one-month time as a time of experts has been sent there to assess projects ahead of envisaged investment.

The coal mine has the capacity to generate 6MW of electricity but the intention is to boost power generation to 200MW to be injected to the national grid through a 100- km power transmission line.

Stamico's Director of Finance and Administration Peter Gembe said Kiwira's underground mine would be expanded to double its capacity to 300,000 tonnes from the current 150,000 tonnes of coal to be used in generating power.

"There will be also an open cast mine that will be constructed with a capacity to produce 1.5 million tonnes of coal. Producing 200MW of power electricity requires this amount of coal," Mr Gembe said.

The director hinted that several investors have expressed interests in the project, which was repossessed from Tanpower Resources last year, but stressed new investors will be picked through a competitive and transparent manner.

Mr Gembe explained further that it is only after a technical report on financial requirements of the mine which has remained idle for some years that major decisions would be made.

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Source: AllAfrica

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