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Tanzania secures $667m deal with Australia to mine coveted rare earths

The Tanzanian government has signed agreements worth $667 million with three Australian companies to mine graphite and rare earths. The deals were signed on Monday 17th April, 2023 at a ceremony in the capital city of Dodoma with Evolution Energy Minerals, EcoGraf Ltd, and Peak Rare Earths. These agreements are part of Tanzania’s President Samia Suluhu Hassan’s initiative to increase the mining sector’s contribution to the country’s economy to at least 10 percent by 2025.

At the signing ceremony, President Hassan expressed hope that the projects’ implementation would begin soon and contribute to the economy. Tanzania will have a 16 percent stake in each of the projects, as per the government’s negotiation team’s head, Palamagamba Kabudi.

Rare earths are crucial for electronics such as smartphones, computers, batteries, and cutting-edge technologies that can reduce reliance on fossil fuels. Western countries are looking to reduce their dependence on China for these 17 heavy metals.

The deal with Evolution Energy Minerals involves the exploration and development of a graphite mine in the Mahenge region, estimated to have a lifespan of over 40 years. The project will include an industrial park, a 600-kilometer (373-mile) rail line, and a hydropower plant. It will also create over 2,500 direct jobs and more than 10,000 indirect jobs.

EcoGraf Ltd will construct a graphite processing plant in Tanzania with an annual production capacity of 20,000 tonnes. The facility will use EcoGraf’s patented processing technology and supply battery-grade graphite to the global market. The project aims to create more than 300 direct jobs and 1,500 indirect jobs.

Peak Rare Earths will operate a rare earths mine and refinery in Tanzania. The project’s expected lifespan is more than 20 years, with an estimated annual production capacity of 10,000 tonnes. The project aims to create more than 1,000 direct jobs and over 5,000 indirect jobs.

The agreements with the Australian companies represent a significant boost to Tanzania’s economy, with the potential to create thousands of jobs and increase the country’s revenue from the mining sector. The government’s 16 percent stake in each project ensures that the country will benefit from the ventures in the long term.

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