ANGLO AMERICAN’S new mining business division has been actively exploring potential projects in East Africa for the past two years, and this week the mining giant announced a tie-up with a Canadian junior, Sutton Resources, to take a majority stake in the Kabanga nickel-cobalt project in Tanzania.
The mine is in the far west of the country, near the Burundi border, which poses the biggest logistical problem for the group. “The infrastructure is pretty poor and part of this initial feasibility study will concentrate on the transport and power options available to us,” says Dr Robert Danchin, chair of the division. “There is no electricity at all in that area.”
Pre-processing will take place on site, but eventually the product will have to be transported to the coast, via road, ship (across Lake Victoria) and train to Dar es Salaam or Mombasa. “That is the biggest single cost to making it all hang together,” says Danchin.
If the project goes ahead, it will prove to be the biggest, in terms of capital invested, in Tanzania to date. Numerous other operations are under investigation, not least by Anglo, but have not progressed past the prospecting stage.
Sutton is also very active in East Africa but pulled out of Kabanga to concentrate on its gold interests at Bulyanhulu. Anglo is also better equipped to develop the Kabanga resources, says Danchin, because of its experience in nickel and cobalt mining.
“Obviously, we’d be very keen to get involved with Sutton on the gold venture but they have rejected all our advances. That situation could always change though.”
The feasibility study is expected to be completed within four years at a cost to Anglo of about $27-million for its 60% share towards developing Kabanga.