REFILE-Tanzania seeks shares in uranium, nickel mines

Wed Jan 22, 2014 8:48am EST

* Foreign firms engaged in uranium, nickel mining

* Raises gas reserves estimates by 4 trln cubic feet

* Sees law to create sovereign wealth fund this year

By Fumbuka Ng'wanakilala

DAR ES SALAAM, Jan 22 (Reuters) - Tanzania is holding talks with foreign companies planning uranium and nickel production in the country to ensure the government receives stakes under a 2010 law requiring it to take shares in strategic mines, its president said.

Local business leaders, politicians and activists are pressing the government to ensure Tanzanians benefit more from natural resources.

"We are proceeding with talks with companies that plan to build uranium and nickel mines," Jakaya Kikwete said in a speech late on Tuesday.

Kikwete also said the government plans to pass legislation this year to create a sovereign wealth fund to manage future revenues from gas production.

He did not say what level of shareholding the government was looking to take in mines.

Toronto-listed Uranium One, operator of the Mkuju River project owned by the Canadian uranium producer's majority shareholder, Russia's JSC Atomredmetzoloto (ARMZ), plans to build a uranium mine in southern Tanzania with an updated resource of 119.4 million pounds of uranium.

The AIM-listed African Eagle Resources Plc is developing a nickel mine in northern Tanzania with the capacity to produce around 27,000 tonnes per annum of nickel.

Barrick Gold Corp and Glencore Xstrata are also jointly developing a nickel project in Tanzania with a resource of 37.2 million tonnes grading 2.63 percent nickel.

Neighbouring Kenya, which is testing the commercial viability of its deposits, also plans to set up a sovereign wealth fund, through a revised petroleum law expected by June.

Tanzania now has 46.5 trillion cubic feet (tcf) of proven natural gas reserves, up from 42.7 tcf previously, and expects that exploration off its southern coast will result in more finds, Kikwete said.

Priority would be given to domestic use of gas over exports, to ensure the benefits are spread more widely, he said.

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